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Airtel denies it plans to exit Kenyan market

Sunil Mittal, Bharti Airtel chairman. FILE PHOTO | NMG
Sunil Mittal, Bharti Airtel chairman. FILE PHOTO | NMG 

Telecoms operator Airtel on Monday dismissed claims that it was planning to exit Kenya, even as it affirmed that it is open to a merger or acquisition to rescue its non-profitable businesses in Africa, including Kenya.

Airtel Africa said in a statement that it was pursuing other options to turn the businesses profitable.

“We had stated that we are open to consolidation opportunities either through acquisitions or mergers, to create a viable business in these three (Kenya, Rwanda and Tanzania) markets. It was never said that we were looking at exiting these markets,” the statement said.

Airtel was making reference to a November 27 story by India’s Economic Times indicating Kenya was one of the three African markets where the telecom firm is not performing positively, and needed to pursue an exit plan.

On Monday, Airtel said it was working to be either the first or second “operator in each country it operates “through market consolidation”.

The company said it had participated in consolidations in the past, including the acquisition of Yu in Kenya and Milicom in Ghana all of which “validates our stand that in-country consolidation have resulted in achieving better market positions”.

Airtel is currently the second-largest operator by subscription with 15.3 per cent market share as at June 2017.

Information, Communication and Technology secretary Joe Mucheru told the Business Daily that the government was yet to receive any official notification that Airtel was planning to quit Kenya.

This is only the latest report that the Indian firm is considering serious overhauls of how it runs its businesses in East Africa. In January, the company’s chairman told Bloomberg that it was considering “stake sales” in some of its African operations.

In the past, Airtel has also threatened to quit Kenya if market conditions did not improve. In 2015, then chief executive Adil El Youssefi said the company would quit Kenya if regulations were not introduced to tame the dominance of market leader, Safaricom #ticker:SCOM.

Things have not improved much since then.

The industry regulator is yet to provide substantive guidance on the matter of dominance.

In the year to December 2016, Airtel Kenya made an after tax loss of Sh8.1 billion, making it one of Airtel’s worst markets in Africa.

An analysis by Goldman Sachs shows that Kenya contributes about five per cent of the group’s revenue in Africa, a drop in the bucket in comparison to Nigeria’s 30 per cent and even lower than Uganda and Tanzania at eight and nine per cent respectively.

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