After pulling off the biggest initial public offering (IPO) on the Malawian stock exchange in February, Charles Kamoto, the managing director of Airtel in Malawi, tells fDi that he wants to take 4G connection to the whole country, particularly in rural areas, to close the country’s current penetration gap.
Q: How big is your company — has your customer base been growing?
A: Airtel in Malawi had around 4 million active customers on December 31 last year. In terms of our client base, we grew by 19.4% in 2019. Around 25% of our customers are actively using data and have smartphones — the other 75% are only making calls, using little data and probably have feature phones. For the financial year ending December 2019, Airtel Malawi had a total revenue of MK92.82bn ($124m) and made MK15.91bn in profits. It has 181 employees who are on-roll, a further 196 staff who are off-roll (these are staff who are outsourced), and 98 call centre staff in Lilongwe, the Malawian capital. We also have a further 27,000 retailers in the country who sell Airtel airtime.
Q: Why did you list Airtel on the Malawi Stock Exchange? How has the share price performed?
A: The company offered 2.2bn shares at MK12.69 ($0.017) each. Around 20% of the company’s equity was listed in the biggest IPO in Malawian history. We have been very excited by the share price performance [on September 10 the share price was trading at MK28.5]. We did not expect it to be doing so well at this stage. I think we have seen such a big leap in the share price because of growing confidence in the brand. We have run a campaign to extend our 4G coverage into many corners of the country. We have also been rolling out our fibre optic coverage. Our 4G network is now available to 76% of our client base as of December 2019. I think investors have been impressed by our efforts.
Q: What is your strategy for the Malawian market? How are you expanding?
A: One of our priorities is to take our coverage into the rural areas. The company now has 872 towers in the country; we added around 100 sites last year alone and plan to add an additional 139 sites this year. We are the leading telco in the country with over 55% market share in terms of revenues. Our strategy is to consider all the opportunities, first and foremost. The Malawian market is underpenetrated. The potential market is between 10 million and 12 million as addressable population. In 2018, the SIM card penetration rate was around 43%; we would like to take this up to around 80% by 2025.
An important part of our strategy is to drive data usage and to teach people about how using the internet can improve their lives. The Covid-19 emergency undoubtedly had an impact on our business volumes this year, but Malawi’s telecommunications industry has demonstrated its resilience. The pandemic also put the spotlight on the need for internet connectivity. I am optimistic that our business will grow the rest of this year and next year.
Q: There have been several articles in the Malawian press claiming that Airtel’s data charges are too high — what is your reaction?
A: I think those reports have been misleading. On a regional basis, our data prices are fairly reasonable. We charge around $2 per gigabyte. However, we would like to bring prices down in the longer term. Data infrastructure is very expensive but, if we have a big enough critical mass of users, we will be able to bring prices down.
This article first appeared in the October - November print edition of fDi Intelligence. View a digital edition of the magazine here.