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Bharti Airtel, India’s largest telecom company and service provider in 20 countries across Asia and Africa, announced on Tuesday that it has entered into a definitive agreement with the Warid Group to fully acquire Warid Congo SA. The agreement is subject to regulatory and statutory approvals.
With an investment of $70-80 million, analysts believe this deal would be value-accretive for Bharti, as the acquisition would make Airtel the largest mobile operator in Congo Brazzaville, with around 2.6 million subscribers. At present, Airtel is the second largest operator in that country with 1.6 million customers, while Warid is the third largest with around a million customers.
According to PhillipCapital, the deal consolidates the market and it could be value-accretive in the first year of acquisition because Warid is likely to have 25-30 per cent margins and a 20 per cent market share, with an invested capital of $70-80 million.
In 2012 (calendar year), Bharti Airtel in Congo posted revenues of Rs 1,090 crore. PhillipCapital estimates Bharti’s average revenue per user (Arpu) in the market at $9. The acquisition of Warid Congo provides Bharti with a substantial market share and lead over the current largest player — MTN Group.
This agreement is the third such deal that Bharti is signing with the Warid Group. Earlier, Bharti had acquired Warid Bangladesh and Warid Uganda. With this deal, it would be acquiring Warid’s mobile business in Congo-Brazzaville, one of the more rich countries in Africa with four mobile players.
“This acquisition is in line with our stated strategy of strengthening our market position through in-country acquisitions, as and when suitable opportunities come along. We are at an advance stage of successfully integrating Warid’s Uganda operations with that of Airtel and look forward to a similarly swift transition in Congo Brazzaville as well. As already demonstrated in Uganda, the merger will bring more value for the customers in the form of affordable data and roaming tariffs, innovative products, Airtel Money, world-class networks and customer care,” said Manoj Kohli, managing director and chief executive officer (international) of Bharti Airtel.
