The manager of Airtel’s Africa operations says that the years of difficulty are behind the company and that mobile internet and banking will buoy the firm’s performance.
Five years after arriving in Africa, and having been through a tough start, Indian telecoms operator Airtel is extending its network and developing innovative offers.
In 2013, after leaving South African telecoms giant MTN, Christian de Faria considered slowing down his pace. However, the challenge that billionaire Sunil Mittal offered him was too tempting to resist.
The group realised the Indian approach was not totally adaptable to Africa
At 62, De Faria settled in Nairobi, where he has been heading Airtel’s 17 operations on the continent since January 2014. His mission is to revive Airtel’s growth by stripping it of its low-cost image and, above all, improve its profitability.
The Africa Report: Airtel’s third-quarter results for 2014 continued to be disappointing. How do you explain the difficulties you are facing on the continent?
Christian de Faria: This period is traditionally less favourable, and our profits were affected by regulatory measures. In Nigeria, for example, Airtel’s largest market, the regulator prohibits promotions, with the aim to limit network congestion.
However, Airtel remains confident that the continent offers numerous opportunities. We’ve enhanced network capacity and expanded network coverage, and we’ve changed information technology platforms. As far as we’re concerned, 2014 was a pivotal year.
You have also completely reorganised your operations.
Yes, we have. All our 17 subsidiaries were grouped into two divisions, one Anglophone and one Francophone. In March 2014, I created new groups based on the position occupied by the different subsidiaries in their markets.
The Democratic Republic of Congo and Nigeria are managed independently due to their size.
Did Airtel commit an error in 2010 by focusing on reducing per-minute charges?
At that time, this strategy had worked in India, where Airtel is ranked number one. However, the group realised that this approach was not totally adaptable to Africa.
Since my arrival, my task has been to Africanise the model to speed up the growth of the group. It’s worth mentioning that Airtel is already the leader in 10 countries.
In other markets such as Kenya and Nigeria, we have to be more aggressive and closer to customers.
What percentage of your earnings comes from data?
Data excluding SMS represents 10% of our earnings, which is a similar level to that of our competitors.
For the year 2013-2014, the volume of data increased by more than 90%. The number of customers using their mobile to surf the internet surged by 50% in one year to 26.4 million.
Up until this year, we weren’t proposing 3G in all our subsidiaries because we didn’t have a licence […]. Our 17 subsidiaries are now well positioned to capture this market.
Can we still consider telecoms as a locomotive of the economy in Africa?
Yes, but in certain countries direct and indirect taxation has be- come a major problem. It exceeds 40% of earnings. Governments don’t realise the scale of required investment as they prioritise short-term strategies.
What will Airtel look like in five years’ time?
Not only do we want to operate one network, we also want to provide our customers with a wide range of intelligent services.
We are striving to include a digital dimension to our offers. However, turnover generated by voice calls continues to rise.
Rural areas still have great potential. Considering the potential of internet development and mobile banking, I’m not worried about the future.