Airtel Africa Plc

Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa Q1 2026 results call. 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.

Good afternoon, welcome and thank you for joining us on today's call. I'm joined on the line by our new CFO, Kamal Dua, who, as you know, has taken over following Jaideep's retirement after the AGM earlier this month. I want to welcome him to his new role and wish him well as we continue advancing a strategy and delivering value to our shareholders. 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 the performance over the last quarter. I am pleased to report that we have continued to see strong growth across our markets, reflecting our focused strategy, disciplined execution and resilient business model. I believe the scale of opportunity across the footprint is best captured by the very strong and accelerating constant currency revenue growth of almost 25% and EBITDA growth of almost 33%. Importantly, we are very encouraged by more stable macro environment, which has resulted in strong reported currency performance. With this backdrop, it gives us increased confidence in enormous opportunity that is on offer, enabling us to advance digital and financial inclusion to support economic progress across our markets. Our strategy of providing a great customer experience is at the center of these results. The continued increase in smartphone penetration to approximately 46% and almost 46 million mobile money customers is testament to our relentless focus on providing a service to our customers that is differentiated and most importantly reliable. One innovative example of this inaction is the rollout of ATL SpamAlert, It's an AI-powered solution which uses technology to protect our customers from the risk of fraud and drives increased trust. We've seen a very positive customer reaction to this offering, and we will continue to differentiate our services and invest in new capabilities to meet our evolving customer needs. Smartphone penetration remains low, and the significant growth opportunity can only be captured if we consistently enhance our customer proposition. this focus strategy has been underpinned by continued success and cost efficiencies and the robust capital structure allows us to continue investing in the future to drive further shareholder returns let me now briefly run through the results over the last quarter revenues reached 1.4 billion dollars which was 24.9 growth in constant currency this was an acceleration from 23.2 growth in quarter four as the full impact of tariff adjustments in Nigeria came into effect. But importantly, we also saw an acceleration in francophone revenue growth to 16.4%, reflecting sustained success in our strategy in that region. Given the more stable currencies, this translated into a strong growth of 22.4% in reported currency. 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, demand for data services and the impact of tariff adjustments contributed to a very strong 48.9% growth in revenues. In East Africa, revenue growth remained strong at 20.3%. While in Francophone Africa, growth accelerated to 16.4%, as mentioned earlier. Let me begin by focusing on the performance of the mobile services segment, which continues to show compelling growth rates. Over the year, quarter one revenues increased 23.8% in constant currency and almost 21% in reported currency. Another acceleration from the prior period. This level of growth clearly reflects the continued demand for data services in particular and our ability to capture this inherent demand through strong on-ground execution. Ensuring a strong distribution network to reach new and existing customers while continuing to invest in the network is fundamental to driving higher SIEM penetration and customer growth. The total customer base reached 169.4 million up 9%, with data customers of 75.6 million, up 17.4%. Despite the continued expansion of our customer base, ARPU levels continue to rise with ARPU growth of 13.5%. Voice traffic across our network continue to see double-digit growth, supporting overall voice revenue growth of almost 14% in constant currency. However, data continues to be a service where demand remains substantial. data traffic continued to increase growing 47 percent as data usage per customer increased 26 percent to 7.8 gigabytes per month however smart smartphone usage per per customer reached 9.6 gigabytes per month which highlights the overall scale of the data opportunity as smartphone penetration which remains low at 45.9 percent remains a substantial support for the growth overall Overall data revenues increased approximately 38% in constant currency. We remain confident that low unique customer penetration levels across our footprint combined with still very low usage means there remains a long runway for both voice and data revenue growth across all the three regions. Now on to a very significant growth engine for us, the mobile money business. The mobile money growth story is also very compelling. and this quarter's performance is no exception. In constant currency, revenue growth also accelerated to 30.3% with 31% growth in reported currency. The unbanked population across the markets provides a unique opportunity for us as we invest in our technology and the range of financial services to drive financial inclusion to support economic growth and transformation. We