Africell to spend $100m on mobile infrastructure and fintech in Africa
Kampala — African telecom firm Africell plans to spend part of a $100m US credit line on expanding its infrastructure and fintech services, its CEO says.
The 18-year-old company, which has 15-million subscribers across its four African operations, secured the loan in May from the Overseas Private Investment Corporation (Opic), the US government’s private investment fund.
Africell founder and CEO Ziad Dalloul said the money would help fund infrastructure investments for its operations in Uganda, Democratic Republic of Congo, Gambia and Sierra Leone.
It would help the firm expand fintech services, such as mobile payments, micro-insurance and micro-finance, he said.
Mobile money payments, pioneered in Kenya, have expanded rapidly in other African nations where many people do not have bank accounts.
Dalloul said Africell would bid to become the fourth operator in Angola, which was expected to reissue a tender in the next two months after the original tender for the licence was annulled in April.
Angola and Zimbabwe
“We are looking only at markets where we can make a difference,” he said, saying this included Angola and Zimbabwe.
Angola was attractive because the country’s state-owned Angola Telecom had a large market share that could be vulnerable to a more aggressive private operator like Africell, he said.
“Day one, we can just change the whole thing ... drop market prices, expand into rural areas, provide faster, better service on internet. These are the things we know how to do. So that’s why we are keeping an eye on Angola,” he said.
Africell had $300m, separate from the Opic credit line, to spend on a new market like Angola within the first year of starting business if it secured a licence, he said.
Meanwhile, Airtel Africa reported a quarterly pretax profit on Friday that more than doubled, as the telecoms company signed up more customers for its mobile and data services and was boosted by double-digit growth in Nigeria and East Africa.
The company, which debuted on the London Stock Exchange in June, is backed by investors including SoftBank, Warburg Pincus and Temasek Holdings. It operates in a region that has a large untapped market, while its European peers have been suffering.
Airtel Africa, a unit of India’s Bharti Airtel, said pre-tax profit for the first quarter ended June 30 rose to $167.4m from $80.2m a year earlier.
“The business continues to show momentum and we are confident of delivering sustained growth across voice, data and mobile money, underpinning our medium-term aspirations for revenue and profit growth,” CEO Raghunath Mandava said.
Total revenue rose 6.9% to $795.9m in the three months, boosted by a 9.3% rise in the company’s customer base to 99.7-million, despite a hit from currency translation.
Airtel Africa said devaluation of the Zambian Kwacha, Malawian Kwacha and Central African Franc largely drove a $23m hit to revenue in the quarter.
Up to Thursday’s close the company’s London-listed shares had risen 3% since debut. The company’s shares also made their Nigerian debut with a flotation in Lagos earlier in July.