Airtel Africa Plc

Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa 9-month 2025 results update. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the 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 Sunil Talda. Please go ahead, sir.

Thank you. Good evening, good morning to everyone, and welcome. Thank you for joining us on today's call. I'm joined on the line by our CFO, Jaideep Paul, and Kamal Dua, our Deputy CFO, who, as you will have seen from our previous announcements, will be taking over from Jaideep as CFO later this year. Alistair Jones, our Head of Investor Relations, also joins us on the call. We will shortly be answering your questions, but first I would like to provide you with a brief overview of our performance over the last nine months, and in particular over the last quarter. Over the last few years, there has been continued volatility in the macro environment, but more recently, we've seen some signs of stabilization, which is encouraging. However, throughout the volatility, demand for our services has been sustained, which really reflects the strong underlying demand across our markets. The ability to provide these critical services, despite the tough macroeconomic environment, is testament to our focused strategy and resilient business model. The strategy we have adopted has continued to serve increased digital and financial inclusion. Smartphone penetration has increased over 5 percentage points over the year, and the 18% growth in our mobile money customer base to over 44 million reflects our focused on providing a wide range of financial services to individuals and businesses that have been previously excluded from the financial ecosystem. These initiatives have translated into strong constant currency results with an acceleration in revenue growth over the last few quarters. Revenues in the quarter reached $1.27 billion, which was a 21.3% growth in constant currency results accelerating from 20.8% growth in Q2 and 19% in Q1. Given the foreign exchange headwinds experienced over the last year, reported currency revenues grew 2.5% in Q3. Before discussing our performance across our two main reporting segments, I wanted to highlight our performance on a regional basis in the last quarter, including both mobile services and mobile money. In Nigeria, we continue to see encouraging trends with constant currency growth of almost 35%. In East Africa, revenue growth accelerated to almost 23% in constant currency. And in Francophone, growth returned to double digit levels at 10.2%, which is an encouraging performance given the acceleration from 5.2% we reported in quarter one. Let me begin by focusing on the performance of the mobile services segment. The trends in the first nine months of the year, and in fact in many quarters prior to that, clearly reflects a sustainable level of growth in this business segment. In the first nine months of the year, constant currency revenue growth of 18.8% once again highlights the low level of SIM penetration across our markets. With our extensive distribution network underpinning the approximate 8% growth in customer base, in quarter three, specifically the customer base Growth and R2 strength drove constant currency revenue up 19.6% and acceleration from the previous quarter. We remain confident that low unique customer penetration levels across our footprint combined with still very low usage mean that there remains a long runway for both voice and data revenue growth across all the three regions. In Nigeria, mobile services revenue grew 35% over the nine-month period, while in East Africa and Francophone, revenues increased by more than 19% and 6% in constant currency, respectively. In Francophone, revenues increased 8.5% in Q3. Let me further break down the performance of mobile services segment between voice and data. Voice, which contributes over 47% of mobile services revenues, continues to be a key driver of the overall trends. Unlike in many other geographies, voice continues to underpin our revenue growth. With revenues growing almost 10% over the period, these trends are largely supported by customer growth as new customers access services for the first time, but also reflects the low level of usage relative to our global peers. However, the scale of opportunity for data services is even more compelling. Data customers increased by almost 14% reflecting the natural pent-up demand for these services. But with a low level of smartphone penetration at just over 44%, a long runway for growth still remains. This combined with data usage per customer growth of over 32% is likely to continue supporting data revenue trends in the future. Enabling this growth is a strategic priority and therefore the investment we have undertaken to ensure great network quality with extensive 4G coverage has been key to unlocking this massive opportunity with over 31% growth in data revenues in quarter 3. The mobile money business continue to see a strong performance with constant currency growth of over 31% in quarter 3 and reported currency revenue growth of 23%. Financial inclusion across many of our markets remain low and we see mobile money as a key facilitator of increased financial service adoption which will support economic growth, and transformation. The transaction value increase of over 30% to $146 billion reflects the continued enhancements we continue to make to the mobile