have almost 46 million customers using the services But with almost 170 million GSM customers, this provides a massive captured market to sell these financial services to even more customers. The broadening range of services on offer and our enhanced digital offering will be key to driving continued transaction value on the platform, which reached 162 billion on an annualized value, a growth of 35% and help sustain continued ARPU growth. Now coming to overall EBITDA performance, our cost efficiency program, which we launched a year ago, continues to deliver results. In quarter one, we reported EBITDA margins of 48%, an increase of 45.3% a year ago, and another sequential improvement from 47.3% in the prior quarter. We will continue to focus on additional cost efficiency measures in order to drive EBITDA margin expansion. The cost efficiency measures continued operating momentum and more stable fuel prices all contributed to 32.7% growth in constant currency EBITDA and approximately 30% growth in reported currency EBITDA to $679 million of EBITDA in the last quarter. EBITDA margins in Nigeria have returned to very heavy levels of 55.6% with East Africa margins remaining strong at 51.9% The strong rebound in growth in the Francophone region has also contributed to an improvement in EBITDA margins to 44.2% in the quarter. Below the EBITDA line, our financial results have benefited from more stable currency environment across the region. Given this backdrop and the strong growth across the business, basic earning per share came in at 3.4 cents during the quarter, up from 0.2 cents in the prior year. As many of you know, we have been working extensively on our de-dollarization strategy, which I'm pleased to say has been very successful with 95% of our OPCOT debt, excluding lease liabilities, now based in local currency. Leverage for the group of 2.2X improved from 2.3X the end of March, but has increased over the last year, primarily as a result of the extension of our tower lease agreements with ATC and IHS, which added approximately $1.3 billion of debt onto our balance sheet. However, on a least adjusted basis, leverage has remained flat at 0.98 YY and we continue to see this as a sustainable capital structure. This will allow us to continue investing across our markets with our CapEx plan for this year remaining intact. and we therefore re-trade our $725 to $750 million CapEx guidance for the year. This investment will continue to support the strong levels of growth we enjoy across the continent and will underpin our attractive shareholder return policy. In May, we launched the second tranche of our share buyback which will return up to $55 million of cash to shareholders This buyback alongside the consistent dividend policy once again highlights our commitment to shareholder returns. As you can see, this quarter's performance has resulted in strong growth trends in both the operational KPIs but also in financial terms. Very briefly, I thought it worth broadly discussing the key factors that underpin this growth and why we continue to see a very compelling outlook for the investment case. Firstly, we operate across a diverse range of markets with three main factors supporting the growth proposition. First is the size of the addressable market. We operate across markets with a total population of over 600 million people, growing at 3% annually. Not only is the scale of this significant, but it's also the age profile of these markets which will continue to underpin the opportunity. We estimate that by 2030, there will be an additional 76 million people reaching the age of 15 years and older, which will be our customers for the future. The second is the growth in telecom services. With unique SIM penetration between 40 to 50% and data voice usage remaining low in a global context, the ability to sustain industry-leading growth rates in telecom services is encouraging. Smartphone penetration remains low and this will continue to underpin the strong growth outlook. And finally, one cannot ignore the vast opportunity that mobile money brings to this group. With over 90% of transactions in cash and 65 to 70% of adults unbanked, the financial services proposition we offer to a young, digitally savvy population is clearly unparalleled and will be another key attribute of our growth proposition. Secondly, our relentless focus on efficiencies and returns will ensure that the flow through of the revenues will continue to drive profitable growth. And thirdly, our refreshed strategy puts a great customer experience at the center of everything we do. Without this and the sustained network investments to offer these services, the ability to capture this growth will be compromised. It is this strategy that will be fundamental to the success. Importantly, in order to ensure sustained value creation for all stakeholders, And to be able to achieve these strategic objectives, I'm very pleased with the strong risk management framework we have in place, which has consistently mitigated risks that we face. And our track record is testament to the tireless work we undertake to ensure risks are mitigated. We will maintain this rigorous approach to protect and create value for all stakeholders. And with that, I would now like to open the line for questions, for which I'm joined by Kamal. Operator, now I hand over to you to facilitate Q&A sessions, please.

