In Kenya, Bharti Airtel is finding the telecom ‘waters rough’ mainly because of the dominance of Safaricom. Simply put, Airtel cannot profitably compete against Safaricom under the prevailing circumstances.
It would seem the ‘waters are rough’ on Airtel not just in Kenya, but also in Rwanda and Tanzania. According to Goldman Sachs, Airtel return on investment in the three countries is significantly lower compared to the current average return it gets across other African countries.
Sunil Mittal, the Founder and Chairman of Bharti Enterprises is reported by the Economic Times to have said the telecom is currently actively engaged in exploring options of either purchase, merger, or intra-country sale of its businesses in Kenya, Rwanda, and Tanzania. Mittal says such a move will significantly reduce leverage and increase margins.
Though it is no new news in Kenya, Airtel Kenya has been showing all the possible signs that it will pull out of the country soon. Sometimes there are mixed signals, as in the Q3 of 2016, Airtel Kenya reiterated its commitment to the Kenyan market and had recorded positive revenues in that period. The telecom further said it plans to roll out 4G LTE connectivity across the country; among other African nations.
The Kenyan market was anticipating the existing telecoms will counteract the affordable mobile data package being issued by Faiba4G Mobile, the newest telecom to join the market. If (actually when) Airtel does pull out, it will be a huge disappointment to the consumers who were expecting a reaction by the telecom to Faiba4G Mobile concerning reduced prices for its mobile data.
Bharti Airtel’s interest in the Nigerian market just grew bigger
While the telecom is thinking of exiting the three East African market, the West African country, Nigeria, seems too lucrative for the telecom. Mittal, says Bharti Airtel is mulling over acquiring 9Mobile.
If Airtel does acquire 9Mobile, the telecom will become the biggest telecom, regarding the number of subscribers in Nigeria. Jointly, the number of subscribers on the Airtel Nigeria network and 9Mobile network accounts for 37% of the total mobile service subscribers in Nigeria. The telecom will be larger than MTN, whose current subscriber base stands at 36%.