money ecosystem and the continued investments in the distribution network. Reported EBITDA for the nine-month period amounted to $1.68 billion with constant currency growth of 15.3%. The strong top-line growth continues to support our ambition to see margin improvement as operating leverage continues and our cost optimization initiatives drives further efficiencies. In Q1, we saw a combination of factors drive EBITDA margins to a low point of 45.3%, namely rising fuel prices and lower contribution coming from Nigeria. However, from that low point, we have seen a strong recovery in margins to 46.9% in quarter three, a 160 basis on recovery, reflecting the strong progress in cost optimization measures. Despite the macro challenges we've alluded to earlier, we've been able to enhance our reputation as one of the cost leaders across our industry. By leveraging our continued success on cost optimization, we continue to look at options for further cost efficiencies in order to drive further EBITDA margin improvement. Below the EBITDA line, our financial results remain exposed to currency volatility. However, the recent appreciation in the Naira and Tanzanian Shilling did lead to an exceptional gain in Q3. For the quarter ended 31st December, our basic EPS came in at 3.6 cents with EPS before exceptionals of 1.3 cents. In order to reduce volatility in finance cost and as part of a strategy to reduce the balance sheet, we've been focused on reducing the amount of foreign currency debt on our balance sheet. As at the end of December, approximately 92% of our Opco debt is in local currency, which is a substantial improvement from 79% a year ago and reflects the payments of approximately 744 million of foreign currency debt over the last year. While the debt comes at a higher cost, it is considered a much more prudent approach to managing the macroeconomic volatility we experience across our markets, we will continue working to reduce this further. Leverage for the group of 2.4 times has increased over the last year, primarily as a result of extension of our tower lease agreements with ATC, which we announced in October last year. In this quarter, we have introduced another leverage measure, which excludes the impact of lease accounting, which we think better reflects a group's financial market position. Based on this measure, lease adjusted leverage of just 1.1 at one time reflects the existing robust and substantial capital structure enabling our ability to continue investing across our markets and return cash to shareholders. Following the completion of our first buyback, we launched a second buyback program of up to $100 million in December, This buyback, along with a dividend payment made during the quarter, once again highlights our commitment to shareholder returns. Very briefly, I thought it is worth highlighting what I see as a very compelling opportunity in Central Africa. The first point is the strong growth outlook. As I've mentioned before, the scale of growth across the continent is particularly encouraging, given by the structured demographic growth rates, combined with the real opportunity to bridge the digital divide and increase smartphone penetration levels. This opportunity is further enhanced by the ability to drive increased financial inclusion through our mobile money business to promote economic prosperity across our markets. However, I have also talked in the past about the substantial growth available in other areas, and we remain excited about the opportunity in the enterprise space, data centers, and also the home broadband offering. Secondly, a relentless focus on efficiencies and returns will ensure that the flow-through of the revenues will continue to drive profitable growth. Despite the macroeconomic environment, we will continue to focus on the beta margin improvements as a result of these efficiencies. Thirdly, as refresh strategy puts a greater customer experience at the center of everything we do, in order to do this, we continue to invest in our network and improve as well as simplify the customer journeys. Our dearest balance sheet and strong capital structure enables us to execute on these priorities. Importantly, in order to ensure sustained value creation for all stakeholders and to be able to achieve these strategic objectives, the business must be underpinned by a strong risk management framework. Our robust corporate governance strategy is aimed at mitigating risks that we are exposed to. I'm happy to say that our track record speaks for itself. We will maintain this rigorous approach to create value for all stakeholders. And finally, before handing it over to the Q&A, I thought it worthwhile highlighting the recent developments in Nigeria, where the NCC has granted approvals for tariff adjustments. We are very grateful to the relevant authorities for these approvals, which we believe is necessary to ensure the sustainability of the industry and enable us to continue providing reliable and affordable services to our customers. We are aware of the inflationary pressures consumers in Nigeria are facing but see this development as key to maintaining our infrastructure investment to provide a value for money proposition that prioritizes customer experience. And with that, I would like to now open the line for questions for which I'm joined by JD. Operator, I now hand over to you to facilitate the Q&A session.

