Earnings call transcript: Airtel Africa Q2 2025 sees strong revenue growth

Airtel Africa reported robust financial performance in its Q2 2025 earnings call, showcasing significant revenue growth and an impressive increase in earnings per share (EPS). The company’s stock surged by 14.04% following the announcement, reflecting investor confidence in its strategic initiatives and market position. According to InvestingPro data, the stock has delivered an exceptional 101.19% return year-to-date, with an overall Financial Health Score of "GOOD." InvestingPro has identified 12 additional investment tips for Airtel Africa, including insights on dividend growth and valuation metrics. The telecom giant reported nearly $3 billion in half-year revenues, with a 24.5% growth in constant currency terms and a 25.8% increase in reported currency. The EPS climbed by 70% to $0.083, while free cash flow turned positive at $368 million.

Key Takeaways

• Airtel Africa’s revenue reached nearly $3 billion, marking a 25.8% increase in reported currency.
• EPS rose by 70% to $0.083, demonstrating strong profitability.
• The stock price increased by 14.04% post-earnings announcement.
• The company announced a higher CapEx guidance of $875-$900 million.
• Airtel Africa is considering a mobile money IPO in the first half of 2026.

Company Performance

Airtel Africa’s performance in Q2 2025 highlighted its strong growth trajectory in the African telecom market. The company expanded its customer base by 11% and saw a significant increase in data traffic, which grew by over 45%. Airtel Africa’s strategic initiatives, including partnerships with Starlink and network sharing agreements with Vodacom and MTN, have bolstered its market position. The company’s unique mobile money ecosystem and expanding broadband services further contribute to its competitive edge in the region.

Financial Highlights

• Revenue: Nearly $3 billion, up 25.8% in reported currency.
• Earnings per share: $0.083, a 70% increase.
• EBITDA: $1.45 billion, reflecting a 33.2% growth.
• EBITDA margin: 48.5%, a 268 basis points improvement.
• Free cash flow: $368 million, compared to a negative $79 million in the prior period.

Outlook & Guidance

Airtel Africa has revised its CapEx guidance upwards to $875-$900 million, focusing on network expansion and enhancing digital inclusion across its markets. The company is also planning a potential mobile money IPO in the first half of 2026, which could unlock further value for shareholders. Continued investments in data capacity and coverage are expected to support future growth.

Executive Commentary

CEO Sunil Taldar emphasized the company’s commitment to transforming lives across Africa by bridging the digital divide. He highlighted the growth potential in the region, noting the large, young population and low penetration of smartphones and home broadband. Taldar stated, "We are exposed to a region which offers a fantastic growth opportunity."

Risks and Challenges

• Market Saturation: As the telecom market in Africa matures, Airtel Africa may face challenges in sustaining its growth rate.
• Regulatory Environment: Changes in regulatory policies across different markets could impact operations and profitability.
• Economic Conditions: Macroeconomic pressures, such as currency fluctuations and inflation, could affect financial performance.
• Competitive Pressure: Intense competition from other telecom operators may affect market share and pricing strategies.

Airtel Africa’s Q2 2025 performance underscores its strategic focus on growth and innovation. With strong financial results and a positive market reaction, the company is well-positioned to capitalize on the opportunities in the African telecom sector.

Full transcript - Airtel Africa Plc (AAF) Q2 2026:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa half-year results for the year ended March 2026. All participants will be in listen-only mode. There will be an opportunity to ask questions later during this conference. If you should need assistance during the call, please signal an operator by pressing star, then zero. Please note that this call is being recorded. I would now like to turn the conference over to Chief Executive Officer Sunil Taldar. Please go ahead, sir.

Sunil Taldar, CEO, Airtel Africa: Thank you. Hello everyone, and a very good evening, good morning to you all, and thank you once again for joining us today. I have with me Kamal, our CFO, and Alastair, who is Head of our Investor Relations. Let me give you some brief highlights over the last six months before running through our strategic and operational achievements and how this has translated into a strong set of results we have reported today. After that, I will hand over to Kamal to run through the financials. We’ve seen our performance over the last six months supported by a much more stable macroeconomic and currency backdrop. This has been a very welcome development, and I believe it enables us to clearly showcase the scale of growth that is available to us across the region and the ability of our team to execute against the opportunity.

Not only is it positive for us and our business, but the more stable environment is really encouraging for our customer base, as well as given the significant volatility that they have faced in the last few years. While this more stable environment is supportive, it is also extremely important that we really double down on our strategic focus to ensure that we can capture the opportunity that is available to us. We’ve seen strong growth momentum in both our operational and financial performance, and this has helped lift our constant currency revenue growth to 24.5% for the first half of the year, with reported currency growth of almost 26% as currencies appreciated in many markets. This strong growth, combined with continued cost efficiency measures, have helped drive EBITDA margins to 48.5%.

Importantly, we’ve seen another sequential increase in EBITDA margin to 49% in quarter two, reflecting the sustained momentum we’ve seen across the business. Importantly, the overall performance we have reported today would not have been possible without a continued focus on CapEx investment, which is the foundation of our ability to sustain the revenue performance. The strong backdrop and strong operating performance give us increased confidence in the outlook, and it is this that has driven our decision to increase our CapEx guidance for this year, which Kamal will talk through later in the presentation. The strong performance has driven free cash flow generation, which has further enhanced the capital structure of the group, enabling the board to declare another 9.2% growth in the dividend.

Our purpose is to transform lives across Africa by bridging the digital divide and drive financial inclusion through the continued rollout of our mobile money services. This slide serves to highlight the key components of our performance over the last year, which is facilitating our purpose across Africa. Over the year, we’ve seen a continued increase in smartphone penetration and an accelerating growth in our mobile money customer base to approximately 50 million. We will unpack this a little later on in the presentation, but we have been consistently expanding the ecosystem by offering more services, which have contributed to over 35% growth in TPV, or transaction value, to over $193 billion annualized.

The constant currency revenue growth of 24.5% for the group again reflects that we are a business that continues to see one of the industry-leading levels of growth in the global telecoms industries, and we will continue to drive growth through the consistent deployment of our strategy. The revenue growth and cost efficiency measures have contributed to a further uptick in EBITDA margins, as I mentioned earlier, and we remain optimistic on our ability to realize further efficiencies. In addition, our capital structure remains attractive, which gives us the flexibility to continue investing across our network. With lease-adjusted leverage down to 0.8x and 95% of debt in local currency, we’re in a strong position to accelerate network investment while also enabling shareholder returns. This slide serves as a snapshot of our financial performance over the last six months.

