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Airtel announces plans to exit Ghana, sells 100% shares to Gov’t

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Bharti Airtel in its board meeting held Tuesday, 27 October 2020 reached an agreement on exiting Ghana and selling its shares to the government.

The company announced the approval of the board for concluding an arrangement with the Government of Ghana wherein Government of Ghana will acquire 100% shares of Airtel Ghana (‘AirtelTigo’ or the ‘Company’) along with all customers, assets and agreed liabilities.

In 2017, Bharti Airtel merged with Millicom’s Tigo in Ghana to become the country’s second-largest mobile operator. The move was aimed at increasing share in the West African country where mobile phone use is one of the highest in Africa, and competition for 37.4 million mobile phone users is fierce.

At the time, AirtelTigo was to serve around 10 million subscribers, with revenues close to $300 million. However, the joint venture has fallen behind MTN and Vodacom in the country. South Africa’s MTN dominates the Ghanaian market, with 47.5% of subscribers.

According to the quarterly results ending 30 September 2020, the telco said its Ghana operations had a customer base of 5.1 million. The company has successively been posting losses for the past four quarters, and the earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter fell to $1.2 million from $1.3 million in the previous quarter ending 30 June 2020. Total revenue remained stagnant at $15.9 million during the quarter. Data customers as a percentage of the total customer base also saw a dip to 56.2% during the period from 59.4% in the June quarter.

In general, the telco has reported a 16.4% revenue growth in constant currency to $1,815 million for the half-year ended 30 September 2020 compared to $1,640 million reported in a similar period last year. Airtel says that it recorded growth in 14 markets across Eastern Africa, Francophone Africa, and Nigeria.

In this case, East Africa revenues were up 21.9%, with earnings before interest, taxes, depreciation, and amortization (EBITDA) growing by 35.1%. In Nigeria, revenue increased by 20.2%, and EBITDA grew by 21.5%. Across Francophone Africa, revenue was up 4.4%, with EBITDA growth of 4.1%. Underlying EBITDA increased 12.8% to $812 million, while constant currency underlying EBITDA growth was 19.3%.

Source: Kenyanwallstreet.com

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