Bharti Airtel East Africa units’ revenues for the nine months to September increased to $473 million, driven by a rise in data revenue within the period to $212 million.
The regional units also saw their profits rise to $102 million, from a loss of $91 million over the same period in 2017.
This comes as good news after the Indian telecommunications giant picked Goldman Sachs, J.P. Morgan and four other banks to manage the initial public offering of its African unit. The other banks are Absa, Barclays Bank, Citigroup and Bank of America Merrill Lynch.
Raghunath Mandava, chief executive of Airtel Africa, said they stepped up their capital expenditure during the quarter to build a formidable long-term evolution (LTE) network.
“This positions us well to expand our growth journey to enhance customer experience with the best-in-class network and products. This quarter also marks the first time we are disclosing our regional and product-wise performance, as it provides a more holistic view of our operations across the continent,” said Mr Mandava.
During the quarter, the East African units incurred a capital expenditure of $53 million, primarily on network expansion, while their operating cash flow for the quarter was $49 million, lower than last year’s $71 million.
The voice revenue for the Kenya, Tanzania, Uganda and Rwandan units grew by 6.2 per cent to $169 million, compared with $159 million in the corresponding quarter last year.
The company attributed this to minutes-on-network growth of 41 per cent at 30.4 billion as compared with 21.6 billion in the corresponding quarter last year.
Data revenue, on the other hand, grew by 24.9 per cent to $72.8 million in the quarter between June and September, from $58.3 million in corresponding quarter last year, mainly driven by total megabytes on network growth of 73.2 per cent at 36.6 billion MB compared with 21.1 billion MBs in the corresponding quarter last year.
“Data customers grew by 27 per cent to 10.3 million compared with 8.1 million the corresponding quarter last year,” the telco said in its latest financial statement.
Airtel had more than 8,200 network towers at the end of September as compared with 7,389 in the same quarter in 2017, while its mobile broadband base stations stood at 13,367, up from 6,779 in corresponding quarter last year.
“For the quarter ended September 30, 2018, revenues from East Africa were at $302 million, reflecting a growth of 10.9 per cent compared with $272 million in the corresponding quarter last year, which is mainly driven by customer growth of 24.3 per cen,” the company added.
East Africa’s customer base rose by 24.3 per cent to 41.3 million compared with 33.2 million last year.
In the quarter ended in September, Airtel’s Africa unit, which turned profitable for the first time last year, saw its revenue grow about 11 per cent, with mobile data traffic expanding 53 per cent and operating margins growing to 37.1 per cent.
The telco seeks to list on the London Stock Exchange, driven by its falling operating cash flow, high capex, and ballooning debt, which analysts say is now creating a need to raise funds for raising equity through its Africa unit’s IPO.
Barely a month before this week’s appointment of bankers, the Africa unit raised $1.25 billion from six global investors, including Japanese conglomerate SoftBank, American private equity firm Warburg Pincus Llc and Temasek Holdings, an investment firm owned by the government of Singapore.
The fundraising, through a primary equity issuance, now values the company at $4.4 billion and will be used to reduce the existing debt of about $5 billion and grow its Africa operations, Mr Mandava said, adding that the company is looking to go public on an international stock exchange.
“This primary equity issuance clearly underlines the confidence of leading global investors in Airtel Africa’s successful business strategy and its potential to sustain growth and profitability.
“The transaction will help us further deleverage our balance sheet and boost our capacity to upgrade networks, expand coverage in different markets and achieve rapid growth of Airtel Money across our operations,” Mr Mandava said.
The Indian telecommunication giant, which has a presence in nine African countries said the subsequent market debut will also be used to reduce debt further but will not involve any sale of existing shares by Airtel.