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Airtel Africa Results: Revenue Marketshare Gain; Restructuring Still In Process

Airtel isn’t focused on its margins in Africa at the moment, but on gaining revenue and revenue marketshare. On its earnings conference call, which ended an hour ago, Manoj Kohli, CEO (International) & Joint Managing Director of Bharti Airtel said that the company has gained revenue marketshare in each of the 15 markets. Responding to a question on whether a lower tariff strategy has been accepted in the markets, Kohli said that the company doesn’t have a lower tariff strategy in Africa, but intends to utilize its higher pricing power. “The costs in Africa are much higher than India. We’re testing carefully, market by market, but overall objective is to increase traffic, go deep into the market, and give 3G led data services. ARPU has gone up. Tariff reduction is not the (core) strategy.”

Kohli said that investments will continue at the company, which doesn’t appear to have settled in yet, and many changes are still required: there is a need to rebuild the network and grow the depth of the network in many markets. “Till we catch up and improve network coverage, we will continue to be in investment mode. I can’t give you a date by which we’ll reach there (though he later said it will 2-3 quarters to close the gap). The rollout will pick up from this quarter onwards. Investments are being made, and there will be extra costs of rollout. A restructuring of each part of the business is continuing, and it is happening at the same time concurrently. There are multiple moving parts at the same time, compared with our rollout of operations in India over 10 years.”

Country specific regulatory developments in Africa:
– Ghana: MNP was officially launched on July 07, 2011.
– Madagascar: Import of 3G equipments has been authorized by the regulator.
– Malawi: will be looking to monitor International Incoming calls, and Airtel along with other operators, have formally objected to this, along with an increase of the termination rates charged into the country.
– Nigeria: The Nigerian Communications Commission (NCC) has announced implementation of MNP with the anticipated timeline for rollout being March 2012. It has also mandated all Telecommunications Operators to make their respective networks lawful interception compliant. Airtel has commenced last mile testing of lawful Interception with the National Security Adviser Monitoring Unit.
– Tanzania: Regulations Draft industry regulations have been issued in June 2011 for the Electronic & Postal Communications Act relating to: “co location and site sharing, account separation, competition, tariff, frequency, licensing, quality of service, mobile number portability, consumer protection, broadcasting, equipment identification register, emergency response and numbering. A consultation workshop will now be held with all parties.”
– Uganda: A frequency reallocation of the 900MHz band is to be implemented.

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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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