While Airtel refused to acknowledge rumors of its possible exit from Africa, some analysts believe this option is not yet off the table. Airtel is facing a tough time in its home turf resulting from the launch of Reliance Jio in India, that has undercut the second largest telecom in the world registering over 70 million subscribers in a period no less than 6 months. Surprised? Yeah you must be.
Coupled with a piling debt of close to $12 billion and a loss making making African unit, possibilities of a sale are prevalent as is the case with Sierra Leone and Burkina Faso operations.
However, we should note that the hit that Airtel subdues with its African operations has reduced over time from over $170 million in 2015 to $91million for the same financial quarter ended September but still, that is a tonne of money to lose.
Therefore possible mergers and acquisitions cannot be outruled since the telecom is actively looking at them as consolidating its position back in India might call for letting go of loss making African operations.
While this unfolds, Orange SA operating under the Orange banner is looking at acquisitions in Africa since its European operations are nearly saturated according to Bloomberg Africa with a stringent EU regulatory environment. As a result, it has to look for new growth frontiers and Africa looks ripe with a data hungry population catapulted by the now ubiquitous smartphone.
Surprisingly these are few in hands of many Africans since feature phones reign supreme. It should be noted that the demand for smartphones is growing day by day and so is the demand for data services onto which wireless carriers ride.
“We are looking for acquisition opportunities in Africa, it is a priority region for us,” Yannick Decaux, Orange’s commercial director for Africa is quoted to have said so to Bloomberg.”
“We are speaking to everyone,we will speak to Bharti Airtel on a case by case basis.” Bloomberg stresses but he declined to comment on this further.
It should be noted that Orange left the Ugandan market after failing to break even and its operations were taken up by Africell. On the brightside, these latest revelations provide hints that should Airtel expound possibilities of a sale, Orange might pick them up but of course this can be an open bidding process and any other operator can buy them up besides Orange.
Orange is remembered to have been an influential player in the Ugandan telecom space having invested heavily in expanding wireless data services and at the same time introducing nextgen wireless technologies in the country. As a result, it became the market leader in data services winning many quality of service awards but this wasn’t reflected in its financials and so it sold.
Could the lingering rumours of an Airtel exit re-introduce the Orange brand in Uganda? So far it has consolidated itself in Francophone countries owing to its roots having exited Kenya just recently with a few traces in Anglophone countries like Botswana and Liberia. Should this happen, it can only decide to pick up Airtel operations in the black not the whole lot.