Airtel Africa has announced its intention to infuse up to USD 825.0 million in fresh capital into its African operations.
This strategic decision follows a challenging first half of the year, during which the company faced a net loss of USD 13.0 million. These losses were primarily attributed to significant currency depreciation in key markets such as Kenya, Tanzania, Zambia, Malawi, and Nigeria, as well as the impending repayment of a USD 550.0 million debt due in May 2024.
Airtel Africa, in an effort to stabilize its financial position and reaffirm its dedication to the African market, has released unaudited financial statements underscoring the company’s unwavering commitment to its African strategy. Despite these setbacks, Airtel Africa remains resolute in its investment in African operations to ensure future growth and value delivery to its customers. The company has allocated between USD 800.0 million and USD 825.0 million for capital expenditures in the current financial year, with no intentions of reducing this commitment.
One noteworthy area of investment for Airtel Africa is the acquisition of spectrum, including 5G network infrastructure. In Kenya, Airtel Networks Kenya Ltd has obtained 60 MHz in the 2,600 MHz spectrum band for a 15-year period, and in Tanzania, the company has secured 80 MHz in the 3,500 MHz band along with two blocks of 15 MHz in the 2,600 MHz band. These investments underscore Airtel Africa’s determination to stay at the forefront of technological advancements in the telecommunications industry.
However, the challenges faced by Airtel Africa extend beyond financial losses. In Uganda, the company grapples with regulatory requirements mandating the sale of 20.0% of its shares to the public within two years of obtaining its operating license. The National Social Security Fund (NSSF) Uganda has invested USD 52.7 million, equivalent to 10.6% of the 20.0% stock available, in Airtel Uganda.
One of the most significant challenges for Airtel Africa has been the sharp depreciation of currencies in several African countries. The Nigerian naira, in particular, depreciated by 75.2%, significantly impacting the company’s revenues. Other currencies, such as the Kenyan shilling and Zambian Kwacha, also experienced substantial depreciations of 22.6% and 23.4%, respectively, from January 3, 2023, to November 7, 2023.
Despite these challenges, Airtel Africa has demonstrated resilience and adaptability. Voice revenue decreased, but data revenue increased, driven by substantial growth in mobile money revenue in East and Francophone Africa. In East Africa, the company saw a revenue growth of 20.6%, reflecting positive trends in voice, data, and other revenue streams.
To address its financial situation proactively, Airtel Africa initiated the early redemption of USD 505.0 million in bonds, resulting in savings of USD 26.0 million on interest payments. Consequently, the company now holds USD 550.0 million in outstanding bonds due in May 2024.
Airtel Africa’s steadfast commitment to its African operations and its willingness to invest significant capital amid financial challenges demonstrate a long-term vision and a determination to navigate the complexities of the African telecommunications market. The company’s resilience, coupled with its strategic investments in technology and market expansion, positions it for continued growth and value delivery to its customers. This telecommunications giant’s bold move is a testament to its belief in the immense potential of the African market and its readiness to overcome obstacles on its path to success.
