bharti airtel office vasant kunj ;10/08/2012;new delhi;photo:pradeep gaur/mint

Emma Okonji with agency report

Bharti Airtel has denied recent report that it is exiting its operations from three African markets that were said to be unprofitable.
Although the telecoms company confirmed it was open to consolidation with other players in some countries, it however said it has no plans to exit its operations from some African countries for alleged poor performances of those operations.

In a statement, according to Business Daily Africa, the telecoms company denied it planned to exit Kenya, Rwanda and Tanzania, as had been reported in The Economic Times last week. The statement further said it would instead pursue other options in a bid to turn in profit in the countries.

African industry stakeholders, on getting wind of the purported exit from Kenya, Rwanda and Tanzania, had raised some concerns about the financial muscle of Bharti Airtel, since it is currently bidding to acquire 9mobile, Nigeria’s fourth largest network operator, along side other bidders like Globacom Nigeria Limited; Dangote Group’s telecoms business unit, Alheri Engineering Limited, which has the backing of U.S.-based Blackstone Group with an investment portfolio of $378 billion; Smile Telecoms Holdings, a South African telecommunications group with subsidiaries in Nigeria, Tanzania and Uganda; and Helios Towers, the former owner and operator of the largest telecoms tower network in Nigeria and other countries, before it sold its Nigerian infrastructure to IHS.

Other bidders include Centricus Capital and Africell, a subsidiary of the Lebanon-based Lintel Group of Companies, with cellular communications operations in the Democratic Republic of Congo (DRC), The Gambia, Sierra Leone and Uganda; Dubai-based Abraaj Capital, a private equity firm with an investment portfolio of $11 billion; Teleology Holdings Limited, a special purpose vehicle led by a former chief executive of MTN Nigeria, Mr. Adian Wood, and Ericsson; Africa Capital Alliance (ACA), a leading pan-African investment firm based in Lagos; and The Carlyle Group, a United States-based multinational private equity, alternative asset management and financial services corporation.

In the statement, denying its exit from the African operation, Bharti Airtel said its options was “strategic acquisition”, and reiterated its aim to be one of the two largest operators in each of its African markets.
The India-headquartered company operates in major markets across Africa, providing both communications and mobile money services. In its latest earnings statement for the three months, which ended in September, the company reported improved customer numbers, Airtel Money service uptake and margins across its Africa business as a whole.

The Economic Times had last week, reported tat the telecoms company intended to further boost margins on the continent by disposing of tower assets in five markets and exiting reportedly unprofitable markets like Kenya, Rwanda and Tanzania.

While Rwanda is one of Airtel’s smallest units by connections on the continent (GSMA Intelligence placed the figure at 1.6 million at end-Q3), the operator had 11 million in Tanzania and 7.4 million in Kenya at the same point.
Although second in Kenya’s market, the company is a long way behind market leader Safaricom in terms of connections with an 18 per cent share.

It is also struggling to make inroads into the market leader’s dominant position in the burgeoning mobile money market in the country. Latest statistics from the Communications Authority of Kenya for the three months to end-June showed Airtel Money had 1.5 million users compared to 22.6 million on Safaricom’s m-Pesa.
In Tanzania, Airtel is said to be battling for second position in the market with Tigo and is only 2.5 million connections behind market leader Vodacom. In Rwanda, the company is 2 million connections short of those reported by both MTN and Tigo.