Table of Contents
Key Points:
- After facing losses in the previous year due to economic challenges, Airtel Africa, under the leadership of Olusegun Ogunsanya, reported a profit of $31 million in the first quarter of 2024.
- The company’s turnaround was driven by a surge in mobile money and data services, which collectively boosted the Average Revenue per User (ARPU) and expanded the customer base.
- New CEO Sunil Taldar is set to explore new business opportunities, particularly in enterprise services and data center operations, to sustain and amplify Airtel Africa’s growth trajectory.
After grappling with losses in 2023 due to currency devaluation in several of its key markets, Airtel Africa has staged arecovery in the first quarter of 2024.
Under the guidance of the outgoing CEO, Nigerian executive Olusegun Ogunsanya, the telecom giant reported a $31 million profit after tax, marking a turnaround from a $151-million loss in the same period last year.
The company, which has operations across 14 African countries, faced continued macroeconomic challenges, including currency devaluation and rising fuel costs, particularly in Nigeria. These factors led to a 16.1-percent drop in revenue, which totaled $1.15 billion for the quarter ended June 30, 2024.
Despite these challenges, Airtel Africa has implemented measures aimed at cost reduction and energy efficiency to curb network expenses. These initiatives are crucial as the company navigates ongoing economic turbulence.
Fostering growth through mobile and data services
The company’s recovery has been driven by its data and mobile money services. During this quarter, mobile money customers surged by 14.9 percent to 39.5 million. Data revenue reached $409 million, while voice revenue stood at $476 million.
The mobile money segment particularly shone, with revenues climbing to $22 million, bolstered by strong performances in East and Francophone Africa.
The increase in data and mobile money services also boosted the Average Revenue per User (ARPU), underlining the growing demand for these services among Airtel’s customer base. The number of data customers grew by 13.4 percent to 64.4 million.
Expanding infrastructure and exploring new opportunities
Airtel Africa’s commitment to enhancing its service offerings is evident in its continued infrastructure development, with more than 5,600 kilometers of fiber cables laid.
This expansion is part of a broader strategy to not only improve connectivity but also to delve into new business areas like enterprise solutions, fibre networks, and data centres.
The recent appointment of Sunil Taldar as the new CEO in June 2024, following Olusegun Ogunsanya’s tenure, marks a new chapter for the company. Taldar’s immediate focus is on identifying and exploiting new business opportunities to drive further growth, particularly in the enterprise sector and data centre operations. In line with these goals, Airtel began constructing a new data center in March 2024, scheduled to be operational by Q1 2026.
Market Reaction and Future Outlook
Despite the positive earnings report, Airtel Africa’s share price dipped by 10 percent in pre-market trading, indicating investor caution amid the broader economic challenges. The upcoming Q1 earnings call on Thursday is anticipated to provide further insights into the company’s strategies to maintain its growth trajectory and manage operational costs effectively.
Airtel Africa’s first quarter results of 2024 illustrate a company resilient in the face of adversity, ready to leverage its strengths in mobile and data services to secure a prosperous future in the dynamic African telecom market.