Revenues of almost $3 billion for the last six months, growing at almost 25%, is certainly a very strong performance. The EBITDA growth of almost 32% is once again a strong performance with improving margins, which has significantly contributed to the 10 times increase in basic EPS. Importantly, FCF generation was very strong in this period as well. It’s worth reminding you that it is not only this period’s performance which has been strong. Even on a five-year CAGR, revenue and EBITDA have increased by 20.6% and 24.8%, respectively showing that this performance is not a one-off. It is a reflection of a sustained performance over the last five years. Let me now spend a few minutes explaining the significant opportunities across our markets and how our strategy will enable us to continue executing on this opportunity.

Many of you will recognize this slide, which summarizes the key components of our strategy. Our business strategy is designed to ensure we continue to address the huge opportunities in our 14 markets and deliver sustainable, profitable growth that creates value for all our stakeholders. The six pillars of our strategy focus on our investment and the expertise of our talented people on the core business activities that will unlock this significant opportunity. It is underpinned by a continuous drive to keep optimizing cost, meeting our sustainability objectives, and sustain investments in our talent. At the heart of the strategy are our customers. Our success is driven by enhancing their experience, and this is why everything is designed around the customer.

Now, let me briefly touch upon a few initiatives which showcase how our strategy is being embedded across the business and how it is driving practical benefits for our customers to increase customer loyalty and drive an improved offering. Let me address a few of them very briefly. The first is the Airtel AI Spam Alert, which was really designed to protect our customers and provide a solution to tackle our customers’ concern over the high level of spam messages and calls they receive. We are receiving very positive feedback from our customers as the technology really provides a differentiated customer experience and increased loyalty. Developing partnerships across our markets is key to strengthen our customer proposition and promoting digital inclusion by expanding access to reliable connectivity across our markets.

We have partnered with Starlink to enhance our offerings, and our network sharing agreements with Vodacom and MTN will also contribute to the accelerated rollout of services across our key markets. We’re also seeing very pleasing progress as we scale HPB and Enterprise with the continued growth in HPB customers and the recent launch of East Africa’s largest data center. This is just a brief snapshot of key strategic initiatives across the business. Let me now briefly reflect on the opportunity and the recent performance of our business. The scale of the opportunity across Africa remains substantial despite the strong operating performance we have reported of late. From a high level, we have a population of over 660 million people, but importantly, the demographics are very attractive with a median age of under 20 years, which compares to over 42 years of age in developed markets.

This shows the scale of the population that will be the customers of the future, supporting the outlook for our customer base. This, combined with relatively low levels of smartphone penetration, will continue to support data customer growth, but also data usage as new and existing customers increasingly use more data services, often for the first time. Home broadband is an area which we are very focused on, and the chart on the bottom left reflects why we are encouraged by the potential. We have very low home broadband penetration across our markets. It will inevitably increase as rollout of these services to a wider segment of the homes across the region.

For our mobile money segment, many of you will be aware of the low levels of financial inclusion across our markets, with only 35% to 40% of adults owning a bank account compared to over 90% in more developed markets. This is a key opportunity for us, and you will be able to see how we are executing against this opportunity. Before running through the individual segments, this chart aims to show that our growth of almost 25% in constant currency at the group level is not only down to one segment. It is broad-based growth across both businesses, with the mobile services segment growing by over 23% and mobile money by 30.2%. We continue to see this as a differentiating factor for us, with both business segments delivering on growth opportunities. Now, let me first focus on the mobile services segment.

We continue to see the onboarding of customers as a key priority. The focus remains on strengthening our go-to-market to ensure we remain accessible to our customers, a key strategic objective. It is not all about our distribution. It is also maintaining network investments to ensure increased capacity and coverage and embedding digital services across our footprint to simplify the customer journey. The results speak for themselves, with customer base growth accelerating to 11% in the period, and voice remains a key driver of our mobile service segment, with ARPU continuing to expand as usage on the network continues to expand, translating into a 13.2% constant currency growth for voice services. As many of you are aware, data remains a substantial opportunity for us, given the scale of the demand across our footprint.

With population coverage of over 81% and almost 99% of our sites being 4G enabled, we continue to prioritize investment into the network to facilitate this demand. Providing enhanced coverage and capacity is all fundamental to being able to provide a customer experience that will not only maintain loyalty but also attract new customers to our network. This is all supported by the initiatives we have spoken about around digital innovation and simplifying the customer journeys, driving accelerated data customer growth. We’ve also seen smartphone data customers continue to grow faster than the data customer growth as more customers migrate to smartphones, ultimately driving increased usage. During the period we saw data traffic increase over 45%, as usage per customer continues to rise to 8.2 GB per month.

The sustained data demand story has contributed to 37% growth in data revenues and has now become the biggest component of revenue for the group, which we see as another support for our top-line growth outlook. Now turning to our mobile money business, the chart on the left and the chart shared earlier confirms our views that our mobile money business operates in a vast, underpenetrated market. We operate in one of the world’s largest untapped financial services markets, supported by powerful demographic tailwinds, rapid urbanization, rising smartphone adoption, and surging demand for digital financial inclusions and solutions. While the outlook for mobile money looks attractive, it is important to highlight our structural competitive advantage with a captive customer base with only 29% of our telecoms customer base currently using the service.

This, combined with our extensive on-the-ground infrastructure, provides us with a unique opportunity for increased market reach and low-cost scalability, providing a substantial differentiation versus our competitors. What I mentioned in the previous slide is clearly playing out in terms of our operating and financial performance. The opportunity, the distribution reach, and the scalable customer-centric platform give us the ability to offer a range of different services, which is ably supported by deep-rooted partnerships, which can unlock new growth opportunities and drive the business to new levels. This, combined with continued innovation and the rollout of digital offerings, has seen an accelerating uptake in customers, and we are now approaching $200 billion of annualized transaction value, with ARPU’s up 11% in constant currency terms.

