Airtel Africa CEO Raghunath Mandava has explained how the telecom operator has achieved better EBITDA margin during the second quarter of fiscal 2019-20.
EBITDA grew 10.9 percent to $719 million with EBITDA margin of 43.9 percent in H1, an increase of 100 bps.
“Our strong customer growth aided by distribution expansion was a key driver behind voice revenue growth. Our investments ahead of the industry in LTE network along with our simple and intuitive customer journeys have helped grow data consumption by 81 percent and data revenue growth by 37.8 percent,” Raghunath Mandava, chief executive officer of Airtel Africa, said.
Operational Efficiency
Airtel Africa said its EBITDA margin expanded by 100bps to 43.9 percent in the first half year, as a result of double-digit revenue growth and cost efficiencies.
Airtel Africa said it follows a cost discipline and it seeks to improve processes with the aim to deliver one of the highest EBITDA margin in the industry.
Airtel Africa adopts technology in a financially efficient manner to optimize capital expenditures.
“We adopt analysis with the aim to minimise the incremental cost of building additional sites and additional capacity. We are looking to limit on-going operating costs per-site by looking at initiatives to save energy costs, convert sites to a grid and consolidate sites already owned,” Airtel Africa CEO said.
Airtel Africa reduced the cost per Mbps through investments in large capacity IRUs and fibre in line with our model of creating huge throughputs. It established shared service centre in India.
Capex
Airtel Africa said it launched 4G services in Democratic Republic of Congo and Niger over the last 6 months. Its 4G sites now account for 58 percent of total sites as compared to 27 percent in the last year. Airtel will launch 4G services in Tanzania, making 4G services available across 14 countries.
Airtel Africa’s Capex reached $246 million in the first half of the year, excluding spectrum acquisitions.
The Group strategy to invest in the 4G network through single RAN technology has resulted in better 4G coverage and enhanced the network’s capacity, leading to high-speed data being made available to more of our customers. With continued investment in 4G network across our footprints, 4G sites now contributes 58 percent of total sites
Airtel Africa completed its network modernization in nine countries including Uganda, Kenya, Zambia, Malawi, Rwanda, Congo B, Gabon, Madagascar and Seychelles. The group increased the number of sites on fibre and long-distance fibre capacities which has helped the Group to build strong redundancies.
Airtel Africa also acquired additional spectrum, by adding 2600 MHz frequency (20 MHz) in Nigeria, 1800 MHz (5 MHz) in Chad and 2100 MHz (10 MHz) in Malawi. Airtel Africa continued the spectrum refarming activities to maximize network capacity.
Data ARPU increased by 18.5 percent, with every region contributing to data ARPU growth. The percentage of 3G and 4G enabled smartphones increased to 31 percent from 27.8 percent in the previous year. This has resulted in data customers increasing by 17.7 percent to 31.9 million which now represent 30.7 percent of total customer base.
Airtel Africa today said its revenue rose 8.4 percent to $844 million in the second quarter of fiscal 2019-20.
This was the 7th consecutive quarter of double-digit constant currency growth.
Airtel Africa’s mobile customer base grew 10.4 percent to 104 million.
Airtel Africa achieved double-digit growth in Nigeria and East Africa. Airtel Africa posted a slight decrease in revenue in Rest of Africa.
Airtel Africa’s revenue rose 3.2 percent in voice, 37.8 percent in data and 46.5 percent in mobile money.