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

Thank you for the opportunity. A couple of questions from my side. First one on the Francophone region. So you had a very strong growth during the quarter. So could you please provide some color on what factors that contributed to this? Which countries in the region are driving this? And also, how do you see the momentum for the rest of the year? And my second question is on the EBITDA margin for the group. So it has improved strong during the quarter. So how much of this improvement is structural versus temporary factors like the fear of price stability and others? So also how do you see the margin development for rest of the year? Thank you.

Thank you, Ganesh. Let me respond to your first question first, which is on Francophone. See, if you look at, you know, Francophone are, Our base growth, you know, it's the fastest growing, you know, across all our three market segments. So we've had a very strong base growth of about 11.3% in Francophone markets. We've seen consistent performance in Francophone over the last four quarters. Last quarter, I mean, last year, quarter one, our growth was at about 5.3%. And from there onwards, you know, we've seen consistent improvement in our growth rates. which in my mind is fundamentally because of two reasons. One is a very clear focus of, you know, what our teams have there on a strategy and therefore the execution, on-ground execution of delivering great customer experience, acquiring quality customers has led to this kind of base acceleration and also our revenue growth. Overall, you know, we've also seen a significant stability in the environment, which is driving this growth in the Francophone region. Lastly, if you ask me, the, you know, the overall opportunity in Francophone region is very, very compelling, which is also true for, you know, while overall Africa, we're talking in the context of Francophone, it's still there is a significantly large penetration opportunity that we have in francophone you know overall africa operates at about as i said 40 to 50 that's a range we have across markets there are parts of francophone where the penetration opportunity is actually even larger so that's one upgrade is another very very large opportunity that we have in uh in francophone and we are seeing this and that is the reason we are seeing upgrade from 2g to 4g phones and that's driving growth and predominantly it's the data consumption which is driving the growth in the francophone markets. So, given the opportunity that we have, which is very, very compelling, our quality of execution that we have and we continue to make investments behind this growth opportunity, we remain very, very confident of this trajectory continuing in francophone markets. Coming to your question on EBITDA, you know, last year in quarter one, we have launched our, you know, cost efficiency program and over the years, this cost efficiency program has consistently delivered results and we have seen, you know, this program continues to deliver. The margin, if you ask me, is a function of two or three things very broadly, which is what we're seeing, this margin improvement. The first is very clearly the cost efficiency program and the focus on eliminating waste, which is something that we've been doing. And we are very cautious that no growth spend is kind of compromised. It's only eliminating waste. That is one. The second is we have also seen a more stable macroeconomic environment. The fuel prices have been stable and that seems to be contributing to the overall margin improvement. That in my mind is the second factor and the third is obviously if we continue to deliver better top line performance, we are seeing the overall flow through that is contributing to the margin improvement in the overall business. And it's very, very difficult to distinguish the, you know, the impact of the macroeconomic stability and the other factors. But, you know, the way we see it, it's a combination of these three factors. Our cost efficiency program, which continues, you know, with even more rigor. The second is the macroeconomic, you know, stability. And then continued progression on our overall top line growth, which is contributed.

Thank you.

Thank you, Sam. The next question we have comes from Rohit Modi of Citi. Please go ahead.

Thank you for the opportunity and congratulations on a great set of results. Three from my side. Firstly, in Nigeria, on the elasticity, we have seen the voice usage per customer has declined this quarter. suddenly the growth has declined over quarters, but this quarter it has actually declined as a negative growth. But on the other hand, data actually grew significantly compared to last quarter. If you can give a bit more color, you know, if it's like the elasticity that is impacting the voice or it's the shift from, you know, due to VIP and higher smartphone penetration that's moving. So a bit more color on the voice elasticity there. Second, sorry, can on margins, particularly on Nigeria, and you clearly have a bit of a benefit coming from the tariffs. If we can just give more color that the 55% levels are kind of a run rate that you see going forward during this year, or you see there could be a further chance of improvement given there's elasticity, you might see higher revenue growth. There could be a bit of shift in the margins as well. And lastly, just a color in terms of your currently capacity to upstream cash from Nigeria. I believe there was a negative equity on the balance sheet that you indicated last year. Has that changed or do you think that will be changed this year and that will, you know, that will mean you can pull more cash to the whole coin? Will that change your, you know, capital allocation policy in terms of, you know, shareholder return? That would be great.

