Bharti Airtel is set to exit the Kenyan, Rwandan and Tanzanian markets in a move to cut down its expenditures and move to profitability, according to analysts speaking to local media in India, where the firm is based.
According to the reports, Chairman Sunil Mittal said the firm may exit Kenya, Rwanda and Tanzania through a sale or a merger or purchase. The firm is also said to be eyeing Nigeria’s 9mobile (formerly Etisalat Nigeria to make it the largest telco in the country.
“Such asset sales could help Bharti reduce leverage further and potentially help expand margins. The three countries where Bharti is looking for exits/M&A options have margins significantly lower vs the current Africa average,” according to a report from brokerage firm Goldman Sachs to India’s Economic Times.
In October Orange successfully completed the acquisition of Airtel Sierra Leone which had started in July 2016. In March, Orange announced closed the acquisition of Airtel Burkina Faso and Airtel Côte d’Ivoire. In March 2017, Millicom and Airtel entered into an agreement for Tigo Ghana Limited and Airtel Ghana Limited to combine their operations in Ghana in a move to see them have equal ownership and governance rights in the combined entity.
Airtel’s struggles in Africa became evident when Farhan Khan, Airtel Africa’s Chief Commercial Officer left the telecom company to join Al-Yah Satellite Communications Company as its new Chief Commercial Officer.
Airtel in June 2010 spent $9 billion to buy out Kuwait-based Zain Group out of 15 countries in Africa, taking $8.5 billion in debt targeting 100 million subscribers and $5 billion in revenue and move to profitability. The telco further added another $5 billion cash to reorganize its Africa operations but by March 2015 the firm was $585 million in losses and a subscriber base of 76.2 million.
These losses led the firm to sell off sell four subsidiaries Airtel Burkina Faso, Airtel Chad, Airtel Congo Brazzaville and Airtel Sierra Leone to Orange. The leaving of the telco’s COO might signal more danger for the telco than anticipated. The rest of the Airtel operations are not doing any good either.
Farhad was expected to drive the telco’s commercial strategy for Africa and to build a strong marketing team to turn around Airtel Africa’s fortunes but things didn’t work as expected.