Thank you very much, sir. Ladies and gentlemen, if you would like to ask a question, please press star then 1 on your touchtone phone. If you decide to withdraw your question, please press star and then 2. Again, if you would like to ask a question, please press star and then 1. The first question that we have comes from Rohit Modi of Citibank. Please go ahead.

Hi, congratulations on good set of results and thank you for the opportunity to ask questions. A couple of them from me. Firstly, on price increase situation in Nigeria, if you can give more color around, you know, now that you've got approval, what kind of price increase do you expect? I believe you've got 50%, maximum 50% approval, but I'm not sure if that's the kind of price increase you're looking for in the market. And secondly, if you can understand it's too early, but if you can give any ballpark or any sense around what kind of margin improvement that you can see, you know, with any percentage of price increase that you see. My question is around if you see 10% price increase, what kind of margin flow that flows into the margin going forward. Lastly, on Francophone, we have seen a bit of erosion in margins in Francophone as well, apart from Nigeria. Are there any specific countries that you're seeing where you're seeing most more margin erosion in that region? Thank you.

Sure. Thanks. So let me take the first question on Nigeria price increase. See, firstly, we are grateful to the Nigerian authorities for the approvals we received. which we see as very supportive for the entire industry and support continued investments into digital infrastructure across Nigeria. With regards to the impact of these tariff adjustments on our business, the approvals are clearly a very positive development. And combined with recent signs of macro stability, we expect a positive outcome to our business following these developments. However, see there is a little bit of an uncertainty around the competitive action around these tariff increases and the elasticity of demand in the method whereby these tariff increases can be implemented. As a result of some of these questions which remain slightly unanswered at this point in time, as it is very early for us to conclude on the real impact that this tariff increase will have on our business, We expect to initiate these adjustments in early February once we hear back from the authorities and these actions have had time to play out. We will have more visibility on the potential impact, which is when we will be able to provide better context to the market on the impact of price increase on the overall market. growth and therefore on the margin improvement. On the margin side, as we, you know, as we said that it's a very positive development. The, you know, the additional revenue we expect would not come with material cost increase and therefore we would, we should see, we would see an uplift in revenue trends as supportive for the EBITDA, you know, margin progression. That's how we see this entire pricing play out with respect to impact on our overall revenue growth and also margin progression. With respect to francophone, which is the third question that you asked, we've seen growth accelerate in francophone from circa 5% growth that we reported in francophone in quarter one to a double-digit growth that we're reporting in this quarter of 10.2 percentage points. So, growth has done well. The margin progression from quarter to quarter, from last quarter to this quarter, we're seeing slight dip, which is primarily due to the higher marketing spends that we have had to drive our growth and spread our assets in francophone. That's the only thing. Other than that, there is nothing else.

Thank you so much.

Thank you. The next question we have comes from John Caradis of Deutsche Bank. Please go ahead.

Thank you. Thank you for taking my questions. Just a couple of additional questions on the price increase, please. So you answered the question about timing early February. Can you also tell us what proportion of your revenue in Nigeria is is relevant to this price increase, please. And then related to this, it's sort of quite clear that your exposure, for example, your OPEX exposure to the U.S. dollar is significantly lower than your largest competitors. And certainly to date, you've been very keen to keep prices as low as possible in order to encourage greater usage and greater take-up. So do you foresee going forward some sort of diversion in the strategy between you and others regarding taking advantage of this price increase, please? The sort of second and final question for me, by my calculations, you're likely to keep upstreaming a significant amount of cash to the holdco. And I note your second buyback, but it's not like the liquidity of your stock is significant. So there's a very small percentage of the equity that's actually listed. So what other ways would you encourage us to think about when it comes to returning cash to shareholders, please?

Thanks, John, for those questions. Let me answer the first one. For the third one, I'll hand over to Jaggi to answer the third question. On your first question, 75% of the revenue in Nigeria is exposed to lead to the price increase. And on your, you know, on your question, our stance on the pricing, see, we've been reaching out to the authorities and seeking this price increase, you know, over the last almost about a year now. And we are very thankful to the authorities that they finally listened to the, you know, to our request, because this was more also to, you know, this price adjustment was required to also repair you know, our overall business so that we continue to make investments in the growth areas. With respect to whether we would like to, you know, go for the full extent, right now, the way we look at, as I said, we don't have any understanding of how the competition will react. So we are looking at, you know, what is required for us from the point of view of pricing. We've been allowed up to 50%. We've submitted our proposal and we are waiting to get back, you know, from the authorities. With respect to driving growth, our focus is while pricing is needed. We've been requesting for pricing and this was needed for making sure that our business remains robust. For driving growth, other than pricing, our focus is actually more on making sure that we continue to execute effectively in the marketplace, both in terms of acquiring customers. Once we acquire customers, deliver great experience to our customers, and that's what we've been focusing on. And other than that, we've actually opened two other streams of revenue, which is home broadband and focusing on enterprise, and basically build capabilities to be able to go after these opportunities. That's how we see business, and that's how we would like to drive, you know, driving growth across the markets, including Nigeria. And we are very, very, you know, positive about the growth opportunities that the Nigerian business offers. So, you know, that's how we're seeing the entire thing. And pricing remains, you know, not one of the, you know, key focus areas for us to, either drive growth or to gain market share. It's one of the levers. The big focus is on in-market execution, on acquiring customers, retaining customers, and especially opening up the two areas that we have not been very actively present in. And that is also reflected in some of the growth that we've seen in the Nigeria business.