The result has been a strong 30% growth in revenues, which has once again been sustained over a number of years, indicative of the opportunity this business holds. The strong performance of the top line should also put into context the overall financial performance, with EBITDA margins of almost 52%, profit after tax for the period of $188 million, and strong operating free cash flows. Let me briefly touch on how our mobile money business has evolved and is likely to continue evolving in future years. The business mix has transformed as we have innovated products which have been rapidly adopted by our highly engaged user base. This is particularly evident within payments and transfers, which has grown to 42% of our revenues from 33% five years back. These revenues have been growing at a five-year CAGR of 36% and continue to see strong growth.

In addition, we are particularly excited about our financial services product segment, which captures our most recent innovation in the bank-to-wallet, lending, savings, wealth, and insurance sectors. Over the last five years, these products have been growing at a CAGR of 61%, with the last 12 months having seen the growth of 73% in constant currency. Overall, this mix shift reflects our maturing customer cohorts adopting a richer set of use cases and illustrates our trajectory towards a diversified, resilient ecosystem with high monetization per user. Let me now briefly call out the key conclusions from our recent performance in each of the regions, starting with Nigeria. We have continued to see strong operating momentum in Nigeria, with customers increasing around 10% and ARPUs growing almost 40% in constant currency.

We are very encouraged by the macro stability that has returned to Nigerian markets, which has enabled us to report these strong trends. While the tariff adjustments made by the regulator have certainly benefited our performance, we’ve seen sustained usage growth, particularly in data driving a strong revenue growth performance of almost 50% in the period. EBITDA margins have increased by over 7 percentage points as strong revenues, improved macro, and stable diesel prices and execution of our cost efficiency measures have taken hold. In East Africa, the trend remains strong, with constant currency revenue growth of around 20% despite the high base. What we’ve also witnessed in the region is some depreciating currencies, which resulted in reported currency growth of almost 23% for the region.

Once again, the strong subscriber base growth and increased usage of our services, which has driven rising ARPUs, have been the foundation of this strong growth, with EBITDA margins rising to over 53% in the period. The performance in the Francophone region has also been very encouraging. We’ve been seeing a clear turnaround in the performance in the region, driven by a consistent focus on driving base-level growth through the relentless focus on our strategy. This, combined with increased adoption of services, has contributed to an ARPU increase, resulting in strong revenue growth of 16.1% in constant currency. Currencies have also benefited from appreciation, resulting in reported currency revenue growth of 19.2%. This improved revenue performance is supported by a continued improvement in EBITDA margins over the year, with EBITDA margins up 122 basis points over the year to 44%.

Before handing over to Kamal, let me briefly touch upon the opportunity in Enterprise and home broadband and what we are doing to capture this. We are in a unique position to really drive the home broadband opportunity, utilizing our extensive 4G and 5G network. Home broadband services can capture a higher share of wallet by bundling premium connectivity with entertainment, smart home, and mobile offerings that deepen customer engagement and drive increased ARPU. We are already seeing a strong performance, and we look forward to reporting further successes. The growth of the Enterprise segments and the scale of the SME sector also provides a real opportunity for us to capture the evolving needs of the Enterprise and public sector. In particular, we announced recently the commencement of construction for a 44-megawatt data center in Kenya, which will run alongside the ongoing construction in Lagos of our Nigeria data center.

In conclusion, hopefully, this clearly summarizes our position across the market and reflects the performance we have achieved over the period. Importantly, we believe in our strategy, and the execution of this strategy is integral to capturing these opportunities. Let me now hand over to Kamal to run through the financials. Thank you, Sunil. A very good morning and good afternoon to all of you. Let me start with the key financial highlights. Overall, this was a very good quarter and the first half of the year for us, with a strong set of financial results, which was also helped by a stable to positive macroeconomic environment in most of our geographies. Revenues for the first half at almost $3 billion grew by 25.8% in reported currency and 24.5% growth in the constant currency.

The reported currency growth was higher compared to constant currency growth due to the appreciation of currencies in few markets. For the quarter ended September, the reported currency revenue growth was at 29.1% against constant currency revenue growth of 24.2%. The acceleration in revenue growth was also supported by tariff adjustment in Nigeria, which we did it in quarter four of the last year. EBITDA at $1.45 billion in reported currency grew by 33.2% in the half year. The EBITDA margin at 48.5% improved by 268 basis points in reported currency and 258 basis points in the constant currency. This expansion in margin is a result of our operating momentum, sustained benefit from our continued cost efficiency programs, and stable macroeconomic environment. Quarter two, EBITDA margin reached at 49%, up from 46.4% in the prior period.

The CapEx investment for the half year was at $318 million, which was similar to the prior period spent. Given the revenue growth momentum and stable macroeconomic environment during the period, we have revised our CapEx guidance efforts to $875 to $900 million for the current year, as compared to the previous guidance given of $725 to $750 million. Resultant operating free cash flow at $1.1 billion in reported currency is up by 46.5%, primarily driven by the growth in EBITDA. Lease-adjusted leverage at 0.8 times improved from one time, again due to higher EBITDA. Similarly, our leverage at 2.1 times improved from 2.3 times. Earning per share before the exceptional item at $0.083 in half year was up 70% as compared to prior period EPS of $0.049. Prior period also had an exceptional forex losses as a result of significant NIRA devaluation.

Hence, basic EPS for prior period was only $0.008 as compared to $0.083 in the current period. The EPS for the first half of this year is also helped by the derivative and foreign exchange gain on account of appreciating currencies, the positive impact of which is $0.014 on reported EPS. The board has declared an interim dividend of $0.0284 per share, up 9.2% versus last year, in line with our current dividend policies. Coming to the next slide, the overall revenue growth was at 24.5% in constant currency, while in reported currency, the growth was 25.8%. The reported currency revenue growth was also supported by the currency appreciations, mainly in the Central African Franc, Ugandan Shilling, and Zambian Kwanza.

In constant currency, our all service segment grew double digit, with voice revenue up by 13%, data up by 37%, and mobile money revenue up by plus 30% on a year-on-year basis. With this, the absolute data revenue is now higher than the voice revenue in our GSM business. The consolidated EBITDA at $1.45 billion is up by 33.2% in reported currency, while the constant currency EBITDA grew by 31.5%. The group EBITDA margin improved by 268 basis points in reported currency to reach 48.5% for the period. In constant currency, the margin improved by 258 basis points. As discussed earlier, the margin improvement was driven by flow-through from our accelerated revenue growth, continued benefit from our ongoing cost efficiency programs, and further supported by the stable to positive macroeconomic environment in most of our markets.

