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Airtel invests $630m in capital expenditure in Nigeria, 13 others

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Airtel


. Records 10.7% regional subscriptions growth
About $630 million was invested by Bharti Airtel on high speed Long Term Evolution (LTE)/4G to enhance and improve customer experience in its African operations, which include Nigeria and 13 others in the last one year.

In its updated fourth quarter and full year results for the period ended March 31, 2019, the Indian telecommunications giant, disclosed that its African business is on the rise, with subscribers on the continent increasing by 10.7 per cent year-on-year to 98.9 million across 14 markets. The firm currently operates in Nigeria, Ghana, Chad, Gabon, DRC, Malawi, Madagascar, Kenya, Congo, Rwanda, Seychelles, Tanzania, Uganda, Zambia.

The Managing Director and Chief Executive Officer of Africa Airtel, Raghunath Mandava, stated that the Africa growth story remains strong with the full year witnessing a 12 per cent revenue growth.“That near 12 per cent growth was at constant currency exchange rates, but at “reported currency” rates the full fiscal year revenues grew by six per cent to $3.08 billion, while profit after tax grew considerably to $331 million from just $3 million a year earlier.

“The increase comes on the back of a robust data traffic growth of 73 per cent and Airtel Money throughput by 22 per cent on a YoY basis. We continue to invest towards enhancing customer experience through a high speed LTE network. To this end, the year saw an overall capex spend of $630 million. That capex was far greater than the $411 million of the previous year,’’ Mandava added.

Analysts opined that successes in Nigeria, its largest market in the region is rubbing off well on its African operations. Airtel is currently the third largest operator in Nigeria with 45 million subscribers and 26.2 per cent market share.

According to Connecting Africa, Airtel’s data customers increased by 20.4 per cent to 30 million, compared to 24.9 million a year earlier. The active Airtel Money customer base increased to 14.2 million, boosting the total transaction value on Airtel Money platform by 30 per cent to $26.16 billion.

Those statistics bode well for Airtel Africa’s planned Initial Public Offering (IPO), which the operator confirmed last week: It planned to raise $750 million from the issue of new shares. The operator intends to use the proceeds from the IPO to reduce net debt.

Bharti Airtel announced more than a year ago the plan to list its African business. It selected bookrunners in September, raised $1.25 billion in a pre-IPO with six investors in October, followed by another round of pre-IPO in January which raised $200 million.

Meanwhile, the successes of the African operations are in contrast to those of the total Bharti Airtel group, which has its main operations in the brutally competitive market of India. Despite gains in Africa, overall Airtel Group customer numbers were down 2.5 per cent to 404 million across 16 countries. Group consolidated total revenue was down 2.2 per cent YoY on an underlying basis to 807.8 billion Indian rupees ($11.7 billion). Consolidated EBITDA was also down, by 13.6 per cent YoY to INR262.94 billion ($3.79 billion), bringing the EBITDA margin down 4.3 per cent.


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