Airtel still rumored to exit African market: TMT Finance

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Early this week, finance specialist news, research and high-end networking website TMT Finance reported that Indian telecom operator Bharti Airtel could be considering plans to withdraw entirely from the African continent, where it operates in 17 markets, after failing to turn a profit since acquiring the portfolio from Zain for US$10.7bn five years ago.

According to TMT Finance, Airtel is now seeking a buyer for the assets, which could be sold as a whole unit, or broken up into several pieces and sold to different buyers. Potential buyers include MTN, Orange, Vodafone/Vodacom, Millicom and Etisalat who be interested in various asset. But, TMT further cautions that there was no formal sale process currently underway.

Airtel’s management is now said to have lost patience with the venture, which has been plagued by tough competition, regulatory hurdles, as well as economic and political issues. Airtel has also invested a further US$5bn to improve its networks and quality of service (QoS) , but five years down the road and the operator is struggling to make any serious ground, and is still in the red: as of Q1 the unit reported losses of US$585m on revenues of US$4.2bn.The company had targeted 100 million subscribers by 2013; current numbers are at around 75 million, which is below expectations.

We’ve previously hinted about the sale of Airtel Africa and TMT Finance has also confirmed the same reports saying that last year there were reports in certain circles suggesting the operator was looking to sell up, although nothing serious came of the talks. But, the big red operator agreed to sell most of its towers in Africa to Eaton Towers, hoping to extract some value, and raise a small portion of the US$8.3bn of debt it took on to pay for the assets in the first place.

Before Airtel acquired Zain, the group had long been looking to expand internally – particularly in Africa – but TMT reports that they were as twice rebuffed after attempting to acquire MTN, which had become the Indian operator’s first acquisition/merger target. Refer to source link below for more on this story.

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