SoftBank and Singtel are leading a pre-IPO $1.25 billion investment in Africa’s No.2 mobile phone company

Airtel Africa is getting a boost.
Airtel Africa is getting a boost.
Image: Reuters/Mike Hutchings
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Airtel Africa, the subsidiary of the Indian telecoms giant Bharti Airtel, is getting a shot in the arm.

The company has raised $1.25 billion from global investors including SoftBank Group, Warburg Pincus, Singtel and Temasek Holdings. The investment sees the company now valued at $4.4 billion. Singapore’s Singtel, which invested $250 million in this round, has a 39.5% stake in Airtel.

Airtel Africa, which is headed by Raghunath Mandava, says it plans an initial public offering on an international stock exchange, although there is no specific timeline. Money raised from going public, alongside some of the new funding, will go towards cutting down the company’s existing $5 billion debt.

Backed with the new funding, Airtel Africa is looking to double down and “achieve rapid growth” with Airtel Money, its mobile money service. It’s a tack being adopted by other Africa-based telcos looking to shore up conventional voice call revenues by offering mobile money services to boost average revenue per user (ARPU). Indeed, last year, mobile money accounted for 28% of Safaricom’s service revenues while MTN generated around a quarter of overall ARPU across 14 countries from mobile money services, according to a GSMA report.

Airtel also says the funding will boost its “capacity to upgrade networks” as well as “expand coverage” in the 14 African countries where currently has 91 million subscribers. In Nigeria, one of its key markets, Airtel has recently become the second largest operator, marginally overtaking the Nigerian-owned Globacom.

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