50 million Africans dial Airtel

The implementation of India’s low-cost telecom model in the African market seems to have paid dividends for the country’s largest company in the sector, Bharti Airtel, with the company crossing 50 million subscribers in mobile operations.

Bharti acquired Zain’s assets in 16 African countries in June 2010, with a subscriber base of 42 million, brought down to an active user base of 36 mn. In these 17 months, it has got 14 million users, on the back of low and innovative rate plans, it said. It has 173 million subscribers in the Indian market.

After entering the African market, the company had slashed mobile call rates, making competitors to d likewise. It has also opted for an outsourcing model in Africa to maintain low cost, similar to the one for the Indian market.

“This milestone demonstrates our commitment to Africa. We have made significant investments in our operations and brought world-class IT, networks and customer care partners,” said Manoj Kohli, joint managing director and CEO (international).

Bharti has already invested about $1 billion in network infrastructure during the current financial year. It had acquired Zain at an enterprise valuation of $10.7 bn.

“Bharti has been consistently adding about two million subscribers per quarter in its Africa business, leading to increase in minutes of usage. We remain positive on Bharti,” said a research analyst from Angel Broking.

However, the Africa operations are still producing losses, not profit. For the third quarter ended September, the loss was Rs 426 crore; it was Rs 378 crore in the same quarter last year. Revenue from Africa in the quarter increased to Rs 4,703 crore, from Rs 3,890 crore in the corresponding period. Operating margins improved to 26.4 per cent, from 22.9 per cent a year before.

Bharti has fixed a target of $5 billion (Rs 25,000 crore approximately) in revenue and $2 billion in operating profit by the financial year ending March 2013.

"We are making good progress...We are actually more confident," Kohli had said at the third quarter results.