Telecom

Airtel Plans To Invest $2.4 billion To Push 4G In Africa

With its Indian business under pressure, Bharti Airtel Ltd has made the decision to pay attention to its Africa unit and is prepared to spend as much as $2.4 billion to expand its high-speed 4G data network across Africa.

The telecom operator is also gearing up for an initial public offering for its Africa unit in June-July after raising $1.25 billion in pre-IPO fundraising from large investors.

Airtel Africa currently offers 4G services in 10 African nations. By expanding its 4G footprint in Africa, Bharti Airtel is looking to do better than its chief continental rival South Africa’s MTN.

An industry insider said that MTN is a strong force in Africa, but Bharti is beating them everywhere on an incremental revenue basis. It’s number two in Nigeria and aims to be number one or number two in every country on the continent.

In October 2017, Airtel signed a deal with Millicom to combine their operations in Ghana. In December 2017, Airtel’s Rwanda unit revealed the acquisition of Tigo Rwanda Ltd, making Airtel the second largest telecom business in the African nation.

To date, Bharti Airtel has invested almost $8 billion in Africa. In February 2018, it said that it would consider an IPO for the Africa business.
In October, the company announced that six investors, including Temasek, Singtel, Warburg Pincus and SoftBank Group International, would invest $1.25 billion in Airtel Africa. The funds were used towards the payment of Airtel Africa’s debt, which then stood at $5 billion, and for the expansion of its operations.

MTN is the leading telecoms operator in most African countries, especially Nigeria, which is the largest market for telecom services on the continent.
Airtel's Nigerian unit generates approximately one-third of Airtel Africa's operating profit.

In the previous September quarter, Airtel’s capital expenditure for its African operations was standing at $106 million.
The operating free cash flow from Africa was $200 million, as compared to the past year’s $196 million.

Credit: This article originated from www.balancingact-africa.com

 





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