Okay. Thanks, Rohit. I'll try and answer the first, you know, three questions that you asked and then I'll hand over to Kamal to talk about the Nigeria equity question that you raised. Let me first talk about the Nigeria performance. See, this is the first full quarter of the price adjustment, the impact of the price adjustment that we saw in the Nigeria results. The overall, we are pleased with the operating performance of the business. If you look at the demand for our service continues to remain strong in Nigeria, which is reflected in in the overall consumption story that the way it has played out. As you pointed out, there is slight degradation that we have reduction in consumption that we've seen on the voice side. See, what happens is whenever you see a price adjustment of about 40, 50%, there is some amount of tight rating of consumption that we see across categories, which is something that we've seen even in Nigeria. and normally this this titration happens uh you know predominantly towards the uh lower end of the market and you know this is and over a period of time the market normally recovers is is something that we've seen in the past which is this is exactly what we said you know last quarter when we had on the call to say we will need a little more time to be able to understand how the market does you know takes this the overall price adjustment but by and large you know the price adjustments has gone in well to a point on is the consumption moving to you know to VOIP? It's too early for us to draw that conclusion because you know it's only been three months titration happen in any category which is something that we've seen on the data side you know there is we've seen a very heavy you know growth of data consumption per customer which also is contributing to the upgrade to the smartphones that that we are seeing very smart uh you know aggressive upgrade to smartphone that we are seeing in happening in the uh uh in the nigerian market so overall the you know what i would say is it's too early for us to draw conclusion um that the the you know there's a shift to vip um Overall demand remains strong. Nigeria remains a very, very large opportunity. We are actually very encouraged by the first quarter results and overall the way the consumption has played out. We continue to make investments in Nigeria. In addition to the mobile side, the B2B and home broadband remains very, very attractive opportunities for us in Nigeria. Because of the overall stable currency environment and the positive macroeconomic environment as well, we have seen the margin expansion also in Nigeria. The margin expansion in Nigeria in my mind once again is an outcome of effectiveness of our cost optimization initiatives, relative stability in macroeconomic factors as well as flow through from tariff adjustments. And, you know, which is what seemed to have helped us. And that's the way I would say how the Martin story has played out. On the equity question, I will hand over to Kamal to address your question on the Nigeria equity.

Yeah, thanks. Thanks, Adil. See, Nigeria, we have seen the massive devaluation in the last few years. We all are aware of it. which have actually resulted the retained earning of Nigeria to negative. This year, we certainly are not seeing that retained earning to become positive. I don't think possibly, you know, the next probably 18 to 24, before 18 to 24 months, we'll reach that state. It means the upstreaming from Nigeria, yes, would be a challenge. But we operate in the diverse portfolio and diverse profitable portfolio, I would like to say that. And we continue to upstream despite that we've not been able to upstream much amount from Nigeria. Healthy cash from our of course at an Volco level and at this stage we don't see there is any need for changing our capital allocation or we are in a process to change our capital allocation principles. So we maintain our progressive dividend policies and the capital allocation principles which have been communicated earlier. Thank you.

Just one more point. There is another question that you asked on margin expansion going forward. While we do not give any guidance on future, however, we constantly look for opportunities for margin expansion across all our markets, not just only in Nigeria. You know, and as I said, our cost efficiency program continues. There is a lot of rigor there. And this is to be led by both cost efficiencies and strong revenue growth, you know, that we are pursuing across our markets and definitely for Nigeria.

Yeah. And subject to the stabilization of the macroeconomic environment, yes, we should see this is a new baseline for Nigeria margins.

Very clear. Thank you.

Thank you. The next question we have comes from Cesar Tyrus of Bank of America. Please go ahead.

Yes, hi. Thanks for the questions and taking my questions and for the call. I have three, if that's okay. I wanted to ask, the first one would be on FinTech and Nigeria. Can you please get an update on the opportunity that you are seeing in that market for FinTech? Second, I wanted to ask about the margins in Nigeria. Obviously, you've highlighted the... very strong operating leverage and cost cutting, et cetera. Do you think these margins have peaked at this level and can they remain at these levels? Or do you think there was anything exceptional in nature in the margin? And then the third one was really on the CapEx. Can you please explain why it was so low this quarter? I mean, I've seen that you've reiterated for your guidance, but just wanted to understand better why it was so low this quarter. Thank you so much.

