Daily Mail Midas30 Aug 2020 07:48
It seems hard to believe, but 23 years ago, just one in six UK households had a mobile phone. Today, 95 per cent have one.
In Africa, less than half the population has a mobile and most of those are old-fashioned, slow and simple, rather than the all-singing, all-dancing smartphones that consumers in the developed world have become addicted to.
For Airtel Africa, this offers a massive opportunity. The company is a leading provider of phone, data and mobile money services on the continent, operating in 14 countries, including Nigeria, Kenya, Uganda and the Seychelles.
Sales and profits are growing fast, the dividend policy is generous and the outlook is promising. Yet Airtel shares have had a rough ride since listing in London in June 2019.
Initially priced at 80p a share, the stock has roller-coastered over the past year. It fell in the months after listing, rose to the issue price over the winter, slumped to below 29p in March, as Covid-19 fears erupted, and closed at 57p last week.
The current price seems unfair, reflecting concerns about the economic impact of the coronavirus rather than Airtel's present growth rates and future potential.
The company has 112 million customers and offers three services â straightforward voice calls, mobile data and mobile money.
Voice calls generate most of the group's turnover and customer numbers are increasing by 12 per cent a year, but usage varies so sales growth from this division is about 5 per cent annually.
The data and mobile money divisions are expanding much faster. Mobile data accounts for almost a third of Airtel's turnover, growing at more than 35 per cent annually.
Data usage tends to expand exponentially as network connections improve and Airtel is one of the top operators of 4G services in Africa. With 4G, customers can stream music and videos, check apps and shop online with ease, as well as performing more basic functions such as sending and receiving emails or photos.
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