Bharti Airtel has struck yet another deal to expand presence inorganically in Africa by signing an agreement with the Warid Group to fully acquire Warid Congo SA for an undisclosed amount.
The agreement marks the second in-country acquisition by Airtel in Africa. It had acquired Warid’s Uganda operations earlier this year. In-country acquisition means inorganic expansion in a market where it is already present.
The latest acquisition will make Airtel the largest mobile operator in Congo Brazzaville with around 2.6 million customers. At present, Airtel is the second-largest operator in the country with over 1.6 million customers, while Warid is the third-largest with around one million customers.
Shares of Bharti Airtel, the fourth-largest mobile operator globally by number of subscribers, were trading at Rs 358.5, down 1.87 per cent on the BSE, in a weak Mumbai market at 11:31 am on Tuesday.
Manoj Kohli, MD and CEO (International), Bharti Airtel, said, “This acquisition is in line with our stated strategy of strengthening our market position through in-country acquisitions, as and when suitable opportunities comes along. We are at an advance stage of successfully integrating Warid’s Uganda operations with that of Airtel and look forward to a similarly swift transition in Congo Brazzaville as well.”
Sriram Yarlagadda, board member, Warid, Congo Brazzaville, said, “The customers can look forward to enjoy affordable voice tariffs and 3G data services on the most extensive network.”
With presence across 17 African countries, Airtel is the largest telecom service provider across the continent in terms of geographical reach and had over 66 million customers at the end of quarter ended September, 2013. It, however, is smaller than South Africa’s MTN which has more subscribers and revenues in the continent.
Airtel forayed into the African region in 2010 by acquiring Kuwait-based Zain Telecom’s African business for $10.7 billion. In the same year, the firm acquired 70 per cent stake in Warid Bangladesh and it was the first Indian company to enter Bangladesh’s telecom space at that time. A few months ago it acquired the balance stake in the Bangladesh operations.
The latest deal shows it is putting more money in Africa to consolidate its position. Early this year, Bharti Airtel Nigeria B.V., a wholly owned subsidiary of Bharti Airtel, acquired an additional 13.36 per cent equity stake in Airtel Networks Ltd, Nigeria, from certain existing shareholders, for an undisclosed amount. Post the transaction, Bharti Airtel Nigeria B.V. holds 79.06 per cent stake in Airtel Networks.
Bharti’s consolidated net profit fell to Rs 512 crore in Q2 FY14 from Rs 721 crore a year earlier even though EBITDA margin increased to 32 per cent, higher than 30.6 per cent in the year-ago quarter.
Bharti Airtel sold 5 per cent stake for $1.26 billion to a sovereign wealth fund from Qatar earlier this year to strengthen its balance sheet.
(Edited by Joby Puthuparampil Johnson)