Alright, so on the upstreaming part, let me clarify a bit. Firstly, you know, Nigeria, because of last year and this year's first two-quarter devaluation, the accumulated loss has obviously gone up and Nigeria doesn't have distributable reserve. So, there is hardly any way we can upstream money from Nigeria anymore, at least for next 12 to 18 months yeah if everything stabilizes it will still take about maybe two years to recover from the accumulated loss because of this foreign exchange loss which has happened unless there is a significant appreciation which happens under and the loss is reversed which is at this moment we don't have too much visibility on that now if you exclude nigeria the other upstream possibility is from east africa and franco africa which we continue to do by way of two means. One, if we have distributable reserve, which is by way of upstreaming the dividend from the OPPO and the second is shareholder loan. Now, the good news is that our shareholder loan has started coming down significantly. And there will be hardly any further shareholder loan repayment opportunity left out. Maybe after one or two quarter, we will be completely done with the repayment of shareholder loan. So what I'm trying to say is that the upstreaming flow will come down because there is no further shareholder loan which is left out and Nigeria is under, you know, accumulated loss. So at least in near future, Nigeria will not be able to upstream. So the amount of upstreaming which you have seen in the past will substantially come down. However, will be sufficient to take care of the shareholder return based on the current dividend policy and the buyback which we have offered. So we will not be having a very significant amount, you know, accumulated at a hopeful level to look at any further options or opportunity. But the last piece is, obviously, the board will reassess based on the all parameter, the dividend policy. And if there is any change in the dividend policy, we will let you know in due course.

Thank you. Sorry, if I may, just a follow-up on something completely unrelated. I expect that if you had any news on the mobile money IPO timetable, and progress, you would have declared that already proactively. Can you at least at this stage talk about where you're hoping to lift your mobile money business in which geography, please?

See, we're still working, you know, we still stand by the commitments that we've made, you know, on the IPO, which was four years, you know, And that timeline is around July of this year. It is the same answer as last time that we had provided. And we still have six months, you know, before we go for IPO. And we will give, and we're preparing for the IPO. The groundwork is in progress. And we will keep you informed at the appropriate time. But there is, at this point in time, there is nothing more to share. But we stay committed on our timelines.

Thank you. I just had to try. Thanks very much.

Thank you.

Thank you.

The next question we have comes from Taj Ibrahim of Chapel Hill Denim. Please go ahead.

Yes. Good afternoon. And thank you for the presentation. And congratulations on your on the recovery that we have seen in your numbers. My first question is around the price increase in Nigeria. So because we have seen several news flows around subscribers kicking against it. and threatening to go to court. Also, in the early part of next month, the Nigerian Liberal Congress is planning to stage a protest on the back of that. They want the regulator to bring the 50% maximum down to 10%. So my question is, in the midst of all of this, agitation, what do you expect in terms of the ability of the industry to push through with the approved price increase? Do you see any of these elements I've just mentioned as major threats to the implementation? That's the first question. My next question is actually around the IPO, around the mobile money business. I know you have talked about the nexus month. I don't know if you would like to share a bit of more color. Should we be expecting the month of May or the month of June? Just to give us better insight around what you are working with internally. My final question is around the CAPTCHA expenditure. Which areas should we watch out for in terms of the deployments of CAPEX in the final quarter and also going into the next financial year? Thank you.

Thank you very much for those questions. On the price increase in Nigeria, you know, the authorities, you know, gave us this price adjustment after a very, very rigorous process of, you know, over the last 12 to 15 months that the industry has been following and seeking, you know, price corrections or price adjustments. And our demand was significantly higher. This is out there in the media. But after a very rigorous process and having considered the current environment in the market and also the need of the industry to continue to invest and deliver experience to our customers, to the existing customers and also to continue to invest to bring more people, more customers into digital and financial inclusion, the authorities came to this conclusion of up to 50% price increase. Now, having said that, we've, this is the, you know, the approval that we received from the authorities to go up to 50% of price adjustment. We've submitted our proposal to the authorities. And we are hoping to get back from them very soon. And then once we hear, we will roll out these pricing in the marketplace. Now, on the IPO, as I replied to John on the previous question, our answer remains the same. We are working towards the timeline that we had committed. And if there is any update we will provide when we meet after the next investor call at the end of the full year results. On your question on CapEx, we do not have guidance for next year. As we come close to the year, we will have more firm view on the next year likely investments and we will communicate the same during the full year of FY25 presentation. With respect to this year, we maintain our guidance of CapEx of about $725 to $750 million. But we do believe that CapEx will come towards the bottom end of the range provided. But our overall priority remains around investing in our business and sustain the strong levels of growth that we have seen of late.

Okay, 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 Jonathan Kennedy-Good of Prescient Securities. Please go ahead.

Good afternoon, and thank you for the opportunity to ask questions. Just a follow-up on the CapEx network quality at the moment. Can you give us a sense of how the network is performed? given a low level of investment since, you know, the currency collapse. And in the past, there have been quality of service KPIs that have been stringently applied by the regulator. Are those all being met at the moment? And do you foresee, you know, a strong reacceleration in CapEx given the price increase adjustments? Thank you.

