Just before rumours of Smile Communications leaving Uganda could sink in, a claim that they have since denied than news hit our desks that Airtel might exit neighbouring countries and the most likely candidates are the Kenya, Tanzania and Rwanda operations. Airtel holds no number one position in any of the aforementioned countries surprisingly.
The reports come from Economic Time after quoting Bharti Enterprises Chairman and Founder, Sunil Mittal. Bharti Enterprises owns Airtel Africa that instead owns most of Airtel operations on the continent including those in Kenya, Tanzania, Rwanda and even here in Uganda.
He is quoted to have said that the telecom needs to exit these three African markets and is in active discussions to explore a mix of an intra-country sale, a purchase or merger.
At least we have seen this happen with Airtel Ghana operations merging with Tigo to form Airtel-Tigo there, selling of its subsidiaries in Sierra Leone and Francophone Africa to Orange among other examples to save its consolidated earnings, which were mostly hurt by its African operations.
At one time the telecommunication giant squashed off rumours of a possible exit from Africa after some of the above transactions were effected but today’s reports come from the chairman himself.
In Kenya, it is a distant number two from Safaricom and now even faces stiff competition from the resurgent Telkom. It faces off Millicom owned Tigo not only in Rwanda but in Tanzania too, on top of other players like Vodacom.
However, Ugandans have a reason to feel confident that Airtel is still here at least in the foreseeable future since there is no mention of its amongst Airtel’s vulnerable African operations.
Why the above were particularly highlighted is because they currently have margins that are significantly lower than the current Africa average. This according to Investment Bank, Goldman Sachs.
In Uganda, it enjoys the number two position and is edging closer to MTN, that is the current market leader. Both boost of fourth generation networks (4G), mobile money operations among other telecom services but investment in the former is credited as showing confidence that Airtel Uganda is here to stay.