Coming to the next slide, this slide reflects the key component of finance cost movement from last year. In the prior period, we have derivative and foreign exchange losses of $260 million, of which losses on account of Naira devaluation was $231 million, which was categorized as exceptional. However, the current period was supported by a derivative and foreign exchange gain of $90 million, especially on account of appreciation in Nigerian Naira, Central African Franc, and Ugandan Tanzanian Shilling. Excluding the impact of derivative and foreign exchange fluctuations, finance costs increased by $126 million, largely driven by higher lease interest of $108 million, which was primarily related to the renewals of our TAR contracts. As communicated in the earlier periods, the increase in finance costs due to TAR contract renewal is an outcome of application of IFRS accounting standard.

However, the renewals have neutral to positive impact on the cash flows of the company. Higher interest on the market debt was on account of our de-dollarization program. As you all are aware, we have moved a significant portion of OPCO debt from low-interest foreign currency debt to high-interest local currency debt, which has shielded us from exchange rate volatility by reducing our foreign exchange exposure. Coming to the EPS, EPS before the exceptional item was up 70% to 8.3% in the current period, as compared to 4.9% in the prior period. Excluding the impact of derivative and foreign exchange fluctuations, EPS before the exceptional item improved from 5.4% in the prior period to 6.9% in the current period.

This increase was driven by higher operating profits during the current period, which partly got offset by the higher finance charges, which was primarily due to higher lease interest on account of the renewal of the TAR contract, which has been discussed in the last slide. Coming to the normalized free cash flow, the business generated a free cash flow of $368 million in the current period, as compared to a loss of $79 million in the prior period. This slide gives us a bridge between EBITDA and normalized free cash flow for the current period.

The difference between the two are the cash payment from the EBITDA in the current period, which primarily includes the CapEx payment of $356 million, income tax payment of $203 million, which also includes the dividend tax, the cash interest of $388 million, and the other cash payments, such as lease repayments and the dividend distribution to the minorities. We continued to focus on strengthening our balance sheet by reducing our foreign currency debt exposure across OPCOs. OPCOs’ foreign currency debt is now at 5% as compared to 11% last year, while Goldco continued to be debt-free. Our group leverage at 2.1 times has improved from 2.3 times compared to last year as a result of increasing EBITDA. The lease-adjusted leverage has also improved from one time to 0.8 times.

A strong operational and financial performance has translated to a substantial return that we have given to our shareholders in the last few years. We have returned $1.3 billion in the last five and a half years by way of dividends and the buyback of the shares. On our capital allocation, our allocation policy remains the same and consistent as it was in the last period. Our key priority remains to continuously invest in our business, strengthen our balance sheet, and return cash to the shareholders. Our CapEx remained stable compared to the previous year, with a notable increase in spending during the second quarter. With the stability in the macroeconomic environment and sustained industry growth, we believe this is a time for us to accelerate some of our CapEx investment to support and accelerate our business growth.

Consequently, we have revised our CapEx guidance from the previous range of $725 to $750 million to $875 to $900 million. This additional CapEx will primarily be allocated towards network investment in expansion of 4G/5G data capacities and the coverage expansions. The second pillar of our capital allocation policy is to ensure a sustainable capital structure, with leverage having fallen by 0.2 times and a low level of dollar debt on our balance sheet. I’m very pleased with the current state of our capital structure. Finally, the third pillar is all about returning cash to shareholders through our progressive dividend policy. This policy has been very consistent and is again reflected in the board decision to pay an interim dividend of $0.0284, a growth of 9.2%, which is almost consistent over the last few years now.

With this, let me now hand over the call to Sunil for his concluding remarks.

Kamal Dua, CFO, Airtel Africa: Thanks, Kamal. Finally, on slide 30, just a few words on summary and outlook. As you’ve seen from our results, our strategic focus has consistently driven positive momentum across the businesses and reflects a strong track record in execution. Key to delivering value to our stakeholders is to drive continued growth across our base. Our focus will remain on investing in our network and on further expanding our distribution to be closer to our customers, while at the same time looking at new opportunities for growth. Mobile money remains a fantastic business, and we look forward to the upcoming IPO in the first half of calendar 2026. The recent macro backdrop has been supportive for our business of late, which has been very welcome. This does not change our relentless focus on executing our strategy to maximize our value creation for all our stakeholders.

We are exposed to a region which offers a fantastic growth opportunity. We have shown a very strong track record of execution, and we have a capital structure that will allow us to continue executing on our strategy. This puts us in a very strong position to drive significant value for our shareholders, and we look forward to reporting on these successes in the future. I would like to thank you all for your attention today, and we would now like to open the floor for questions.

Conference Moderator: Thank you, sir. Ladies and gentlemen, for those on the conference, if you would like to ask a question, please press star and then one now. If you decide to withdraw your question, please press star and then two. Again, if you would like to ask a question, please press star and then one now. The first question we have comes from Ganesh Rao of Barclays Bank PLC. Please go ahead.

Hi. Thank you for the presentation. A couple of questions from my side. The first one on the CapEx guidance. Could you provide some color on the factors that are driving the increase in the CapEx for the year? How much of this is one-off project versus the structural hike? Do you believe this represents the peak in spending, or how should we think about CapEx trajectory heading into, let’s say, FY 2026-2027? My second question is on the Nigeria market. While the data consumption remains strong in the region, the voice usage has seen double-digit decline during the quarter. How do you see the trends evolving in the market, and when do you expect overall growth to return to a normalized level for the voice usage? Thank you.

Sunil Taldar, CEO, Airtel Africa: All right. Thank you for the question. Let me just respond to the first on the CapEx guidance first. See, if you look at it, there’s been a significant improvement in the overall macroeconomic environment across most of our markets, and this is supported by a reduction in inflation, and currencies are stable. The opportunity in Africa across our footprint remains very, very compelling, and additional spend will only allow us to create a platform to capture further growth. With the stability in the macroeconomic environment and sustained industry growth outlook, we believe this is the right time for us to accelerate some of our CapEx investments to support and accelerate our business growth. What this does is this increase in CapEx, it actually demonstrates our confidence in the market and the opportunity that exists in the market.