Thanks, Jonathan, for those questions. Let me just, you know, first and foremost say our capex that we said, you know, in terms of guidance between 725 to 750, even 725 at the lower end of the guidance will be very similar to the capex that we invested last year. With respect to our network performance, you know, if you look at our refresh strategy, Our CapEx is, our customer experience is at the center of everything that we do and therefore we are very, very focused on delivering great customer experience to our customers, network and non-network both. On the network side, the question that you raise, one, there is a quality of service expectation from the regulator. We take those requirements very, very seriously and we comply with the you know, with the quality of service requirements across. And this year, the capex, you know, the numbers that we are seeing, if it's only a phasing and you will see a lot of capex investments in quarter four, which will lead up to the guidance that we just provided. So from an experience point of view, we don't have any concerns. And we have enough tools, digital tools, which help us to understand the level of customer experience. And there are no concerns whatsoever that we have.

Thank you. That's very helpful.

Thank you. The next question we have comes from Lynette Meringuni of Apsa Bank. Please go ahead.

Hello and congratulations on the strong earnings recovery. Three questions from me. One, do you anticipate further ARPU pressure from the price cut in Francophone Africa? The second is on Malawi. Could you please expound on Malawi's hyperinflationary outlook? And what is Airtel Malawi's net financial position? Is there any guidance that you could share on how we should think about non-monetary gain and deferred tax beyond Q3? And finally, in Nigeria, do you see any risks to your fixed data business stemming from Starlink's launch last year? Thank you very much.

So, let me first, you know, start with your last question, which is on Starlink. See, if you look at the fixed data business, the market is still, there's a massive opportunity and we've just entered that, you know, this market. effectively in terms of a very serious play. So we see this business to continue to grow very aggressively. There is no reason because there is a very large market out there. With respect to Starlink, you must have read, probably it's out there in the news, in many markets, given the constraint on capacity, Starlink has stopped to acquire customers. And as they add capacity, that is the window that remains open with us. But we are exploring all opportunities and making sure that we stay focused on building our go-to-market capabilities, both in terms of building network capabilities and go-to-market capabilities, and then managing and servicing our customers effectively. So we are very, very focused on this opportunity. On the Francophone ARPU, the On, if you look at, you know, a large portion of our revenue in francophone comes from, on data, we've seen, you know, acceleration in data revenue, data from circa 4.2 to 4.4. The data usage per sub remains very, very heavy at about 26, 27% growth over last year. And we don't see any concerns per se. And, you know, with acceleration of growth and acceleration of our customer base, we have grown our customer base at about 19% in Francophone. And that has a, you know, kind of a little bit of a bearing, but there is no concern from an ARCO point of view. because our data consumption remains very robust in Francophone. So that's on Francophone. On Malawi, I'll hand over to Jerry.

So Malawi, what happened is, it's very technical account fee standard, but I'll try to simplify it. Basically, Malawi, what has happened is that last three years, Malawi has crossed cumulatively more than 100% inflation. And IAS 29 suggests that there is an assessment which has to be done by certain authority to assess whether the economy is required to be reset based on hyperinflation accounting or economics. So in this case, all the big four, they have done the assessment and came back and suggested that Malawi, we should apply IS-29 and IS-29 suggests that we have to recast our balance sheet. All the opening debt for the non-monetary assets and liabilities has to be adjusted based on the CPI linked inflation and that adjustment is on the non-monetary assets and liabilities. Now, in our balance sheet, The largest non-monetary item is the goodwill. And that's why the impact of $308 million has come in the balance sheet to balance sheet adjustment. So the asset has gone up and the revaluation reserve has gone into the reserve and surplus. So that's the way this accounting happens. So it is a balance sheet to balance sheet movement. of recasting the non-monetary item like goodwill and couple of other items but goodwill was the significant amount then you have to also apply the same principle from 1st of april for the current period and again the goodwill has to be readjusted and adjusted against with the with the evaluation reserve and that impact the net impact is flowing through into the P&L and that's what you see that circa $14 million impact in the P&L which has come. It's primarily because of the period 1st April 24 till December 25. Just to add one more point, if this inflation continues and doesn't come down, every quarter we have to do that adjustment and some amount can be further coming into the P&L because you are allowed to recast only the opening balance sheet, balance of the net impact has to come in the P&L. So broadly, I hope I have been able to explain this little tricky accounting standard which we have, IFRS accounting standard.

Just one brief clarification from my point. The inflation of over 100%, that's a cumulative three-year inflation, just to clarify that. Inflation isn't over 100% currently. It's the cumulative. They look at the cumulative three-year inflationary levels. Yeah, I mentioned that in the beginning.

Thank you. The next question we have is from Samuel Gabadebo from Cardinal Stone Securities. Please go ahead. Samuel, your line is live, sir. Apologies, we have no audio from Samuel's line. The next question we have comes from Tracy Kunvunya of SBG Securities. Please go ahead.