Okay, thank you. So let me first give you address your first question on FinTech performance. I'm assuming your question is specific to Nigeria. In Nigeria, it's a well-developed FinTech market related to many other markets. In Nigeria, this is a relatively better developed market. Our priority remains to acquire decent customer base before we start to monetize them. Hence, we continue to focus on expanding customer base and keep on building the very wide ecosystem required for monetization. So, as I said, the first phase is to acquire customers. We have about 1.5 million active customers in Nigeria. And to service these customers in terms of agent network that is required for customer acquisition and for float and cash supply in the market, We have close to about 100,000 active agents at the end of June 2025. In terms of transaction value in constant currency, it has increased 3.6 times YY. Now, in terms of where we are going to make money, the take rate in Nigeria is relatively low, which is 0.4% to 0.5% compared to 0.6% to 0.8% that we have in the other markets. So, but it's a very, very large opportunity and we have many potential customers. What we believe is we have a right to win in this market. We have an existing relationship with about 56, 58 million customers in Nigeria who are happy with our overall service levels and they continue to give us decent revenues. What we are also doing probably because I touched upon to say it's a very, you know, it's a very developed fintech market. We're now building digital use cases for, you know, to participate aggressively in this markets. So whether it is launching a virtual card, whether it's providing other use cases, you know, bill payments, savings bank account. making sure all those needs for you know for the customers are met and they are able to transact on our platform and we meet all their requirements this is predominantly in the urban markets which is where the the other fintech or the banking apps are strong and we want to make sure that our digital capabilities are mark to market and that's where the focus is the second is we leverage our existing relationship with our customers in in the in the rural markets or semi-urban markets and the strength of and leverage the strength of our gta and we seem uh you know we are very very positive about and we see this as a large opportunity and we definitely have a right to win in this market and i keep saying this that nigeria is taking us time but given the strength of this market the size of the opportunity in this market we will you know it's only a matter of time when we when we'll hit the inflation rate and we will see acceleration of growth in nigeria remains a very, very large and attractive opportunity for us. Commenting on the margin expansion in Nigeria, which is very similar to, you know, responses similar to the question that I just answered. It is subject to the macroeconomic stability. We continue, we see that, we continue to chase margin expansion opportunities in Nigeria. There are three pillars to it. One is definitely your cost efficiency program, which is something that we are pursuing. The second is continue to drive very strong revenue growth. And finally, if the overall economic environment remains stable and strong, no reason why we should not see further margin expansion. On your question on CapEx, which is the third question that you asked, our CapEx guideline for the year is $725 to $750 million. And we are absolutely committed to this guidance. And the lower capex in quarter one is largely due to some timing gap. If you look at even in the past, our quarter one capex has been relatively low. It's only a timing gap. We should pick this up, you know, going forward in quarter two, quarter three. But our guidance for the year remains $725 million to $750 million. That's the range.

Thank you so much for your help. Thank you. Okay.

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 Maddy Singh of HSBC. Please go ahead.

Yes, hi. Thanks for taking my question. I have got two questions. First one, just if you could give any update on your mobile money IPO process, where you are, are you on track? if you could share potential timelines for that. By when do you expect to get it listed? And then part of the same question is in terms of potential listing locations, what criteria are you looking at? Whether you have the specific parameters you want to focus on. So that would be quite helpful. And then secondly on the operations performance in Nigeria, of course, you know, the growth was quite strong in first quarter. I wonder how much, do you think the full impact of the price hike is already reflected in the growth or do you see more has to come through in the next quarter or so? So, could we see, you know, further acceleration actually in the revenue trends in Nigeria. And then, finally, on your Francophone performance, would you be able to say with this improved performance, the soft patch we had in Francophone, that is well behind us now, and going forward, we should expect this performance to continue? Thank you.

