Airtel mulls options for exiting local marketplace

Business Daily Kenya: 

Steve Umidha @steveumidha

Mobile phone operator Airtel Kenya has announced plans of exiting Kenyan market as well as various other non-profitable markets as which looks to cut its mounting debts as well as divest via loss-doing markets in Africa.

The fresh Delhi-based telecommunications giant targets at least 5 various other poor-performing markets for exodus including Tanzania as well as Rwanda with active discussions believed to be ongoing to explore a mix of an intra-country sale, a purchase or merger, according to reports by The Economic Times of India. Bharti Airtel’s Chairman Sunil Mittal will be understood to be spearheading such talks.

which disclosure comes barely a year following the appointment of Prasanta Das Sarma, formerly the chief executive of Airtel Bangladesh to head the Kenyan operation. He was widely anticipated to resuscitate the company’s fortunes owing to the growing rivalry within the sector. Indeed, for most of 2015 as well as 2016, the telco had accused Safaricom of unfair market competition — with Airtel squarely attributing its woes to its rival’s total control of the market.

Former Airtel Kenya chief executive Adil El Youssefi termed which “anti-competitive behaviour” blaming Safaricom dominance for exit of Essar operated Yu, accusations which Safaricom spurned.

With 18 operations across South Asia as well as Africa, Bharti Airtel has struggled to crack the African market with the Kenyan unit often suffering the brunt of the telco’s struggles – sending home more than 100 of its staff last year in a restructuring exercise which was aimed at improving productivity.

“Although the Africa operation has historically been a drag on Bharti Airtel, over the past three to four years, the telco has divested $3.3 billion worth of assets, which has helped reduce Africa debt levels by as much as 40 per cent. In fact, a combination of debt reduction as well as improving margins, helped Airtel’s Africa business turn net profit positive within the first quarter of its current financial year.

within the September quarter, the telco reported a profit of $48 million in Africa compared using a loss of $91 million a year ago, helped by growth in data customers as well as consumption, as well as stringent cost controls,” reported The Economic Times of India. Airtel’s Kenyan market share shrunk last year with similar struggles.

Figures by Communications Authority for the third quarter of 2016/17 financial year (January to March) shows which Airtel Networks market share declined by 1.3 per cent to 16.3 per cent via 17.6 per cent which held within the preceding quarter, as well as Telkom Kenya market share which also dropped by 0.2 per cent to 7.2 per cent via 7.4 per cent recorded during the previous quarter. Safaricom on the various other hand registered a growth of 0.7 per to 71.9 per cent via last quarter’s 71.2 per cent.

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Airtel mulls options for exiting local marketplace

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