Thank you, gentlemen. Congratulations on the numbers. The first question is on Nigeria. So we see an acceleration in subscriptions in the quarter, but When I look at revenue from second quarter to third quarter, there seems to be a bit of a slowdown. I just wanted to understand what's driving that and how you are thinking of revenue growth going to the fourth quarter. Do you think it will stay through the third quarter? Is there room to accelerate back to second quarter levels? And then second is following on a question previously asked on quality of service. So with the with the time increases in Nigeria, the commentaries from both talk us into to speak about heightened network quality requirements. So if you could possibly capture that in a bit more detail, what what has really changed in terms of the network quality demands of the regulator with the Is it, what is it in particular that is going to change in terms of the network quality requirements for the HTC?

Thank you. Tracy, I think your audio was not very clear. So I'm just, you know, repeating the question so that our understanding is correct. Your first question is around Nigeria growth. Is it sustainable or Nigeria growth has slowed down from quarter two to quarter three? Because audio was not very clear. That's the reason I'm kind of seeking this clarification.

Sure. So, yes, I was asking about the slowdown in growth from 2Q to 3Q.

Right. Okay. So, you know, if you look at... The growth in Nigeria, while it has moved from 38% circa to 34% in quarter two to quarter three, but the growth still remains very robust. We have seen about 19% growth in our voice usage and about 40% growth in our data usage. So the growth remains very, very, very robust. So, you know, it was 38% and 34%. It has a little bit of a base effect because quarter three last year, you know, we saw a little bit of a surge in growth. But quarter on quarter movement, you know, remains very, very healthy in Nigeria. So, therefore, we remain very, very confident about the growth opportunities in Nigeria and we continue to invest. both in network and our go-to-market capabilities in Nigeria. So, you know, that's my response to your first question that you asked. The second question is around, you know, just saying the quality of service requirements. The, you know, the quality of service requirements that, you know, the regulator has as we are today also we are compliant. But we continue to make investments, which I was responding to another question. We remain focused on delivering both great voice and data experience to our customers. And we are compliant of quality of service requirements. And wherever there is need for us to invest more, Nigeria is a very strong growth opportunity for us. We will continue to invest and make sure that we continue to make investments in the right areas to sustain this level of growth. And we are in constant touch with the regulator and We will ensure that there is nothing incremental or specific where we are non-compliant that we have to do. We are compliant. We are delivering great experience that is reflected in the growth that we are seeing that is also reflected in the consumption that we are seeing. And if there is any further investments to be made, as I said, it remains a priority market and we continue to invest.

Thank you. Thank you. The next question we have comes from Madhavendra Singh of HSBC. Please go ahead.

Yes, hi. Thanks a lot for taking my question. Can you hear me okay? Yes. Great, thank you. So I have a couple of quick follow-ups and then a couple more if that's okay. The first question I have is on your mobile money IPO plans. If you could confirm that is on track for i think august is the deadline if you could update on that second question is again a clarification on your uh you know renewed leases what we have seen is that kpex has come down uh again uh this quarter so just wondering whether there is any um specific uh let's say benefits you are getting from the renewed power contracts which allows you to have lower capex for longer in any way. And then the third question is on Nigeria, you know, the clarification. I think you're talking about that cumulative inflation of 100% over three years. So does that trigger any specific accounting treatment at the Nigeria level? If you could talk about that. I'm specifically asking about hyperinflationary accounting, it at all. And then final point on the price hike in Nigeria. I was wondering if you could share initial thoughts around elasticity which you would expect and has the price hike been implemented already or is there any operational steps left still before implementing that? Thank you. Sure.

So there are four questions. Let me just quickly respond to the first one that you asked, which is on the mobile money IPO. The answer remains the same. We are right now working towards making sure that we remain committed to the IPO. In July is the timeline, July 25. And we have another six months. And, you know, By the time we come back at the end of our full FY25 results, we will be able to learn more clarity and address most questions that have been asked during this call. On the capex, the question that you asked, there is the capex number that you're saying, it's nothing but the phasing. You know, the guidance is what we said. We stick to our guidance of 725 to 750 million. The only differences, you know, the only additional point that we're making is the way it will be towards the lower end of the guidance. Having said that, it will still remain equal to, very similar to the capex that we invested last year and therefore it has got no bearing on on our, you know, ATC renewal, et cetera, et cetera, that doesn't have any bearing on our CapEx spend. We spend CapEx on the basis of the growth opportunities and the growth potential that we see. That is the guiding force and that we remain committed to that. On the third question that you asked, you know, this 100% three-year cumulative inflation, that was to Malawi. and not Nigeria. As Jaydeep was answering question, you know, to the other question that was asked on Malawi hyperinflation, in that context, we made this point on cumulative three-year inflation being 100%, not Nigeria. On your last question on Nigeria pricing, the Nigeria price adjustment, as I said, it is very difficult given, say, for example, there are a few moving parts with respect to, you know, It's a very, very positive movement. First of all, I must say that, and we welcome this decision from the authorities and thank them for having given this price adjustment to the industry, which is much needed. Having said that, at this point in time, how the competition will react, how the customer will react, it is too early for us to comment on the price elasticity or the impact that it will have on our business. With respect to procedure, we've applied for, you know, there is, it's a standard process. We've submitted our plans and we are waiting to hear back from the authorities. And as soon as we hear, we will roll our press.

