Airtel Africa dodges the bullet – set to raise US$1.25 bn from IPO, gets Singtel investment in advance

26 October 2018

Top Story

Airtel Africa has always looked like the “sick MNO” out of all the large operators in Sub-Saharan Africa. This week it surprised everyone by announcing a plan to refinance, building on its first profits since Bharti Airtel acquired the company 8 years ago. Russell Southwood looks at one of the new investors – Singtel - and the challenges that lie ahead for the newly refreshed Airtel.

Bharti Airtel is carrying out a two-stage fundraising process for its Airtel Africa. The first stage has been Singtel paying US$250 million for a 39.5% stake in the company, valuing it at around US$4.4 billion.

The second stage of the investment is to raise another US$1 billion from six global investors including Warburg Pincus LLC (a large US private equity firm), SoftBank Group International and Temasek Holdings (the investment arm of the Singapore Government and the largest shareholder in Singtel). The aim of the fundraising would be to pay down existing debt of around US$5 billion.

So where did this sudden turnaround come from? In 2017/18, the parent company Bharti Airtel – under pressure from challenger Jio – started to suffer losses. By contrast, Airtel Africa shored up its balance sheet by turning in its first profit ever.

This turnaround came from a number of things happening. Consolidation in the market meant that it was able to create a 50/50 merged company with Millicom (Tigo) in one of its more profitable markets, Ghana. It also bought out Millicom’s Rwanda subsidiary.

Most strikingly, it upped its data game. Although it has 3G in all of its 14 countries, it has now rolled out 4G to 8 countries and 6 of these roll-outs were done this year. As a result it saw a 22% increase in data revenues and a 90% surge in use. It also saw a 31% growth in its Airtel Money customers, of which there are now 11.4 million. 93% of its total active Airtel Money base is in Uganda, Tanzania, Rwanda, Malawi, DRC, Gabon, Kenya and Madagascar. Overall, Airtel Nigeria generates around 30% of its revenues and it will have been helped by the troubled existence of what is now called 9mobile (after the exit of Etisalat).

The bad news is that certain problems have not gone away. I would like to present a more detailed account by country market but Airtel’s website does not contain a complete set of subsidiary accounts and the company’s multi-layered subsidiary structure make MTN and Vodacom look like models of complete transparency. Links showing several subsidiary company accounts are simply broken.

Airtel Kenya has never made a profit from the day the original company Kencell was launched . In the words of a report in Kenya’s Standard newspaper on 25 August this year:”The results show that Airtel Kenya continues to be the Black Sheep among the subsidiaries…having failed to find the magic stroke to turn its fortunes around.”

Sautitech on 21 August this year reported that its losses in 2017 were US$59.5 million, down from US$79.4 million in 2016. Airtel Tanzania had a loss of US$48.06 million in 2017 down from US$56.4 million in 2016. Indeed there were reports that Airtel would dispose of these two subsidiaries.

The scale of the competitive gap in Kenya is perhaps best illustrated by the number of base stations the three main competitors had at the time of these report:

Safaricom:        4,000

Telkom Kenya   1,581

Airtel Kenya       1,548

The Singtel relationship comes out of the company’s investment in the parent company Bharti Airtel. There must have been a growing realization that if it was to win back market share from Jio and sort out its investment in Africa, it needed more investment. The ability to demonstrate that Airtel Africa could turn a profit must have been the key to unlocking the new capital. The big question is whether it can repeat this kind of performance year after year.

In a Nikkei Asian Review report of 14 December 2017, Singtel’s CEO International Arthur Lang talked about making large enough investments to make co-operation work. The kind of co-operation envisaged is perhaps illustrated by the announcement earlier the same month that Singtel and (the companies it has shareholdings in) Optus, AIS and Telekomsel had signed an MOU to push esports and gaming content creation and distribution across APAC and India.

Lang said that Singel was looking for equity investments in digital businesses like mobile payments and gaming among other areas:”…in 2020 or 2030 our new associates will be digital companies, not telecommunications companies.” The same month it entered a strategic partnership with Mobike, a Chinese bicycle sharing company to roll out regionally and said it was looking to create some kind of regional mobile payment platform in Asia.

