Bharti Airtel says to spend $1 bln per year in Africa

ABUJA Thu May 8, 2014 8:35pm IST

Bharti Airtel Chairman Sunil Mittal walks during an event in Kolkata April 10, 2012. REUTERS/Rupak De Chowdhuri/Files

Bharti Airtel Chairman Sunil Mittal walks during an event in Kolkata April 10, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

Stocks

   

ABUJA (Reuters) - Telecoms firm Bharti Airtel (BRTI.NS) plans annual capital expenditure of $1 billion in Africa in the next few years and will focus on deepening investments in 17 countries there rather than entering new markets, its chairman said.

"We have made massive investments in 17 countries and we spend capital expenditures every year in excess of $1 billion. $1 billion is the plan," Sunil Mittal told Reuters on Thursday.

Bharti entered Africa in 2010 with the $9 billion acquisition of Kuwaiti telecoms group Zain's (ZAIN.KW) operations on the continent. Mittal said Africa represents one-third of Bharti's business.

The firm is comfortable with debt levels of 2.5-2.6 times earnings before interest, tax, depreciation and amortisation (EBITDA) and is weighing options for the sale, leaseback or sharing of its African transmission towers, Mittal said on the sidelines of the World Economic Forum in Abuja, Nigeria.

Bharti faces intense competition from South Africa's MTN (MTNJ.J), which has sold some of its towers, as well as from privately-held Nigerian Globalcom and from Etisalat ETEL.AD, which is based in the United Arab Emirates.

Mobile penetration in Africa is relatively low and a prime attraction for tower companies is to build new towers to reach the significant part of the continent's populace that does not yet own a phone and meet subscriber demand.

"The interconnect regime is changing in many places and in Nigeria also, and when interconnection rates change, revenues drop because the total amount of top line goes down," said Mittal, who is also the chairman and CEO of parent company Bharti Enterprises.

Interconnection rates are the charges for calling from one network to another.

Mittal added that revenue from Africa stood at $4.4 billion in 2013, below the company's $5 billion projection.

(Reporting by Chijioke Ohuocha and Matthew Mpoke Bigg; Editing by Mark Potter)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage