Africa is emerging as the key growth engine for Bharti Airtel, contributing disproportionately to the telecom major’s incremental revenue and EBITDA even as its Indian business enters a more mature phase.
In the June quarter, Airtel Africa accounted for about 30% of Bharti Airtel’s consolidated revenue but contributed nearly 60% of the year-on-year increase in revenue. Of the Rs 9,077 crore increase in consolidated revenue to Rs 58,539 crore, Africa contributed Rs 5,482 crore, compared with Rs 3,629 crore from India and South Asia.
Africa revenue rose 45% year-on-year to Rs 17,566 crore, while EBITDA jumped 52% to Rs 8,818 crore. Its EBITDA margin stood at 50.2%. In constant currency, revenue growth was 21.1%, indicating that currency movements amplified the reported numbers.
The stronger growth in Africa is significant as Airtel’s Indian business increasingly depends on premiumisation and tariff increases to drive revenue. India wireless ARPU stood at Rs 264 in the June quarter, up 2.6% sequentially.
Low penetration, high growth potential
Analysts see Africa offering a much longer growth runway because of low digital penetration, favourable demographics and rising demand for connectivity and financial services.
Nomura, which raised its Airtel Africa EBITDA estimates by 8-10% for FY27-29, said the African business continues to be on a strong growth trajectory. The brokerage also raised its ARPU assumptions and subscriber estimates, reflecting expectations of continued improvement in monetisation and customer additions.
Motilal Oswal Financial Services said Airtel Africa remains a key long-term growth opportunity, citing low digital penetration, favourable demographics and headroom for financial inclusion, as well as opportunities in home broadband, data centres and enterprise services. It noted that the business has delivered a 20% constant-currency revenue CAGR and 24% EBITDA CAGR over the past five years.
The subscriber base reached 189 million across 14 countries, while data penetration remains well below India, leaving considerable room for smartphone adoption and higher data consumption.
Mobile money adds another layer
Airtel Money provides another growth avenue beyond traditional telecom. Its active customer base reached 56.5 million in the June quarter, while transaction values continued to grow rapidly.
The proposed London listing of Airtel Money could unlock value from the financial-services business and provide a separate valuation benchmark for an asset that is increasingly important to Airtel Africa’s investment case.
India playbook moves to Africa
Airtel is also using capabilities developed in India to improve its African operations. Elara Capital said the completion of the stake swap, which increased Bharti Airtel’s direct economic interest in Airtel Africa to 79%, should further improve group cohesion.
The brokerage highlighted three areas — B2B, home broadband and energy efficiency — where Airtel is replicating products, go-to-market capabilities and cost-optimisation practices developed in India. It expects this to support higher revenue growth and profitability in Africa.
The planned entry of Indus Towers into African markets could also reduce network costs. Motilal Oswal expects Indus to replicate its low-cost Indian tower model and generate savings in construction, uptime and operating costs.
Higher investment, bigger payoff
Airtel is stepping up capital deployment to capture the opportunity. Africa capex rose to about Rs 3,688 crore in the June quarter from Rs 1,034 crore a year earlier.
Motilal Oswal expects double-digit constant-currency growth in Africa to be one of the key drivers of Airtel’s consolidated revenue and EBITDA growth through FY29.
For Airtel, Africa is therefore no longer simply a diversification play. With low telecom and digital penetration, rising data usage, financial inclusion opportunities and emerging broadband and enterprise markets, the continent is increasingly becoming the group’s most important long-term growth market.
The key risk remains currency volatility. Nomura has flagged sharp depreciation of African currencies as a downside risk to Airtel’s valuation, which could dilute the benefits of strong underlying operating growth.
