Bharti Airtel has entered into a definitive agreement with Warid Group to acquire Warid Telecom Uganda Ltd for an undisclosed amount, to strengthen its presence further in Africa as the second largest telecom firm in the continent. The agreement is subject to regulatory and statutory approvals.
At present, Airtel has 4.6 million customers in Uganda and through this acquisition, it will be taken to over 7.4 million with a market share of more than 39 per cent, according to a Press statement issued on Tuesday.
This is the first in-market acquisition of Bharti Airtel, which means inorganic expansion in a market where it is already present.
“We are extremely pleased with this development, which offers Warid consumers added benefits like wider network coverage, most extensive 3G network, and world class products & services from one of the world’s largest mobile services providers. This is a win-win for Warid customers who will now benefit from being part of a 7.4 million combined user base in Uganda,” said Mohammed Nahayan, board member at Warid Uganda.
Founded in 2006, Warid Telecom Uganda provides voice and data services (for fixed lines and mobiles) using 3G/EDGE technologies, as well as info-entertainment services and mobile money services. It is a subsidiary of Warid Telecom International LLC.
In 2009, Essar Group said it would acquire a majority stake in the Warid Congo SA and Warid Telecom Uganda for an enterprise valuation of around $318 million. But the deal did not materialise.
“This development will translate to a healthier telecom sector in Uganda, which will be ready to invest and grow in wireless broadband & m-commerce services,” said Manoj Kohli, MD and CEO (international) at Bharti Airtel.
Delhi-headquartered Bharti Airtel provides mobile services in India, Sri Lanka and Bangladesh besides the African continent, and had more than 269 million customers at the end of March 2013. Airtel made foray 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.
The latest deal shows it is putting more money in Africa to consolidate its position. Only last month, 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.
Airtel Networks Ltd (formerly Celtel Nigeria Ltd) is the single largest African telecom asset of Bharti Airtel. It clocked revenues of Rs 6,706 crore (over a quarter of Bharti’s Africa revenues) with net loss of Rs 604 crore in FY12. This means the stake buy would be significant in value.
(Edited by Sanghamitra Mandal)