IPO Or Not, Airtel Africa Is Poised to Surf Africa’s Mobile Wave

By November 1, 2018 February 22nd, 2019 The Weekly
Airtel Africa headquarters

It’s gonna take a lot to drag Airtel Africa away from Bharti Airtel – specifically, US$1.25 billion for a minority stake in the Indian telco’s African market subsidiary.

With a host of investors the likes of SoftBank, Temasek Holdings, Warburg Pincus, and Bharti stakeholder SingTel, Airtel Africa can take some time to do the things it never had – specifically, a public listing in the UK.

Okay, okay, no more Toto references.

The deal is expected to put some wind back in the sails of parent company Bharti Airtel, helping it shed some of its debt. It will also help Bharti push back on what continues to be intense pressure on India’s telcos from rival Reliance Jio, notes Insight Provider Warut Promboon of Bondcritic, in an Insight on Smartkarma.

The Money Is Mobile

Despite Bloomberg reporting that Airtel Africa’s IPO has been pushed back to the second half of next year, company officials insist that the listing will go ahead as planned and that they’re feeling “very confident about the IPO process.”

Whether the IPO is delayed or not, Airtel Africa’s confidence is not unfounded. The company has been delivering solid results, with a presence in 14 countries and 91.4 million subscribers in the continent as of September 2018. It saw a 10.9 percent year-on-year increase in revenue, hitting US$824 million.

And it’s not just its mobile business that’s flourishing. Airtel Money, its mobile payments and money-lending arm has 12.9 million active subscribers, most of them coming from Uganda, Tanzania, Rwanda, Malawi, Gabon, Kenya, and Madagascar.

Users can make peer-to-peer payments, pay bills, and in some cases even make purchases in stores, with just their mobile phones. The company claims to have over 240,000 agents where people can deposit or withdraw money from their mobile accounts.

It also offers money-lending services, having disbursed a total of US$14.6 million during financial year 2017-18 to over 1 million customers, according to the company’s report for that period.

Africa Is Open for Business

Airtel is well-positioned to capture the opportunity, being the second-largest telco in Africa. But it’s still far from alone in that space, with several telcos and established payment players jumping on the African opportunity.

Besides pioneer M-Pesa, examples include HaloPesa, a payments service from Tanzanian telco HaloTel, which has partnered with Visa, and EasyPay in South Africa, which uses MasterCard’s Masterpass digital payment scheme.

And let’s not forget China. The country is making significant investments in Africa as part of its Belt and Road Initiative, and that includes no lesser a figure than Jack Ma – the Alibaba founder just inked a deal with Rwanda to establish Africa’s first electronic “World Trade Platform” in the country, opening up trade opportunities for local small businesses.

Unsurprisingly, Ant Financial is a big piece of that puzzle, sharing “expertise in inclusive financial tools, such as mobile payments, to support the Rwandan digital economy,” according to Alibaba.

Wait!  There’s more coverage about Bharti Airtel on Smartkarma. Dig deeper by exploring some of the investment research network’s Insights listed below.


 

More Insights by Smartkarma

Sign up or log in to Smartkarma to read more about Bharti Airtel.

Bharti Airtel: Saved by Africa
The Indian telco has had less than stellar results in its home market. This latest deal should help ease some of the pressure.

Indian Telcos Struggle as Jio Gains More Ground. Bharti Doing Relatively Better than IDEA
Reliance Jio’s juggernaut is putting the squeeze on the competition in India.


Get a Different Perspective

Sometimes, it helps to take a step back and take a wider look.

Bharti Airtel Delays IPO of $8 Billion Africa Business
An equity rout seems to be derailing and delaying IPOs left and right. Airtel Africa’s listing could be one of them.

The Africa Opportunity
The continent remains challenging for doing business but there’s plenty of opportunity to be found.


 

Stay up-to-date with weekly news, analysis, and Insights from Smartkarma, the Global Investment Research Network.

Subscribe to The Weekly

Leave a Reply