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Airtel raises $1.3 billion from Africa mobile tower sales

Mobile tower

Telecom operator Airtel has raised $1.3 billion from the sale of mobile towers in five countries in Africa to Helios Towers, IHS Holding Limited and American Tower Company, according to a notification on the Bombay Stock Exchange. The company added that the proceeds will go towards reducing the $10 billion debt used in its African operations in 2010.

The company added that agreements in two countries have lapsed and that it hopes that it will complete the transactions the other six other countries. Earlier in June, Airtel said that the agreements for sale of tower assets in Tanzania and Tchad between the respective subsidiaries of Bharti Airtel Limited and Helios Towers Africa have lapsed and were terminated.

Sale of towers

In December 2014, Airtel sold 1,100 towers in Zambia and Rwanda to IHS Holding Limited. The agreements were conducted through Bharti Airtel International (Netherlands) BV, as per which Airtel would sell and lease back over 1100 towers from IHS in Zambia and Rwanda under a 10-year renewable contract. In November 2014, Airtel sold 4,800 towers in Nigeria to the American Tower Corporation for $1.05 billion. In September 2014, Airtel sold 3500 towers to Eaton Towers in six African nations, and in July  it sold 3100 towers in four countries to Helios Towers Africa. The Helios Towers deal was valued at $2 billion.

Airtel Africa voice revenues under pressure

Airtel Africa reported revenues of Rs 6215.3 crore for the quarter ended March 31, 2015, down 12% from Rs 7062.3 crore in the same quarter last year. It posted EBITDA profit of Rs 1290.1 crore for the quarter, down 28% from EBITDA of Rs 1785 crore in the same quarter last year.

As of March 31, 2015, Airtel had 76.26 million customers for its mobile services across the 17 countries in Africa, up 2% from 74.59 million customers at the end of the previous quarter.

Airtel Africa’s voice revenue and overall growth suffered because of the Nigerian Communications Commission (NCC)’s ban on conducting sales promotions in Nigeria, Airtel Africa CEO Christian De Faria mentioned during Bharti Airtel’s Q2-FY15 earnings conference call in November last year. This ban had come into effect on March 31, 2014 and was lifted the same year on the 31st of October.

Airtel Africa had reported an increased net loss of $124 million for the quarter ended March 31, 2014, a 24% increase from $100 million loss in the previous quarter and a 36.3% increase from a net loss of $91 million from the same quarter the previous year.

Chief information officer appointment

Earlier in May, Airtel appointed Andrew Kossowski as chief information officer for its pan African network. Kossowski, whose appointment will take effect on May 15th 2015, will take over from George Fanthome the previous CIO. In his new role, Kossowski will be responsible for driving Airtel Africa’s IT strategy including bettering its execution capabilities, in the 17 African countries that Airtel operates in.

Image credit: Flickr user hopeless128

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