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Airtel In Africa: Investment Targets; Tanzania Problem; Wants Infra Sharing, MNP

Following its landmark acquisition of Zain Africa, which made it the fifth largest telecom operator in the world, Bharti Airtel is making all the right noises in Africa. On the regulatory front, Airtel is pushing for infrastructure sharing among telecom operators, which will reduce its cost of roll out, making the case for the implementation of Mobile Number Portability, which will assist it in customer acquisition, and highlighting the Indian example of high minutes of use (around 5 times of the African average of 40 minutes per month) to push for reduction in rates. Manoj Kohli, CEO (International) & Joint MD, Bharti Airtel, who is heading the African operations, has been doing the rounds of the countries where Zain has operations, announcing investment plans, and stating that growth of teledensity in rural areas will be important for the company.

As we had reported last month, the Airtel brand will be rolled out in Africa in October, and Kohli has set the following targets for the company by 2012-2013:
– 100 million customers (Zain Africa currently has 42 million)
– $5 Billion in revenue (Zain Africa currently does around $3.6 Bn)
– $ 2 Billion EBITDA (Zain Africa currently does $1.2 Billion EBITDA)

(our detailed coverage of Airtel-Zain here)

Issues With Tanzania Government Over Ownership

According to reports, Airtel put in a bid for the Tanzania governments 40% stake in Zain Tanzania, but the government doesn’t want to sell it. Instead, the government wants to buy back the majority stake in the company, which is with Airtel. Zain also held 35% stake in national fixed line operator TTCL, which it agreed to sell back to the government. According to reports, the Tanzania Communication Regulatory Authority (TCRA) has not formally granted permission for the sale of Zain Tanzania.More at Telegeography and Cellular News. According to The Citizen, Airtel had offered $11.2 million to the government, and also allow it to retain its stake. Apparently, mobile companies are required by law, to list on the Dar es Salaam stock exchange.

To Invest At Least $1.5 Billion

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At press conferences around the continent, Kolhi’s announced investment plans over the next 2-3 years that aggregate to at least $1.5 billion. Plans and investments for Chad, Sierra Leone, Burkina Faso, Congo Brazzaville and Madagascar are yet to be announced.

– In Kenya, $150 Million: In Nairobi, Kohli said that Bharti Airtel will invest $150 million in Kenya to help boost network and capacity distribution, and start services with a rural focus. The company is open to infrastructure sharing. Airtel is also pushing for Mobile Number Portability in Kenya. Kohli said that the estimated minutes of use is 50 min per month in Kenya, which the company will look to push up. Kenyan subscribers pay 28% tax on call value. Read more at Reuters and Business Daily Africa.
– In Nigera, $600 Million: Nigeria was a tricky situation for Airtel earlier. Airtel has announced plans to invest N90 billion (around $600 million) in network expansion over the next three years in Nigeria, around N45billion of which will be invested in the first year itself. Consumers expect the company to improve call quality and customer service, and reduce tariff. Rajan Swaroop is the CEO of Zain Nigeria. Read more at Daily Independent
– In Ghana, $200 Million: Airtel will invest $200 million in Ghana, and look to reduce the cost of connectivity for consumers, provide deep network coverage and distribution. Airtel will look to share infrastructure with other telecom operators, but is also pushing for mobile number portability in Ghana. Additionally, they’ll also roll out Corporate Social Responsibility programmes in Ghana. More at Ghana News Agency
– In Gabon, $100 Million: the investment will be made over three years, for network expansion, and the launch of new services. More at The Hindu
– In Niger, $100 Million: Around 50 billion CFA francs (around $100 million), over around three years, will be invested in Niger for improving network quality. Telecom penetration in Niger is around 10-11% . [Economic Times]
– In Malawi, $100 million: Airtel is targeting farmers in Malawi, and will invest $100 million over three years, and is looking to push average minutes of use from 40 per month to 250, by bringing down rates. Airtel is targeting 7 million subscribers in the country. Kohli also said that availability of electricity is a key issue, though Zain Malawi has solar powered booths. [AfricaNews.com & Digital Journal]
– In Uganda, $100 Million: the investment will be made over the next two to three years, and Airtel is looking to push mobile penetration to over 60% from the current 30% level. More at Business Daily Africa.
– In Zambia, $150 million: Again, the investment will be over the next two to three years according to Kohli. Zambia is a market where Airtel/Zain is dominant. [CIOL]

Airtel Completes Zain Acquisition; Plans, Targets & Nigeria
Airtel Closes In On Zain Acquisition: $8.3Bn Financing Oversubscribed
Airtel-Zain: Payout Of $9 Billion Expected; $255.38 Per Customer
– Zain Sellout Timline; Zains Acquisitions

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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