Airtel to exit fifteen African markets within the yearMonday, January 30, 2017
by Business Council for Africa
By Staff | Joy Online (Ghana)
Bharti Airtel, the mother company of Airtel Ghana has announced that it will be closing shop across 15 African countries by the end of 2017.
The affected countries include Ghana, Nigeria, Congo, Chad, Gabon, Kenya, Madagascar, Malawi, Niger, Rwanda, Seychelles, Tanzania, Uganda and Zambia.
BloombergQuint, the India-focused subsidiary of Bloomberg, quotes Bharti Airtel Chairman Sunil Bharti Mittal as saying “the moves would pare the size of operations on the continent and could be completed within a year…some of Bharti’s businesses in 14 African nations would be affected.”
This confirms earlier rumours that Airtel and Tigo will merge in Ghana this year and will be taken over by a French telecom giant, Orange.
A further confirmation was a hint by some local telecom executives who told this writer they have been approached by Orange with a job offer in Ghana, while some Airtel and Tigo vendors close to talks on the possible merger have also confirmed they have been approached to start preparing for the change.
Airtel Ghana has declined to comment on the plan to exit the country.
A Tigo Ghana executive also confirmed in a conversation with some industry stakeholders that “the merger will happen”.
Two years ago, when Airtel began talks to sell off its operations in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone to Orange, the company had stated that it wouldn’t be exiting Africa.
But mobilityarena.com, a telecoms industry online portal, reports the sale of the 14 operations in Africa has become necessary because Bharti Airtel is faced with poor performance across those markets and that is shoring up its debt portfolio.
Bharti’s African unit, for instance, lost $91 million in the quarter ended September 2016, compared with a $170 million loss same period in the previous year.
The Indian global telecoms giant is, therefore, looking for ways to pare net debt equivalent to about $12 billion by September this year.
In Ghana, Airtel recently instituted charges for services it used to offer for free and made a failed attempt to take more money from its value-added service partners, and the VAS folk suspended services in protest to an 80-20 percent revenue share arrange in favour of Airtel.
Indeed, since MTN went 4G in Ghana last year, there have been moves by Tigo and Vodafone to join, but Airtel, which is part of the top four telcos in Ghana, is pretty much silent about 4G LTE.
In Nigeria, Airtel is the only one of the big four mobile operators that are yet to launch a 4G LTE network.
Back in Airtel’s home country, India, Reliance Jio is reported giving Airtel a big run for their money in a fierce price war that is reportedly depleting their gains.
As part of moves to reduce its debts, Bharti is also considering selling it 73.5 per cent stake in its tower unit, Bharti Infratel Ltd., but a decision is yet to be taken whether to sell minority or controlling shares.
In Ghana, Airtel is the fourth biggest operator out of six operators. Its subscriber base stands at 4.68 million, representing a market share of 12.54 per cent. It data subscriptions is a little over three million, representing some 15.71 per cent market share.
Airtel Ghana market value is estimated at some US$200 million.