As we execute our plans, we are very hopeful and confident that our customers will continue to support us and reward us. The additional CapEx that we are deploying is predominantly going into three areas. The first is, you’ve seen the numbers. There is a significant increase in our data consumption, overall data usage. The first is an increase in data capacity across regions, which will further future-proof our growth initiatives and unlock additional revenues or avenues for growth. This includes a particular focus on 5G services to enhance our network quality and speed across key areas in our larger market. That’s the first area where the additional CapEx investments are going. The other is there remains an opportunity in Africa on expanding our coverage, as we are seeing in our response to our investments.

What we are trying to do now is to accelerate our network coverage and drive digital and financial inclusion across our markets. This is the reason why we are significantly scaling up our capital investments in the second half. As I said, what it does is it actually reflects an increased confidence that we have in the market, given the recent stable macro environment and the sustained demand that we’ve seen, which has also been reflected in our results. The acceleration in spend will enable us to further capture the share of the market. That’s the reason why we are accelerating spend on CapEx. Coming to your second question on Nigeria, see, if you look at Nigeria, the overall performance remains very strong. We’ve seen a significant improvement in our overall revenue growth, as you pointed out.

The voice revenue growth from our last quarter of 36% has come down to circa 33%, 33% this quarter. There are predominantly two reasons that we ascribe to this. First is there is some amount of seasonality that we see in the business, which is what has kicked in. The second thing that has happened is voice is very closely associated with the base growth. We’ve seen that in Nigeria, because of changes in NIMSI platform, the entire industry acquisition got impacted in the back half of June and some part of July, which is something that is also getting reflected in our overall voice volume or revenue that you’re alluding to. Lastly, they’ve also done tight trading on certain premiums that we had in the business, which is getting reflected. Overall, the health of the business, underlying metrics, they remain strong.

That’s how I would say is what’s happening in the Nigeria business from a voice revenue point of view. Can you have the next question, please?

Conference Moderator: Thank you. The next question we have comes from Madhvendra Singh of HSBC Global Investment Research. Please go ahead.

Sunil Taldar, CEO, Airtel Africa: Yes, hi. Thanks a lot for taking my question and congrats for a great set of results. Just a couple of questions from my side. The first is a follow-up on the CapEx part. If you were to give some indication on the split of the incremental CapEx, is more of the new CapEx going into backhaul or radios? What about the data center part? It seems like your data center ambitions are also going to cost decent money. How much of the CapEx increment or the overall CapEx for this year is going into data centers? If you could talk about that. Secondly, on your home broadband strategy, that is very interesting to see that you are talking about that in such, I would say, increased fashion. I wonder, you know, why do you think 4G is the right way to do that?

Wouldn’t 5G be a better fixed broadband, you know, home broadband, fixed wireless home broadband strategy? From that perspective, 5G would be better. Is that also part of the CapEx plan that you want to do more of that using this incremental CapEx? If you could talk about that. On the same topic, if you could also give some indication on which countries is the CapEx actually going into? Is it Nigeria? The second quarter in Nigeria was apparently quite low on CapEx. I wonder which countries the CapEx is also going. Thank you.

Kamal Dua, CFO, Airtel Africa: Thank you very much for your questions and your comments. Let me just quickly try and address the three questions that you asked. On the CapEx, as I said, most of our CapEx are going into network, and this is predominantly in driving data capacity and coverage. We don’t provide split between data capacity, transmission, or the sites which are going into coverage. Net-net, this entire investment is going into making sure that we are delivering the best experience to our customers in the market as we see a significant increase in our usage of our consumption of our services across both voice and data. The second thing is, with the improvement in the macroeconomic environment, we also felt that there is a need for us to accelerate our coverage expansion, and this is something that we are doing. That’s where the investment predominantly is going.

When we look at addressing the need for creating capacity for higher data consumption, it would actually mean addressing both radio as well as backhaul or transmission. To answer your question very simply, it is radio, transmission, both, and also capacity and coverage. That’s how we are looking at our overall CapEx investments going. On your question on data center, this increase doesn’t capture any investment on the new data centers that we’ve announced, whether the investments that we announced for our data center in Nigeria or in Kenya that we recently announced, most of those investments will come in in the future. These are all long-distance projects. Moving on to the question that you asked on home broadband, home broadband we see as a very, very attractive opportunity for Africa because the current penetration in home broadband in this category is very, very low.

That is the reason we said that this category needs a lot of attention and for us to make the right investments, at the same time build up capabilities within the business to be able to go and capture this opportunity. The approach that we are taking is to first leverage our 5G investments in Spectrum through the FWA rollout because that’s where we are able to, you know, with respect to speed to market and also the current consumption in the market for the customers is relatively low. We believe that we will be able to meet the customer’s expectations, meet their consumption requirements, and offer very good experience through the FWA. It serves both the purposes for us to be able to leverage our 5G spectrum investments or the radio investments, at the same time also deliver the right experience to our customers.

Having said that, we are also at the same time looking at selectively wherever we need to deploy fiber home passes in select geographies within our markets. That’s the work which is separately happening. This is an evolving space. We’ve started this work with building a lot of capabilities, as I said, both in terms of our ability to serve our customers, our go-to-market, and our ability to manage and deliver experience to our customers. We’ll continue to give you more updates on this front as we progress. The third question was with respect to which countries that we are looking at from a home broadband point of view. This home broadband we’re looking at across our footprint, in most cases, the opportunity actually is in the urban markets. On the CapEx, the question that you asked, which countries, we don’t provide country-level breakup.

The breakup at a market segment is available in the results that we have declared. In Nigeria, overall, if you look at in the first half, our CapEx was very similar to what we had last year at an overall level. Quarter four of last year saw significant CapEx deployment in two of our market segments. Therefore, this is a high CWIP that saw some impact in the first half of this year. We are seeing investments going across markets wherever we feel there is a need because we have a very strong framework for determining our entire capital allocation and CapEx investments. We are guided by that, and that’s something that we’ll decide. This is something that is guiding our decisions.

As I said, Nigeria, East Africa saw a significant quarter three, quarter four investments, and you will see the rest happen across markets in the balanced part of the year. Got it. Thank you very much.

