- Airtel Africa, a telecommunications and mobile money services provider reporting results for the half-year ending September 30, 2024, has announced the renewal of tower lease agreements with American Tower Corporation (ATC).
- This 12-year extension covers approximately 7,100 sites across Nigeria, Uganda, Kenya, and Niger, ahead of the current agreements’ expiration in 12 to 24 months.
- According to Airtel, the contractual terms include focus on renewable energy solutions, particularly for a significant number of sites in Nigeria, to reduce diesel dependency and operating costs.
Airtel reported that significant fuel price increases in its markets contributed to a drop in EBITDA margins to 45.8%, down from 49.6% in H1 2024. Since May 2023, petrol prices in Nigeria have increased by more than 400%.
Airtel Africa’s group revenue in reported currency declined by 9.7% but a profit after tax of $79 million. Mobile money revenue grew by 28.8% in constant currency and subscribers rose to 41.5 million.
Additionally, the impact on profit after tax in the first year of the renewal is anticipated to reach $120 million to $130 million, with half of this expected in FY 2025. Airtel operates in 14 African countries, focusing on East, Central, and West Africa.
Airtel Africa also commented that the renewals ensure they continue to benefit from contract structures, including the proportion linked to foreign currency.
This renewal proceeds despite an ongoing investigation by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission into Airtel and ATC over potential anti-competitive practices. However, officials have reportedly indicated that the new agreements are separate from the probe.
As of the end of September 2024, Airtel Africa had repurchased 61 million shares for $88 million as part of its share buyback programme of up to $100 million, which commenced in March 2024.
Under the same programme, it acquired 8.6 million ordinary shares from Citigroup Global Markets Limited in April 2024. For the quarter ending June 30, 2024, Airtel Africa purchased an additional 21 million shares, totalling $29 million.
The group also reported compliance with the Nigerian Communications Commission (NCC) directive to block SIMs not linked to a National Identification Number (NIN) and to limit active SIMs to four per customer. This directive had a negligible impact on group revenue.
However, the NIN-SIM verification exercise caused Nigerian mobile network operators to lose 64.3 million subscriptions, as NCC concluded the programme on September 14, 2024.
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