That is very helpful. Thank you very much for taking my question. Thank you. Thank you.

The next question we have comes from Mayuran Rajaratnam of Merkva. Please go ahead.

Good afternoon, and thank you for the opportunity. I've got two or three questions. The first one is the data usage in Nigeria. It's about 12 gigabytes per smartphone user. Can you give us some color as to what this distribution looks like? I mean, is there like 20% of the customers that use very high data, let's say something like 30-odd gigabytes, and there's 80% using what? to get the average back to about seven gigabytes? Or is it more like a bell shape? Is there an 80-20 principle or is it more bell shaped? That's the first question. That's specifically to Nigeria. And then secondly, in Nigeria you mentioned that only 75% of the revenue is relevant for the price increases. Can you give us some more color as to what's not included there? What sort of service doesn't get the benefit? And lastly, The industry has been rightly saying that price increases are needed, given your capital is largely dollar-denominated, and that to sustain even the smaller players, you actually need annual increases. So that's something maybe not inflationary, but sub-inflationary, but annual price ups. Is that something that's still being talked about or not? I mean, given... to diastate some of your smaller competition is currently. Thank you. Three questions.

Thank you. On your first question, we are seeing very robust data consumption growth per user in Nigeria, which is a combination of two or three things. One is as customers upgrade from from feature phone to smartphone and then is from 3G smartphone to a 4G smartphone. That is the kind of, you know, increase that we are seeing. The usage normally is almost about, you know, we see a multiple and that also leads to an increase in overall stickiness of the customer in ARPU, therefore. Having said that, you know, We don't declare numbers of composition of our base, but our focus remains on making sure that each time when a customer upgrades from a feature phone to a smartphone, and especially from a smartphone to a 4G phone, that customer remains with us. We deliver great experience and then therefore drive consumption for, you know, and drive consumption. And that is being reflected in our overall data usage and data usage for customers. On the 75% price increase, the balanced 25% primarily comprises of gas services that we offer and the IOC revenue that we have. So these are two components which is outside the purview of the pricing. On your third question on whether the annual price increases and therefore passing on inflation, See, right now, we are focused on making sure that this price adjustment, because this is where the conversations have been, and we pass on this price adjustment and make sure that this is effectively implemented in the marketplace. That's what I think the entire industry is focused on. And that's the other conversation, which is annually, how does it happen going forward? That's, you know, subsequent conversations that we need to have. And as we have more clarity on that, that we will provide.

Thank you.

Thank you. The next question we have comes from Ali Hussain of FIM Partners. Please go ahead.

Thank you very much. And thank you all for this presentation. The question I had is slightly different, is twofold. One is on Nigeria. I've noticed that the voice minute usage has been increasing, and it's kind of surprising in this modern-day world when people use OTT apps, et cetera. Can you sort of comment on is this driven, is this fundamentally driven, or is this because of attractive price offering, which is allowing the minutes used to go up? And then number two, I know the details on the IPO are scarce at this stage, but if I may ask, you know, because you have private equity investors in Airtel Money as well, are you going to be selling down in line with them, or is this just going to be an exit for those PE investors? Thank you.

Sure. Let me answer your first question on voice usage. See, if you look at Nigeria business, the voice usage is a function of our base growth and overall consumption usage. In many markets, we see voice usage starts to taper down and people move to OTT if the voice ARPU or the cost is high. If you look at Nigeria, our voice ARPU is circa 90 cents. And therefore, there is less incentive or reason for customers to switch to OTT. And that's the behavior that we've seen. And then there is a large number of 2G customers, which comprise of this voice usage as well. So that, you know, to a large extent, you know, leads to an increase in voice usage consumption per customer. The third also is we are seeing acceleration in this is also, you know, the quality of the voice experience. And as we just keep expanding our coverage and we get more people into our coverage, we'll continue to see some amount of, you know, voice consumption per customer going up. And this is what is reflected in our numbers so far. On the IPO, you know, it's very similar to what I said before. We are right now in the process of preparing for the IPO, and we are committed to our July timelines. And any further detail on, you know, what happens to our holding and partners, we will provide, you know, as once we have clarity, hopefully in the next call, when we have the full year 25 results, we will be able to throw more light on some of these questions.