Conference Moderator: Thank you.

Kamal Dua, CFO, Airtel Africa: Thank you.

Conference Moderator: The next question we have comes from Rohit Modi of Citigroup Inc. Please go ahead.

Hi. Thank you for taking my question. Some of them have been answered. We have two follow-ups and one question on margin. A follow-up again for in CapEx, but can you confirm like this is now the base CapEx level for future years? Given you said this doesn’t include the data center CapEx that you allocated for Nigeria and that has been postponed a couple of times, that doesn’t include. The CapEx could, ideally, increase from these levels if you go ahead and build those data centers as well. That’s my first question. Second, again, a follow-up on the Nigeria voice decline. If you can just confirm like this is a new normal where you see voice continuing to remain low and data taking over.

Voice can continue to moderate in Nigeria, or you see there’s still growth in voice, given you have seen all the elasticity that we saw in the ranges prior years. All the elasticity has now gone in, and we will see more growth from here. Any color there? Thirdly, on the margins, the commentary around improvement in margins, is this any color which country, which region where you’re seeing more margin improvement? This particularly comes from Nigeria because we have 56.5% margins in Nigeria right now, which is kind of the highest we have seen so far. Do you see more improvement in Nigeria margins, and what could be driving that? Is it just the operational leverage or more investments you are making that could be a different margin? Tell us.

Sunil Taldar, CEO, Airtel Africa: Yeah. Let me just try and address the question that you asked. You’re not very clear on your second question that you asked on voice, Nigeria voice. If you can just repeat that, that will help.

Sure thing. On Nigeria voice, the question is basically given you mentioned last quarter that it’s a bit of elasticity impact, that you see initially more elasticity on voice and that you see growth, that’s something you mentioned last quarter, but you’re seeing more decline. I’m just trying to understand, is this the bottom in terms of voice usage and you see growth from here, or is this a new normal where you see voice is declining and data is growing and there’s a bit of normalization happening in Nigeria?

Okay, let me just try and address the three questions that you asked. The first is on the CapEx for future. We don’t give future guidance for CapEx. Right now, what we’ve done is given the, as I said, a very strong macroeconomic development and certain need that we felt and the response that we’re getting to our investments is where we’ve increased our CapEx for this year. We will talk about the CapEx for next year at the end of this financial year. Data center, as I called out, is not part of, say, for example, this increase in CapEx that we have. That data center investment is we will see over the course of the next two to three years because it’s, as I said, it’s a long gestation. The Kenya data center we’ve just announced, and it’ll flow over a period of time.

We’ll provide details for FY 2027 when we meet at the end of this year. On the voice revenue, the question that you asked, as I said, there are two reasons, which is predominantly, as we said. The first is with respect to there was a base growth sequentially that we’ve seen. There was an impact because there was a NIMSI correction. We expect the voice revenue to recover. At the same time, there is a little bit of seasonality that we’ve seen. To separate what has been the real impact of these two and is there any drop in voice revenue that we see, very difficult to say at this point in time. As we start to pick up on our customer acquisition and our base growth accelerates, we should see uptake on the revenue.

Having said that, because we’ve also done some tight trading of the minutes, which is where we are seeing some amount of consumption change as well. Voice revenue, we remain confident that overall revenue growth for Nigeria looks very, very solid right now. There are two reasons, as I said, for the impact on voice revenue. Will it continue to hold? We should see because it’s very difficult for us to split as to how much of this is being caused by removal of the minutes and how much is the base growth. Coming on to your question on EBITDA margins that have reached almost 56.5%, on Nigeria specifically, which is where you were pointing to, the margin expansion is an outcome of, first and foremost, a very stable macroeconomic environment because in Nigeria, in the past, we were seeing significant challenges because of inflation. The second was fuel prices.

The fuel prices are stable in Nigeria. The second is inflation is coming down. The third is we remain very, very focused on our cost efficiency programs, which has also significantly helped us to improve margins in Nigeria. With macroeconomic environments remaining stable, we remain focused to make sure that we continue to push for opportunities of cost-saving and cost-saving initiatives in further opportunities for saving costs in Nigeria and across all our markets.

Kamal Dua, CFO, Airtel Africa: Yeah. Just to build on Sunil Taldar’s point, this is Kamal Dua. We have recovered our margin from last year of 45% to 49% now. With the stable macroeconomic conditions, and this continued cost efficiency program and flow-through operating momentum, we are pretty hopeful that we will keep on working on the expansion of the margin. Subject to the stability in the macroeconomic environment, we will see the improvement in the margin, but the rate of increase in the margin may not be in line with what we have seen in the last few quarters.

Sunil Taldar, CEO, Airtel Africa: Very clear. Thank you.

Conference Moderator: Thank you. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have comes from Cesar Adrian Tiron of BofA Securities. Please go ahead.

Yes. Hi. Good afternoon. Thanks for the call and the opportunity to ask questions. I have two, if that’s okay. They’re both on Nigeria. The first one, I’d like to understand a little bit better why your service revenue growth rate is below that which was reported by the market leader in the past quarter. We’re not sure for this quarter, right, because we have not reported yet. What do you attribute this to when you look at the data? Is it a difference of pricing and how you increased prices a couple of months ago, or do you think that actually relates to network availability, which actually explains why you had to increase the CapEx so much? That’s the first question. Second question, I wanted to ask about the potential for price increases in Nigeria in 2026. Do you have any opinion on it? Thank you so much.

Sunil Taldar, CEO, Airtel Africa: All right. If you look at our overall growth in Nigeria, which is approximately 50%, we are very happy with the growth, which has benefited following the adjustments of our tariffs, which is in line with the approvals that we received from the regulator. While I will not comment on the performance of the competition, the way we look at this, we had 75% of our total portfolio, which is where we applied our pricing. Was it similar or different from the competitors? We will not be able to comment on that. The way we look at Nigeria still continues to offer significant opportunities for us for growth. We’ve seen strong execution of a strategy in Nigeria. We’ve also seen the overall pricing has settled down well with significant growth across all the revenue segments that we have.