Thank you very much. Let me first address the mobile money question and I guess there will be, you know, let me give you a full context on the mobile money IPO. See, first of all, you know, if you look at our mobile money business is a very strong business with a very strong track record of 30% growth, you know, over the years. It's a very profitable business and the future opportunity in business is very, very large. So we are very, very positive about this business. It's a great business to have. The right strategic path for this business is the IPO. And this is something that we are absolutely committed towards. And we are working towards the guidance that we have given in the last quarter of listing this business by by middle of uh calendar year 2026 and that's that's what we are working towards at this point in time so from a timeline point of view that's that's what uh you know i would like to say in terms of location we are we are looking at all uh you know continue to evaluate all major listing venues And we will provide further updates to the market regarding the selected venue and the advisors in due course, as in when we have more clarity around this one. But the minority stakeholders are fully engaged in the process. They're aware of it, and we are working towards this IPO. So that's one update that I want to provide on the mobile money. Your second question on Nigeria, where you're saying that the, you know, with the tariff adjustment, has it been fully implemented or not? See, what we've done is we have implemented the maximum cap that has been allowed by the regulator, which is 50%. You know, however, the entire increase will not flow through on revenue growth since the reduction in consumption by the customers will have some impact. This is some reflection that we've seen in the reduction in the voice consumption. Having said that, to answer your question, the entire pricing, whatever was allowed, price adjustment was allowed to us, has been passed on. Going forward, we should continue to see our focus on acquiring more customers, making sure that we deliver great experience to them, Continue to upgrade our customers from 2G phones to 4G phones and then drive consumption. Look at other areas of growth, which is home broadband, B2B. All these are opportunities for Nigeria to continue to drive growth in one very large market and a huge opportunity that we have in Nigeria. On Francophone, which is your other question, is the soft patch. See, what I will say on Francophone is we've seen consistent improvement in our performance in Francophone and it's a very large opportunity. There is no reason for us to go back to the 4-5% growth that we saw in the first quarter of of last year, we continue to make investments. We are building, you know, significant capability to be able to serve our customers better, both in our network as well as in go to market. And we remain very confident of the opportunity that we have in Francophone markets.

Thank you.

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

Thank you very much. First of all, Kamal, the best of luck to you in your new role. I have two questions, please. The first one is, could you advise us of any Spectrum license renewals that we should be anticipating over the next few quarters? And then secondly, my question has to do with home broadband and B2B. To what extent is your work in these adjacent markets helping your financials now? And aside from saying that the opportunity is huge, is there anything you can say to help us think of how much or to what extent this work might help your financials, say, two or three years from now, and which geographies are likely to benefit the most. Thank you.

Thank you. What I will do is let me take your second question first on home broadband and B2B, and then I'll hand over to Kamal to answer your first question on spectrum license renewal. See, if you look at home broadband and B2B, these are both opportunities that we had called out when we refreshed our strategy in the beginning of this last year. And both these opportunities are very large opportunities. Home broadband, for example, is close to about 30 million households and growing opportunity across our footprint. And this opportunity is something that we are working towards. It's a function of two or three things that we need to build. One is our network. And what we are looking at is serving this opportunity through both fixed wireless access or fiber. And this is It's a little bit of a long gestation and that's the work that we are doing right now to making sure that we build capability in our business, make the right investments, identify the right location so that we are able to convert our investments into revenue quickly. So that's from a network and a go-to-market capabilities is something that we are developing right now. The second is on B2B. B2B is another big opportunity. So this opportunity is One is the connectivity, you know, that we sell and that's something that, you know, it's an existing revenue that we have. It's not that we're starting from a zero base. There is a business that we do in B2B. And it's a decent size, well-performing business for us. But the future opportunity is the ICT, you know, solutions that we need to provide. And we are developing those solutions right now. And we will share more color and detail when we start to call out these segments at the case. The third is we see a significant opportunity in the data center, you know, because as, you know, Africa will not be left behind, I'm sure, because the data consumption overall is on the rise. And we see the entire AI wave to further create opportunities in this segment for us. And on the data center side, we've already announced, you know, three data centers. the one we announced about a year ago more than a year ago which was in nigeria at this point in time it's one of the largest uh it's it's the largest data center that is that is being announced in nigeria uh the construction work is is on he announced the second data center which is in kenya and the third data center in brc For both these data centers, the land acquisition is complete and we can move to the next phase of construction. So, as I said, right now, you know, because we do not provide a separate segmental revenue numbers for home broadband and on B2B. In the future, you know, we definitely will start calling, but, you know, at the appropriate time, we'll share more numbers. But we see these as opportunities. We have a question on whether this will be, you know, more towards, you know, few markets or across the footprint. When we look at this opportunity, we see this opportunity across our entire footprint. The size and magnitude of this opportunity will definitely differ between one market and the other, but home broadband is one opportunity we are seeing across the entire footprint. And so is also for B2B. And that's the reason this entire, the capacity and capability that we need to build to service both these segments is an enormous amount of work that we are doing across all the 14 markets. I'll now hand over to Kamal to address your question on the spectrum license renewal.

