Bharti Airtel, India’s telecom operator today said it expects to realise revenues of about US $5 billion from its Africa operations by May 2013.
“We are extremely satisfied with our African acquisition. There was an expectation I had given that by May 2013, we will achieve US $5 billion revenue and US $2 billion EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortisation) and we are on track for that target,” said Manoj Kohli, Bharti Airtel CEO and joint MD.
Last year, in the largest telecom takeover by an Indian firm, Bharti acquired Kuwait-based Zain Telecom’s African business for about US $140.70 billion.
The closure of the deal implied that Bharti had received all the approvals from the governments and regulators of each of these 16 nations.
On acquiring top position across the African continent, Kohli said MTN is very competitive but “we are digging our heels and are trying to get our foundation, network customer services right. If foundation is right, leadership is not far away”.
Currently, MTN holds the leading position in Africa’s mobile market.
“We have to bring in our business model, all our business partners like Nokia, Ericsson, Huawei and many others,” said Kohli.
“Our first objective is to build our own tower company which is in the process. In next few months, we will have our tower company ready, registered, all the staffing completed and all the legal approvals etc being done…and that is moving quite well,” he added.
Kohli said that the new tower company will improve its cost efficiency “because as you build (tower company), share tower, the fuel cost comes down, cost of tower comes down. So definitely we are looking at cost efficiency”.
Kohli said there are no plans to have any joint venture for the tower company.
On the scope for increasing tariffs in the African market, Kohli said there are opportunities to increase the rates in some places.
This year, Bharti Airtel would invest between US $1-1.2 billion, said Kohli.
“Africa has been very satisfying. This is the last frontier of the global markets, specifically telecom market, and I think Bharti entry has not only been right but also tangible…you will see in the next 5-10 years,” said Kohli.
Kohli said the African market is under-penetrated and there are some places where there is only 25-30% penetration.
The market has 1 billion population with an average age of just 18 and clearly, it needs voice, communications, wireless broadband, said Kohli.