That’s where we are, and we continue to stay focused on, and we are making significant investments in making sure that we have enough capacities in our network and our go-to-market to be able to accelerate our growth in Nigeria. That’s on your first question. The second thing that you asked about, about our pricing for the future, which is for next year, there is no minimum period before which we can increase pricing in Nigeria. We will assess when is the right time. Once we are right now seeing that the overall price adjustment of circa 50% has been kind of well accepted, the markets have settled, we will decide at the right time to approach the regulator and go for another price increase.

Whether the extent of that is something that we would like to assess, but there is no minimum time or period before which we can take another price increase. Those options are absolutely available to the operators.

Thank you. I just wanted to follow up. I just wanted to understand if the price increase that was implemented this year, was it part of a multi-year framework where we agreed with the regulator to pass on back to the customer some of the inflationary impact on the business, or was it just a one-off? Did you agree on a framework, or did you agree just on a one-off in 2025?

This was because given the inflationary conditions that prevailed during the time when we reached the regulator for a price increase, that is a time when there were two or three pressures in the Nigerian economy at that point in time. There was a significant devaluation of currency, very high inflation, high fuel prices. To offset all of that, this was the price adjustment that the authorities had agreed to give to the industry. I don’t think this serves as the precedent, and neither was there a time period, as I said. We have the option to go back to the regulator and ask for another price increase at the right time. This is something that we will surely assess. Thank you.

Conference Moderator: Thank you. The next question we have comes from David Lopez of New Street Research. Please go ahead.

Hi. Thank you for taking my questions. I have two. The first one is on mobile money in Nigeria. If you could give us an update, how long do you think you need, how much time to fully build the base, and when should we see a step up in revenue there? The second question is just on Spectrum auctions. If you could tell us what are the upcoming Spectrum auctions across the group, please. Thank you.

Sunil Taldar, CEO, Airtel Africa: All right. Let me first address the Nigeria money opportunity. If you look at Nigeria, it offers a very large opportunity for the mobile money business. At the same time, it is also a relatively, as compared to what we see on the other parts of our footprint, it’s evolved in a relatively more mature market with significantly large fintech operators as well as banks well entrenched in the ecosystem. Having said that, we have a very clear opportunity because we currently enjoy an existing relationship with our customers. With high smartphone adoption, this market offers significant opportunities for growth for us.

Where we are focused right now is, and I think almost I’ve said this even in the past quarters, that this market is going to take some time as long as we are doing the right things and building the right capabilities to be able to win with our customers. Certainly, what we are doing right now, and whereas we are seeing early green shoots of some of the work that we’re doing, in terms of our key focus areas, we first just acquiring quality customers. In terms of our base growth, we now have about 2 million active customers in Nigeria. Most of these customers, a very large portion of these customers, is engaged in our mobile money app, which allows us to engage with them very, very actively.

The second thing that we’re doing is we’re building capabilities to be able to meet all the asks and demands of our customers and match up to the functionalities that they get from other fintech, whether it is a virtual card or a saving bank account. These are capabilities that we’re rolling out in Nigeria. The way I see it, it’s a big opportunity. Our teams are doing a fantastic job in building capabilities and acquiring customers. The only thing that I will say is this is relatively a difficult market because it’s a well entrenched market. It’s going to take us some time, but this is one area where we have a massive focus, and we’re not leaving any stone unturned, neither are we saying no to any investments to accelerate our business in Nigeria.

As I said, we’re already seeing some early green shoots, which make us hopeful that we’ll be able to turn around this business in Nigeria. Coming to, I’m going to talk about the Spectrum auction question.

Kamal Dua, CFO, Airtel Africa: Yeah. In 2027, I think Nigeria, 10 megahertz of 900 is coming for renewals, and in Kenya, our license for 2G, 3G is coming for renewal. These are the two large renewals, which is our view in 2027. Thank you.

Sunil Taldar, CEO, Airtel Africa: Thank you.

Conference Moderator: Thank you. Ladies and gentlemen, just a final reminder, if you would like to ask a question, please press star and then one now. I would now like to hand over to Alastair for any webcast questions. Please go ahead, sir.

Yeah. Thank you. Just a couple of buckets of questions coming in to the website. I was hoping that Sunil and Kamal can address. Firstly, just in terms of the mobile money, the intra-group agreements, there were some amendments made, and just some clarity on what those renewed agreements would impact, how they impact revenues, and sort of what is their retention revenue, what you sort of define as retention revenue. That’s on one point. The second point, just coming back to cost efficiencies, can you elaborate on any specific cost efficiency initiatives that you are looking at at the moment to just give some sort of color as to what efficiencies we’re looking at? Secondly, just associated with that, has there been any margin benefit from a drop in fuel prices or diesel prices in our numbers for this quarter? Thank you.

Sunil Taldar, CEO, Airtel Africa: Sure. Let me address your first question, which is on the IGN changes. If you look at our GSM business and mobile money business, they are interdependent businesses. In the ordinary course of business, there are various services exchanged between them, such as Airtel Money providing services to the GSM business, like recharge collections and bulk disbursements. Similarly, GSM provides services to Airtel Money, like SMS, USSD, and go-to-market, etc. All these agreements that we have, all these services are governed by long-term agreements that we have. These agreements are well established, and they are also fully compliant with the regulation for both the businesses.

As these long-term agreements came up for renewal and in line with the market benchmarks, we’ve revisited these agreements and renegotiated the terms of inter-group agreements in line with the changing market dynamics between the mobile services and the mobile money businesses during the second quarter, while ensuring that they continue to be on arm’s length. These agreements are also discussed, aligned, and agreed with the minority shareholders. That’s where we are. I must also add here, the full impact of these agreements or of these changes will come in phases over the next 8 to 10 quarters based on the current volumes. The current year impact will be circa about, in terms of % EBITDA, because Airtel Money is also a very high-growth business. In % terms, the impact will not be maybe more than 1% or 2% of EBITDA as we go forward.

It’ll be in low single digits, is the way I would put it, overall impact of the IGN changes on the Airtel Money EBITDA. Coming to your second question on cost efficiencies, there are three or four areas that we look at from a cost efficiency point of view. The first is if you look at where our big cost components are. Our big cost is actually in network. The way we are looking at it is, first, within network, a big cost component is our tower running expenses, which is energy. What we’re doing is we’re working with tower companies to invest in more energy-efficient solutions, whether it is batteries or solar, invest in lithium-ion batteries or solar equipment. This is one area that we’re working on.

