Investor Update: Airtel Africa's Strong Growth in H1 2022

Airtel Africa grows half-year revenue by 12.9% to $2.57bn

Highlights

• Airtel Africa Plc, which is listed on the Nigerian Exchange (NGX) and covers the telco’s operations across the continent, grew its half-year revenue by 12.9% to $2.57 billion.
• That’s according to its financial report for the period ending 30th September 2022 released this week. It shows that without unavoidable macroeconomic challenges, growth for the period would have been around 20.4% in constant currency terms.
• For mobile services and mobile money services combined, total revenue grew in Nigeria by 19.7%, East Africa by 16.2%, and Francophone Africa by 13.0% over the period.

Source: ShareCast

Our Takeaway

Whilst being affected by the current macroeconomic challenges and currency devaluation risks in Nigeria, its primary market, Airtel Africa continued to deliver strong results with growth accelerating in the second quarter. Its double-digit revenue growth was largely driven by customer growth of 9.7% and ARPU growth of 7.2%, as the telco increased penetration and usage of its service offerings. The company’s outlook is bright, especially after getting Payment Service Bank and Super-Agent licenses under which it launched mobile money operations.

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Safaricom rolls out commercial 5G network across Kenya

Highlights

• Kenya’s largest telecoms operator Safaricom has rolled out 5G networks in five counties across the country, enabling customers to access faster internet speeds. The network was unveiled in Nairobi, Mombasa, Kisii, Kakamega, and Kisumu.
• Currently, Safaricom has 35 active 5G sites spread across those locations and it plans to expand to 200 areas across the country by March 2023.
• Plans are also underway to provide 5G data packages for mobile internet customers and leverage a device-financing solution to avail more affordable 5G smartphones.

Source: Reuters

Our Takeaway

With the rollout of commercial 5G in Kenya this week, Safaricom became the first firm to deploy the technology commercially in East Africa. However, its adoption faces hurdles due to the high cost of 5G-enabled handsets as well as data in the country. Per reports, only one in three people access even 4G handheld devices. And out of nearly 27 million smartphones in use in Kenya, only about 200,000 are 5G-compatible. The telco thus plans to initially focus on 5G Wi-Fi rather than mobile as there are still relatively few 5G-compatible devices in Kenya

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valU acquires minority stake in Egyptian fintech Kiwe

Highlights

• Egypt’s Kiwe, a social payment app targeting the unbanked segment, has secured funding from valU, a subsidiary of EFG Hermes Holding that provides a buy now pay later (BNPL) service.
• Founded in March 2021, Kiwe’s solutions allow users to collect, send, and spend money electronically, while also providing small businesses and startups with a digital payment platform.
• valU was founded in 2017 and counts EFG Hermes Finance, EFG EV Fintech, dfin Holding, and Marakez among its shareholders. The deal follows an initial investment Kiwe secured last year, with plans to raise a seed round in the coming months.

Source: Wamda

Our Takeaway

The demographics for the Middle East and North Africa region (MENA) offer a huge opportunity for fintech startups like Kiwe. More than 60% of the population are under the age of 30 while also being extremely tech-savvy. In Egypt, there’s a population of over 103 million people, growing at approximately 2% a year with around half of its adults unbanked. While there’s been a surge in digital payments over the past few years, estimates suggest only 4% of consumer spending is cashless.

Highlights

• Airtel Africa Plc, which is listed on the Nigerian Exchange (NGX) and covers the telco’s operations across the continent, grew its half-year revenue by 12.9% to $2.57 billion.
• That’s according to its financial report for the period ending 30th September 2022 released this week. It shows that without unavoidable macroeconomic challenges, growth for the period would have been around 20.4% in constant currency terms.
• For mobile services and mobile money services combined, total revenue grew in Nigeria by 19.7%, East Africa by 16.2%, and Francophone Africa by 13.0% over the period.

Source: ShareCast

Our Takeaway

Whilst being affected by the current macroeconomic challenges and currency devaluation risks in Nigeria, its primary market, Airtel Africa continued to deliver strong results with growth accelerating in the second quarter. Its double-digit revenue growth was largely driven by customer growth of 9.7% and ARPU growth of 7.2%, as the telco increased penetration and usage of its service offerings. The company’s outlook is bright, especially after getting Payment Service Bank and Super-Agent licenses under which it launched mobile money operations.

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Safaricom rolls out commercial 5G network across Kenya

Highlights

• Kenya’s largest telecoms operator Safaricom has rolled out 5G networks in five counties across the country, enabling customers to access faster internet speeds. The network was unveiled in Nairobi, Mombasa, Kisii, Kakamega, and Kisumu.
• Currently, Safaricom has 35 active 5G sites spread across those locations and it plans to expand to 200 areas across the country by March 2023.
• Plans are also underway to provide 5G data packages for mobile internet customers and leverage a device-financing solution to avail more affordable 5G smartphones.

Source: Reuters

Our Takeaway

With the rollout of commercial 5G in Kenya this week, Safaricom became the first firm to deploy the technology commercially in East Africa. However, its adoption faces hurdles due to the high cost of 5G-enabled handsets as well as data in the country. Per reports, only one in three people access even 4G handheld devices. And out of nearly 27 million smartphones in use in Kenya, only about 200,000 are 5G-compatible. The telco thus plans to initially focus on 5G Wi-Fi rather than mobile as there are still relatively few 5G-compatible devices in Kenya

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valU acquires minority stake in Egyptian fintech Kiwe

Highlights

• Egypt’s Kiwe, a social payment app targeting the unbanked segment, has secured funding from valU, a subsidiary of EFG Hermes Holding that provides a buy now pay later (BNPL) service.
• Founded in March 2021, Kiwe’s solutions allow users to collect, send, and spend money electronically, while also providing small businesses and startups with a digital payment platform.
• valU was founded in 2017 and counts EFG Hermes Finance, EFG EV Fintech, dfin Holding, and Marakez among its shareholders. The deal follows an initial investment Kiwe secured last year, with plans to raise a seed round in the coming months.

Source: Wamda

Our Takeaway

The demographics for the Middle East and North Africa region (MENA) offer a huge opportunity for fintech startups like Kiwe. More than 60% of the population are under the age of 30 while also being extremely tech-savvy. In Egypt, there’s a population of over 103 million people, growing at approximately 2% a year with around half of its adults unbanked. While there’s been a surge in digital payments over the past few years, estimates suggest only 4% of consumer spending is cashless.