Yeah, thanks. So, this financial year, nothing has been coming up for renewal in terms of either the spectrum or the license across our 14 countries. I think there's some spectrum in Nigeria which has been coming up for renewals next year. I think mid of next year. So that eventually we have to get it renewed. Having said that, Spectrum is the fuel for this business for the real growth. So we'll keep on looking for strengthening our Spectrum portfolio wherever the need will arise to enhance our data capacities. But in the next two years, I think Nigeria is the oppo where the license or the Spectrum is going to be renewed. And after two years, Kenya has also come up for the renewals for the license at Spectrum.

Thank you both very much.

Thank you, Sal. The next question we have comes from Tracy of SBG Securities. Please go ahead. Tracy, your line is live. Apologies. It seems that we can't hear Tracy. The next question we have comes from Lynette Murungi of APSA. Please go ahead.

Thank you gentlemen and congratulations on the strong set of performance. Two questions from me please. First, could you please give a breakdown of the tariff increment in Nigeria? Have you fully implemented the full 50% increment or will you stagger the increments over the next three quarters in FY25? And the second question is tied to the partnership with Starlink. Could you please give more color on this? Will Starlink have access to Airtel Africa's data centers in all the nine markets it has licenses in? And how will the revenue generation structure look like for Airtel Africa? Thank you.

Super. Thank you very much for those questions. First, let me just answer your first question on Nigeria pricing. As I said before, we've implemented the full extent of price adjustment that we were offered in Nigeria. in terms of impact at a console level, at a group level, Nigeria pricing would have contributed to circa 3.5% of the overall growth in the business. So that's one thing on Nigeria pricing. On your second question on Starlink. So on Starlink, our arrangement with Starlink is broadly on three areas. First and foremost, Starlink has received license to operate in nine out of the 14 geographies that we operate in. And our agreement with Starlink is around three areas. The first is to sell connectivity to our B2B customers. And that's something that, you know, we are going to start very, very soon. The second is Starlink will, you know, this entire agreement that we have with Starlink will help us in in our backhauling or transmission capabilities, especially when we have to connect our sites in remote locations or expand network coverage in remote location. And that's a huge benefit that we get out of this arrangement that we have with Starlink. And finally, on our Connectivity when it comes to international gateways across borders to build redundancy to be able to service our customers better is the third benefit that we derive out of this arrangement that we had with Starlink. So therefore, what are we achieving with Starlink is primarily three or four things. First and foremost is speed to market to expand our coverage and that should benefit us at an overall level. Improve customer experience because we will build resilient networks wherever there is redundancy is not adequate or we do not have enough redundancy. And finally is cost efficiency because fiber becomes very, very expensive when it comes to remote areas. So, these are some of the benefits that come out of the Starlink agreement that we have and those are some of the problems that we are trying to solve with this and we will go in market execution very soon. Now coming to your question on will Starlink will have access to our data center that will be a revenue line for us and we are talking to Starlink wherever they need capacity wherever they need our help that's something that these are conversations which are still on but at this point in time will not be able to give any further you know you know guidance or color to this but this is an opportunity that we continue to discuss.

Awesome, thank you.

Thank you. The next question we have comes from Samuel Gabedo of Cardinal Stone Securities. Please go ahead.

Okay, can you guys hear me? Hello? Yes. Okay, all right. Thank you for this opportunity to ask questions. I'm just going to be asking just two, if you permit me. The first one would be on your 4G population coverage. Based on your Q1 numbers, it currently stands at 74.7%. So I'm just trying to ask for what your medium target is and how we should think about any form of incremental returns on future site rollouts. The next one will now be with the NCC's new NI verification framework, which is now active. Has there been any form of customer friction or churn risk? Is it going to materially affect onboarding or any form of compliance costs? Those are my questions.

I'm assuming the second question is with respect to Nigeria.

Yes, yes, it is.

