NEW DELHI : Airtel Africa has set its sights on beating the continent’s No.1 telecom operator MTN to develop into its prime telco, greater than a decade after exploring—and abandoning—a merger plan with the corporate. In his first interplay with the Indian media, Airtel Africa managing director and chief govt Olusegun Ogunsanya mentioned the telco, which operates in 14 international locations, has captured the highest spot in 4 and is No. 2 in 9 others. Ogunsanya additionally spoke of the corporate’s drive for profitability and value discount. Edited excerpts:
Would you name Airtel Africa’s debt place comfy?
After we did our IPO in 2019, the leverage was 3X, and now it’s 1.3X—that’s a really comfy place for a cellular community operator to be in. We’ve acquired a twin coverage: one, decreasing international foreign money debt on the maintain co (holding firm) since we don’t have revenues getting generated, and two: transferring debt to native op cos (working firms) the place we’ve the pliability of writing off curiosity expense towards revenues. So we gained’t be taking over any long-term international foreign money debt. We’ve pay as you go $450 million of the $1 billion bond excellent, leaving solely $550 million, which we are going to attempt to prepay sooner than the March 2024 deadline.
What sort of upside are you anticipating in Africa?
There are three clear indices, which present a really lengthy runway to development. Firstly, the extent of SIM card penetration in Africa continues to be south of fifty%. Secondly, the quickest rising inhabitants on the earth and thirdly, the consumption of minutes is between 199-270, in comparison with 600 in India. We’re sitting on three legs of development—voice, knowledge and Airtel Cash—which might be persevering with to develop, and of them, knowledge and cash are rising in double digits. We’re not simply rising in Africa. We’re rising profitably.
How do you intend to shut the hole with MTN?
We’re already No. 1 in a couple of international locations, like Zambia and Niger, on par in Uganda. We’re No. 2 in lots of international locations, reminiscent of Nigeria. We don’t wish to stay No. 2 endlessly. We’re able to be No 1. My aspiration is to be No. 1 in as many markets. In the event you take a look at our journey within the final 10 years, we’re very steady possession, and we’ve developed a really clear technique that’s engaged on six pillars—community, distribution, knowledge, cash, value discount and other people. MTN acquired in a lot earlier than us; they’ve been steady for a very long time. We got here in late, we took over a number of badly performing companies, and we’re pleased with what we’ve achieved, particularly within the final 5 years.
Aren’t inflation and foreign money devaluation headwinds?
Sure, we underestimated the affect of inflation. It not solely impacted buyer wallets but in addition broken our opex (working bills) construction. We’re making adjustments to mitigate the affect on prices of operation as a result of most of our websites are powered by diesel, and the price of enterprise in some international locations has gone up 3X. The affect of oil is large on the underside line. We’re re-negotiating with our tower companions to cross on solely part of the fee enhance in return for the dedication of recent rollouts. Additionally, we’re transferring away from fossil fuels. Additionally, we’re eradicating non-revenue impacting working bills reminiscent of suspending recruitments in non-critical areas.
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