Okay, wonderful. Thank you so much.

Thank you. The next question we have is a follow-up from Rohit Modi of Citibank. Please go ahead.

Hi. Thank you for taking my question again. Just one follow-up, Jerry, for you. You mentioned upstreaming looks like difficult for next two years from different local and off-course, particularly Nigeria. How comfortable you would be to include again, increase the leverage at Holdco level. And also on the similar lines, I believe one of the reasons for increasing leverage at Opco level was you're getting the tax benefit on your interest, which you're not getting on the Holdco level. But given now you have losses at Nigeria level, you may not getting that tax benefit. So does that make sense for you now to move, have more debt on the Holdco level than Opco? Thank you.

So firstly, I reiterate that our objective is not to create debt at holdco level unless it is taken for any specific objective. At this moment, for running our operation, we definitely do not intend to take any loan at holdco. For a simple reason, all our income are in local currency, respective local currency. And we have seen the turmoil which we have gone through in the last 24 months, right? Taking loan at Holco and repaying it through the local currency cash surplus is not the right choice at this moment. We have to wait and watch. Second, as such, we don't need any money at Holco level because, as I said, that even though the Nigeria at least in next 18 to 24 months, we do not have the opportunity to upstream against the dividend because of the accumulated loss which we have. However, the other of course continue to upstream. So all I have given a trying to give a comparative that comparative to last year, this upstream will come down, but that is sufficient to take care of our dividend pay out to the shareholder or even running the buyback program. So from a servicing perspective, we don't need a huge amount of upstream unlike earlier when our bond was due for repayment. So that part is not there. Therefore, our objective is not to create any hopeful level debt at this moment. And because we are pretty confident that From the other OPCO, we will continue to do the upstream as per the requirement of the OPCO or specifically for return to the shareholder.

Got it. Thank you so much.

Thank you. The next question we have comes from Samuel Ogerende of Cordross Securities. Please go ahead.

Okay, good afternoon and thank you for the opportunity. So I have two questions. My first question centers around the $144 million exceptional gain you reported in Q3 2025. So you attributed this to the acquisition of Tanzanian shillings and the Naira. So can I please shed more light into it, because from my perspective, the Naira didn't appreciate, I mean, between Q3-24 and Q3-25, Naira ranged between 700 to 1,000 in Q3-24 and between 1,500 to 1,700 in Q3-25. So where is the appreciation stemming from? Also, is this something we should expect in Q4-25? And my second question is around the cost efficiency program. So can you also provide more insight into that as to what has been done, what is currently in the works, and what we should expect in the future as well? Also, not to cherry-pick your words, but in your press release, you mentioned that initial successes contributed to EBITDA margin accretion. So are you saying progress has slowed? Thank you very much.

Okay, so the first question let me try to answer. So the way this gets calculated, September 24, our closing rate, and this was the official rate of 1668.97. Okay, that was September 24 closing, which was, and when we started the year, it was 1303. October, it went up to 1660, sorry, October, it was 1661, vis-a-vis 1668, so it was at the same level. November, it went up to 1683, and December closing, it came down to 1544. So, if you see the quarter impact, the opening was 1668, closing was 1545, And therefore, the Naira appreciated by 7.5%. That impact, when you do the calculation of the dollar liability, gives you an appreciation benefit, which has been recorded in the books. Similarly, Tanzania, if I call out the number, the Tanzania shilling has been 2730 end of September. has appreciated to 2445, which is 10% appreciation in Kanzani and Shillings. Again, the gain on restating the dollar liability has been recorded. However, this gain, the total gain was roughly about 145 million dollars, but there was a depreciation of other currencies, especially on SIPA, SIPA has depreciated from 607 in September to 631. Sorry, 587 to 631, which is again a 7.5% depreciation. Therefore, a part of that appreciation got set off by this depreciation of SIPA in the four countries. And therefore, what you see as a net impact in the P&L industry.

So, on the second question that you asked, Samuel, on our cost optimization program, we launched this program beginning of this financial. It's an ongoing program which will benefit us in, you know, over a longer period of time. We intend to optimize cost by using technology as well as initiatives like renewable sources of energy, planning new sites at better grid availability locations, etc. So these are certain structural changes that we are doing to reap the benefits and it comes with a little bit of a lag. And having said that, we've seen our EBITDA margins this year expand from 45.3% in Q1 to 46.9% in Q3, which reflects the initial success of this program.

Thank you, Sal. Ladies and gentlemen, we have reached the end of our question and answer session. I will now hand back to Sunil Talda for closing comments. Please go ahead, Sal.

Thank you. And I would like to thank you all for joining this call. And I look forward to speaking to you again and hopefully meeting with many of you later this year. Thank you. Thank you once again.

Thank you, Sal. Ladies and gentlemen that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.