All right. So, let me, you know, address your first question, which is on 4G coverage. See, you called out our, you know, 4G coverage at about 74.7, 75%. Our overall, you know, so if you look at our overall coverage, sorry, overall sites, almost all of our sites today are 4G sites. And going forward, you know, that remains our focus to say, you know, we have, as we expand our coverage, we have not only a voice, but also data coverage. And this is the approach that we've taken as we expand our network. And annually we deploy anywhere between 2,500 to 3,000 sites, which is what our historical average is. And that continues to remain. Now, some of that will go into coverage expansion. Some of those sites will go into you know, infill site which is plugging either the coverage holes or capacity requirements in our existing network. So, but, you know, every site that goes in today goes with the 4G sites, with the 4G coverage, so that remains our focus to drive both voice as well as data revenue and service the needs of our customers for both voice and data. Coming to your question on Nigeria NIM requirements that we have. See, NIMC has instructed all MNOs to migrate their customers to new authentication system and have stopped the new customer registration on the old system. And this is something that we are also following. And the way we see it is is actually it is, you know, because it's coming from NCC or it's coming from NINCI, they're only trying to make the process even smoother for onboarding the customers and make it more robust. Because if you look at the recent past, almost all the actions that have been taken by NCC have been in the direction to make sure that our quality of customer acquisition is foolproof, and it's not only for data but entire industry acquires quality customers and onboards them smoothly so we are following that you know um one is we know that the the underlying intent and what the dns is trying to achieve is is this we are we are in line with you know whatever the instructions that that we have um we have received from from lindsay and whatever would be the impact which i don't think should be material phase, but whatever be the impact, the impact is not just specific to Airtel, but it is applicable for the entire industry as well. Right now, we are in the process of discussing with the regulation to complete the migration process and you know, we may have some teething issues, but I do not think it should be material and therefore, we should be able to continue to onboard and acquire customers as we have done in the past.

Thank you very much. Our final question comes from Tracy Coonew of SBG Securities. Please go ahead.

Thank you very much. I have three questions. Maybe I'll just start with a follow-up to the answer on NEMC and new status on upgrading the customer registration process. So did that by any chance affect the level of subscription acquisition you saw in Nigeria? Because there was an odd 200k to 300k customers which seemed slow for the quarter in terms of acquisition. So what was the driver behind that? And then second, an update on East Africa EBITDA margins, if you will. Why are we still seeing some weakness in terms of EBITDA margin performance and when do you expect that to resolve? And my last question is on the Momo margins contraction as well. It was written in the release that there's been a higher spend in marketing. I just wanted to understand if that was primarily towards the Nigeria OpCo or it was for across the Airtel money strategy across all OpCos. Thanks.

Thank you very much. So first, let me answer your question on Nigeria NIMSY, you know, question that you asked. As we move to the, you know, to the new system or as NIMSY moves to the new system, there was a pause that was imposed by the regulator on acquisition towards the end of June. And as we speak, we are in the process of restarting the acquisitions. And this is, as I said, this is an impact on the entire industry, not only specific to Airtel. So the impact of this, as I said, this is being done with the intent of making sure that our quality of acquisition is even more stronger and onboarding process is even more smoother. Once the system is rolled out is when we will know if there is any impact on the overall customer acquisition. And whatever will be the impact, it will be an impact to the overall industry and not specific to Airtel. But we should be able to resolve this very soon. This was for about 20 days this acquisition got impacted. Coming to your question on EBITDA margin in East Africa. In corner 126, East Africa mobile services EBITDA margin declined by 55 basis points YOY and 73 basis points in constant currency. This is primarily impacted by rising fuel prices and poor grid availability in some of our markets reduced in resulting into increased fuel consumption in few of our markets coupled with some inflationary pressures. Other than that, you know, there is nothing because I'm sure You've read there is, you know, Zambia has experienced one of the most severe droughts in, you know, over the last about a year or so. That's leading to higher fuel consumption. That seems to be, that's impacted the overall margin progression. But if you look at the overall margin remains still pretty healthy in East Africa. Coming to your question on margins on annual money. If you look at the margins on it, money are very, very healthy. There is some amount, this margin that you have remained stable is primarily because we've stepped up our growth spends, which is what you also alluded to, are these marketing spends. So we have stepped up our growth spends because it's healthy margin business, significant opportunity for us to acquire customers. and then upgrade them to different use cases. That's where the focus is. And that's the reason we're seeing, you know, a lower margin progression on our natal money.

Thank you very much.

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

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