We reported about Airtel seeking possibilities of exiting some East African markets like Kenya, Tanzania and Rwanda after the Economic Times reported about the telecom seeking redress regarding its struggling operations in the cited countries. At the height of these tensions were Bharti Enterprise Chairman, Sunil Mittal whom the respected Economic Times quoted to have said that the telecom needed to exit the three markets.
Airtel Kenya through an official statement has since come out to deny the rumours, calling them unfounded, incorrect and devoid of facts.
“ We would like to categorically deny these reports which are completely incorrect, unfounded and devoid of any facts. Airtel has consistently stated that it is open to consolidation opportunities, either through acquisitions or mergers, to create sustainable businesses in Kenya, Rwanda and Tanzania.’” Reads the statement.
What actually this means is — Airtel is not exiting any of the markets above but its is open to purchase any other mobile network operator, as was the case with Warid Telecom in Uganda, a move that earned it the number two position in Uganda’s telecom space or merge/consolidate with an existing one as was the case with Tigo in Ghana to form Airtel-Tigo.
Airtel maintains that it aims to occupy a first or second market position by consolidation or acquisition. Which is good as saying that operations where the telecom is enjoying either position are off the axing list but where it lags, it could merge with or buy up another player to maintain any of the said positions.
It goes on to state that its African revenues grew by 2.8% Year-on-Year (YoY) with net revenues growing 6.3%, thanks to an increase in data penetration which grew by 83.8% in the same period while the company’s Airtel Money Transaction value grew over 30% YoY.
“Our efforts to create a profitable business model for Africa continues and we have delivered Earnings before interest , tax, depreciation and amortization (EBITDA) margin of 32.1pc, with margins up 9.1pc YoY. This has now enabled the business to sustainably positive free cash flows. We remain focused on accelerating growth through the three pillars of increasing mobile penetration, growing the data business and expanding the Airtel Money Base.”
Airtel inherited what was known as Zain Africa BV for approximately $9 Billion and acquired 15 African operations of the latter excluding Sudan and Morocco. The sale to Airtel was blamed on the global financial crisis environment as Zain expanded too quickly at the time.
Airtel so far has had not so stellar results from its African operations that at ontime they were thought of selling them all together and concentrate on their domestic Indian operations, a move they denied.
However, with the above statement from Airtel, it shows that the company is committed to its operations in East Africa and can only consider a merger or an acquisition of another mobile network but not an exit.