Emerging conglomerate, Airtel Africa, a leading telecommunications company with operations in 15 countries across Africa, has refuted speculative media reports erroneously stating its possible exit from Africa. The organization has reaffirmed that it remains committed to Africa and will continue to invest in its operations to grow sustainably in Africa.
It would be recalled that there were reports by Bloomberg earlier last week hinting that Bharti Airtel, owner of Airtel Ghana has announced that it will be exiting 14 African countries beginning with Ghana this year.
However, there are strong indications that leading Dutch telecom conglomerate, Orange and two other global giants are waiting for any deep pocket telecom that are serious to leave Africa or any population-advantage country in other to buy up its infrastructure and soar the market with intimidating investments.
According to the Bloomberg report, Bharti Airtel Chairman, Sunil Bharti Mittal said “the move would pare the size of operations in the continent and could be completed within a year….some of Bharti’s businesses in 14 African nations would be affected.”
Industry experts have been tracing the reasons behind exit plans of major industry leaders in telecoms. Whereas some say it was due to dwindling revenue caused by recessions in African economies, others argue that ease of doing business in many African economies is not encouraging foreign direct investments as the problem is causing erosion of investments instead of growth.
But denying the exit reports, a statement from the group head office in Nairobi, Kenya Monday refuted the speculation saying, “Airtel Africa’s recent 3rd quarter results were strong”.
“The underlying Africa revenues for the quarter accelerated by 6.0 per cent Y-o-Y, the highest over the last 9 quarters. The organizations efforts to improve the quality of customer acquisitions have resulted in a reduction in customer churn to 4.9 per cent from 6.0 per cent. Data consumption and revenues have grown by 91.0 per cent & 24.0 per cent Y-o-Y respectively, led by stronger data networks. The strong focus on cost management has led to a significant underlying EBITDA margin expansion of 4.5 per cent Y-o-Y, which now stands at 24.5 per cent. Africa is now generating positive free cash and is PBT positive in constant currency.
“Raghunath Mandava, Managing Director and Chief Executive Officer, Airtel Africa, said’ “All the steps taken recently with regard to human resources and infrastructure have been geared towards readying the organization to grow efficiently and sustainably in the medium to long term. The company remains committed to competing in various markets and providing more choice to customers through further investments to ensure consistent delivery of quality and value for money services to our customers. We are also accelerating our investments in new data networks and to modernize our existing networks. We are committed to launch 4 G in multiple countries.”
He added that “Mergers and acquisitions continue to be the norm for any multinational organization and they affect all global organizations in equal measures as and when they happen. As a strategy, we look for opportunities to acquire or merge in opcos that are operating in a fragmented market structure with too many players in a small market. Last year, Airtel and Orange reached a mutually beneficial agreement on the assets in Sierra Leone and Burkina Faso. Similarly, Airtel also acquired assets in Uganda, CongoB and Kenya in recent times. The agreements brought together the strengths of Airtel, Warid and Essar. This has offered benefits to customers in the form of a superior and wider network, affordable voice / data services and better customer care. Away from Africa, recently, we merged with Robi in Bangladesh to create a solid and profitable No.2 player in the market.”
The recent results demonstrate the effectiveness of Airtel’s business strategy in Africa. The organization sees an opportunity ahead to emerge with a broader reach and sharper execution.