The second area that we’re working on is as we look at our new sites which are coming in, either in rural or these are infill sites in urban areas. Instead of having full macro sites, do we have lean sites, which are relatively lower in terms of cost? Running cost is lower. The third area is moving sites from off-grid to grid. These are two or three areas where they’re working very closely to be able to generate certain efficiencies. As we said, the stable oil prices is one of the reasons for us not to see a margin kind of deterioration. We’ve seen some benefit because our oil prices have by and large been stable. We’ve not seen oil prices go down. We’ve seen oil prices remaining stable.

They’re not adding to increase in cost, but at the same time, they’re not seeing a significant cost reduction because of oil prices going up. Thank

Conference Operator: you. Let’s go back to the Q&A.

Sunil Taldar, CEO, Airtel Africa: Thank you, sir. The next question we have comes from John Karidis of Deutsche Bank AG. Please go ahead.

Conference Operator: Thank you. Thank you very much. Is it possible, please, to explain the reasons for the nearly sort of 2.00%, 200 basis points, reduction in mobile money EBITDA margin in the second quarter? I’m trying to figure out whether it’s exceptional or not. Secondly, regarding the CapEx, I’m sorry to come back to that. I know you don’t give guidance for next year. I’m just sort of trying to figure out whether we should all go back to our spreadsheets and assume $150 million more CapEx per year going forward. From what you say in terms of coverage, once you get the coverage, you don’t need to keep expanding. For data capacity, you might need to keep adding capacity.

If I were to look at your CapEx envelope over more than one year, are you bringing forward capital expenditure, or are you sort of increasing capital expenditure consistently over that period of time? Just so that we know what to put in our estimates, please.

Kamal Dua, CFO, Airtel Africa: Okay. Thank you for the question. I’ll take your first question first on the mobile money EBITDA margins. As Sunil had just spoken about our renegotiation of the intra-group agreement, the impact of those renegotiations is roughly $11 million on EBITDA of Airtel Money, which has an impact of roughly 2.3% to 2.4% on Airtel Money. If we normalize for that, intrinsically, the EBITDA margin of Airtel Money is flat to slightly positive. There is no one-off exception which has been sitting in the EBITDA margin of Airtel Money. I’ll hand it over to Sunil to take the second part of the question, please.

Conference Operator: Yeah. Your second question was, you know, the future guidance of CapEx, right? Now, see, essentially, I’ll be repeating myself.

Kamal Dua, CFO, Airtel Africa: I’m sorry. I’m just trying to figure out whether this is a sort of permanent increase in yearly CapEx or not. Because if I read what you’re saying, if you’re going just for coverage, you only spend it once. For data capacity, you spend it yearly. Just sort of a steer would be good. By the way, I’m sorry. I asked the same question about the margins. The line is not good. I’m sorry about that.

Conference Operator: Oh, see, okay. Let Kamal repeat the response on the margin. Kamal, the line wasn’t clear.

Kamal Dua, CFO, Airtel Africa: No worries. Hi. The margin drop is on account of the new inter-group agreements, which came into effect effective July 1, 2023. The impact of that is the margin for mobile money is coming down. The impact on the mobile money absolute EBITDA is roughly around $11 million. On year-on-year margin, it’s roughly around 1.5%, 1.3%, 1.4% for the first half and 2.3%, 2.4% for the quarter if you compare the same quarter of the prior period. If you adjust for the impact of the renegotiation of the intra-group agreement between the groups, intrinsically, the margin for mobile money is flat to slightly positive. That was an answer on the intra-group agreement. If you don’t have any further question on mobile money margin, I’ll hand it over to Sunil to answer the CapEx part of the question, please.

Conference Operator: Okay. So I’m assuming that, you know, your mobile money margin question is answered. I’ll respond to your question on CapEx investments. See, I’ll be kind of repeating myself, but it is very, you know, we don’t give future guidance on CapEx investment. Having said that, when we, you know, CapEx has, when we did this exercise, with the recent increases in data consumption and also need for us to accelerate given the response that we are getting from the market, it’s a very detailed exercise that happens to determine, you know, what’s the real CapEx requirement for, you know, for the businesses. Now, our next year planning cycle actually has just about started, and we will conclude this by December, and that’s when we go to the board. There are many moving pieces.

With this investment that will go in, how much of the population that we are wanting to cover that gets covered? You know, how much capacity have we added? There is also some amount of changes, you know, which is what I was alluding to the other question on margin, which is I spoke about, which is a mix of lean sites versus macro sites. There are a few, and plus, there are a few moving parts that we have, and therefore, it is very difficult for us to give any guidance to say whether this is the new normal, or that or we will go, or this is a one-off. For this year, definitely, you know, what it actually talks about is our confidence in the overall macroeconomic environment remaining what it is.

We feel that this is the right time for us to make investments, create capacities, deliver great experience, accelerate our growth, and take higher share of the growth opportunity that Africa offers across our footprint, which is something that we’ve done. We’ll have a little more clarity once we’ve done, you know, our own workings to say whether this is going to be, you know, which is probably that you’re trying to understand, same as next year or probably a new normal. We are not in a position to, you know, to help you, you know, to plug this in your worksheets, so to speak, which is something that you’re trying to solve here.

Conference Moderator: Just to clarify quickly, just on the commentary around the inter-group agreement amendments, just what Sunil was saying, the impact over the sort of medium term as a result of those agreements, given volume flows, etc., is going to be low single-digit impact on EBITDA margins, just to clarify that. Thank you.

Conference Operator: Yes, the impact of these inter-group agreements on mobile money margins will be in low single-digit.

Sunil Taldar, CEO, Airtel Africa: Thank you, sir. Ladies and gentlemen, unfortunately, we have reached the end of our allotted time for today’s question and answer session. Sir, would you like to make any closing comments?

Conference Operator: Yes. I want to thank everyone for joining the call today and for, you know, for all your questions. We look forward to our continued engagement with you all. Thank you. Thank you very much.

Sunil Taldar, CEO, Airtel Africa: Thank you.

Kamal Dua, CFO, Airtel Africa: Thank you.

Sunil Taldar, CEO, Airtel Africa: Thank you. Ladies and gentlemen, that then concludes today’s conference. Thank you for joining us. You may now disconnect your lines.

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