Safcom is the best run company in EAC how ever it gets regulatory support from GoK unlike Mobile companies in Tz who are left to the whims of Free Trade..
Why would Airtel and Telkom continue to make losses while only 1 company makes profit..
Safari on has assets worth more than $8B, while Airtel has invested in assets worth less than $65m by 2017, and then they expect to just get a shortcut and steal all of safcom customers just like that ..... Tell you what, Telkom have a better chance if only they cad the financial capital ....
And despite all the network interoperability freedom and lack of a dominant company in Tz, Airtel still makes losses in Tz just like in KE. The difference in losses btn Ke and Tz is $11m
But despite the small investment, back in 2012 safcom had a market share of like 91%, it then dropped to 88% then 75...71... Right now Safcom has a 67% market share if I remember correctly ... So it's not an unkillable monstor like some people would like us to believe.
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Indian telecommunication giant Bharti Airtel reported mixed results in the region for 2017, with its Ugandan unit’s profits growing by almost 30 per cent to $62.12 million, from $44.9 million in 2016, while the Tanzanian and Kenyan operations posted a combined loss of $135.6 million, pushing their accumulated losses to $1.07 billion.
The poor but improved performance of the regional units shows that the firm is still struggling to find a foothold, even as it keeps these units afloat through borrowing.
According to the firm's annual report, Airtel Kenya made a $59.5 million loss in the year to December 2017, down from $79.4 million the previous year.
The Tanzania unit posted a loss of $48.06 million, down from $56.4 million the previous year.
Airtel Kenya’s revenue dipped to $167.59 million from $169.2 million in 2016, as shareholder loans rose to $401.2 million, from $376 million. Its bank borrowing almost doubled to $32 million from $17 million in 2016.
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“As at the end of last year, Airtel Kenya had accumulated losses amounting to $652 million, up from $590 million. The operations of the company continue to depend heavily on from its direct and indirect parent companies for financing.
“This may result in the company’s inability to realise its assets and discharge its liabilities in the normal course of business,” the company said in its annual report for 2017.
The Kenyan unit, which is technically insolvent after last year’s current liabilities of $593.9 million exceeded current assets of $64.6 million, ended the year with a total debt load of $491 million, up from $460 million in 2016.
Voice revenue dropped to $75.01 million, from $78.18 million, while data revenue dropped to $35.50 million from $44.56 million in 2016. Roaming revenue dropped to $7.27 million from $10.2 million.
Airtel’s performance pales in comparison with the market leader, Safaricom, which posted $2.33 billion in total revenue and $553 million in profit after tax for the year to March 2018, driven by M-Pesa and data revenues.
In May, Airtel Kenya was said to have been considering a merger with a smaller rival, Telkom Kenya, as the management sought to take on Safaricom.
In December last year, Airtel said that it was committed to the long-term viability of its operations in Kenya and Tanzania, to ensure that in 2018 all its 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa.
“In Africa, there are a number of countries where we were not a leader or close number two and we decided to correct that. These countries include Ghana and Rwanda, where we did the merger. Discussions are ongoing regarding other countries,” said Airtel Africa chief executive Raghunath Mandava.
Tanzania unit
Airtel Tanzania, which submitted its prospectus last year to the Capital Markets and Securities Authority for a possible listing on the Dar es Salaam Stock Exchange, is also technically insolvent.
The unit’s liabilities exceed its assets, casting doubt on whether it will whet the appetite of investors should its initial public offering request be approved.
Airtel Tanzania, which is the country’s second largest telecommunications firm, saw its revenue drop to $214.49 million last year, from $228.02 million in 2016.
The firm’s liabilities of $635.38 million exceeded its $233.96 million in assets. The telco is said to be seeking to raise $11.02 million, through an IPO — which is way below the $291 million its competitor Vodacom raised last year on the DSE.
“As at the end of 2017, the accumulated losses by Airtel Tanzania stood at $423.18 million, up from $357.16 million. The operations of the company continue to depend heavily on financing from its direct and indirect parent companies.
“Going forward, the management hopes to obtain funds from third parties, meet subscriber number and revenue targets,” the firm said, adding that it has obtained a commitment from its major shareholder for a financial injection into the unit.
The Dar es Salaam unit’s voice revenue dropped to $82.9 million last year from $102.6 million in 2016. Roaming revenue dropped to $5.25 million from $6.23 million.
The firm last year embarked on a network modernisation exercise that saw it incur a cost of $4.58 million, with $555,319 going to the project cost and $4.02 million being the accelerated depreciation of the replaced old equipment.
Borrowing
Airtel Tanzania’s total borrowing rose marginally to $477.37 million, up from $449.07 million.
In Uganda, the telco’s books were positive, buoyed by its rising market share, even though its competitor MTN still controls 54.7 per cent of the market.
Its $65.12 million profit was buoyed by revenue which rose to $306.98 million, from $283.4 million in 2016.
“As at the end of 2017, the company was in a net asset position of $65.11 million. The continuous growth in profits has resulted in the independent stability of the company. This affirms the company’s ability to run its operations as a going concern,” the Ugandan unit said.
Its mobile money division returned a revenue of $50.69 million, up from $35.2 million, a sign of positive growth and uptake of its service that is meant to compete with Vodacom’s M-Pesa. Airtime revenue rose to $134.72 million, from $133.7 million.
It made a $300,065 loss due to unused equipment leased from the Ugandan Towers Ltd.
“Some conditions contained in the terms of sale were not adhered to which resulted in renegotiations,” the Kampala unit said in its financial statement.
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