Lang concluded his interview by saying something that African mobile operators may need to pay more heed to:”Even taxi-sharing companies can get you a pizza…If Singtel today only provides communication service, we need to rethink.”


Digital Content Africa is a fortnightly e-letter covering TV and film, music, social media, media, digital advertising and other digital content and services. It’s essential reading for anyone interested in Africa’s digital transition. We have already produced 121 issues and these can be viewed on this link

Typical Top Stories will keep your finger on the pulse and have included: 

Odanga Madung, Odipo Dev on its charting of celebrity engagement in Kenya and what it costs to buy celebrity influencers

Nigeria’s music streaming services continue to grow despite COSON chaos, regulatory barriers and Etisalat crash

Kenya’s Viusasa wants to be the one-stop shop for local content that Kenyans love but the data price barrier has yet to crumble

South Africa’s Ogle doesn’t want Netflix customers – Hot-spot downloading for mid to low end users scared of data costs

Paradise Game’s Sidick Bakayoko on Cote d’Ivoire’s 1 million gamers and promoting Africa’s games developers internationally at Gamescon and Paris Games Week

Nigerian Forest Media’s mobile TV service hits 2 million views in Ghana and Liberia with a focus on lifestyle, comedy and children

Congolese diaspora entrepreneur launches fashion platform to get ethical African and global designers selling across the planet

Ringier’s news and info platform Pulse gets 170 million video views per month with short-form content:”Online video is the most important trend for Africa for media advertisers”

If you would like to subscribe, just send an email to info@balancingact-africa.com with Digital Content Africa in the title line.

Smart Monkey TV is our web TV channel that tracks what Africa’s Creators and Innovators are saying and doing. It now has 2239 subscribers. The latest video clip interviews that are relevant for you are below. Subscribe by clicking on this link:

Itumuleng Mabote on how start-up Ubutouch creates trusted, smart access to the home

Dawit Abraham, Qene Technologies on its 3D mobile game Kukula, an African game to conquer the world

Django Bathily on Sira Labs, an incubator network to connect start-ups across Francophone Africa

Samuel Odeloye and Ladi Ojora, Roadpreppers on Lara, a chatbot to find transport solutions

Araya Lakew on Mekina, an Ethiopian online car site with 450,000 users

Habtamu Tadesse, CEO, Zay Ride on launching Ethiopia's first taxi hailing service and raising money

Izu Osuigwe, CEO, Forest TV on its African channels VoD platform and its new satellite offering

Adewale Yusuf, CEO, Techpoint.ng on creating demand for tech use - 10,000 attend 2 of its events

Hruy Tsegaye, iCog Labs on creating Africa's 1st robot: a child speaking Amharic to tell stories

Samatar Abdi Osman on how Djibouti incubator CITD helps local start-ups to succeed

Abdihakim Ainte on Mogadishu's iRise virtual incubator and start-ups it has helped

Dayo Akinrinade & Ray AjikeAjoke on start-up Africlick, a dating app for global Africans

Karanvir Singh on how Yego Moto provides Rwanda's moto taxi drivers and users a better service

Bilen Shifferaw, Gebeya on winning outsourced developer work on a game, mobile app & crypto currency

Toro Orero, Silicon Valley's DraperDarkFlow on its African Start-Up investments & what it looks for

EchoVC's Eghosa Omoigui on the risks posed by certain investors to African start-ups

Ido Sum, TLcom on its first three African start-up investments and why it made them

Afrobytes co-founders Ammin Youssouf and Haweya Mohamed choose 3 African start-up opportunities

Tope Omotolani and Sola Oyawale, Farmcrowdy on raising diaspora investment for small-scale farmers

Mobile money start-up MFS's founder Dare Okoujdou on how he raised US$4.5 million

Kelechi Ofoegbu on Impact Space Accra's expansion plans and barriers for Ghana's start-ups