Indian telecoms giant Bharti Airtel plans to rationalize subsidiary Airtel’s African operations, according to chairman Sunil Bharti Mittal. Those comments combined with already circulating rumors sparked headlines suggesting Airtel is quitting the continent altogether.
Mittal agreed with the interviewer that company’s run in 15 African countries had not been as successful as they had hoped. Back home in India, one of the world’s largest telecoms operators has already seen potential revenue threats thanks to pressure from “disruptors” in the Indian market.
This, coupled with the effects of prime minister Narendra Modi’s decision to cancel all 500 and 1000 rupee notes—thereby affecting prepaid customers—means Airtel may have to buckle down at home before exploring further expansion.
To make its Africa unit more profitable, Bharti Airtel plans to rationalize current operations. That rationalization would likely be carried out via sales or mergers. In Ghana, speculation has already begun that Airtel Ghana and Tigo will merge to be acquired by French operator Orange.
In Kenya, Airtel is a distant number two behind Safaricom, which has around 67% market share and has hinted it may leave the country if its larger rival is not recognized as being market dominant.
Bharti’s African businesses lost $91 million dollars in the third quarter of 2016, a better performance compared to a loss of $170 million in 2015, according to Bloomberg. Still, Africa revenue grew by 3.7% according to Bharti Airtel’s quarterly report from Sept. 30. This growth and plans to roll out a faster 4G network were a sign that Airtel remains committed to Africa, despite some restructuring, according to a statement.
Last year, Bharti Airtel sold its operations in Burkina Faso and Sierra Leone to Orange for a reported $900 million. Then to further cut debt, Bharti Airtel sold 1,350 communication towers and 100 infrastructure development sites to the American Tower Corporation in a $180 million deal.
Airtel provides phone, data and mobile money services in Chad, Congo Brazzaville, the Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Tanzania, Uganda and Zambia.
It may be true that Airtel isn’t abandoning Africa just yet: Airtel increased its ownership of Airtel Nigeria in November last year, purchasing Econet Wireless Limited’s 4.2% shareholding in the Nigerian subsidiary.