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 picking star then zero. Please note that this call is being recorded. I would now like to turn the conference over to Sunil Talda. 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 Dhuba, who, as you know, has taken over following JD'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 our 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 modeling. I believe the scale of positivity 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%. Currently, 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 opportunities 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 HL SpamAlert, It's an AI-powered solution which uses technology to protect our customers from the risk of fraud and drives increased trust. We have 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 population. This focused 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, which was 24.9% growth in constant currency. This was an acceleration from 23.2% growth in quarter 4 as the full impact of Paris existence then 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 currency, this transferred 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, order one revenues increased 23.8% in country 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 SIM 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 12.5%. Web traffic across our network continues to see double-digit growth, supporting overall VoIP revenue growth of almost 40% in constant currency. However, data continues to be a service where demand remains substantial. Data traffic continues to increase, growing 47% as data usage per customer increased 26%. to 7.8 GB per month. However, smartphone usage per customer reached 9.6 GB per month, which highlights the overall scale of the data opportunity as smartphone penetration, which remains low at 45.9%, remains a substantial support for the growth overall. Overall data revenues increased approximately 38% in constant currency. We remain confident that no 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 onto a very significant growth engine for us, the mobile money business. The mobile money growth story is also very compelling. And this product's performance is no exception. In constant currency, revenue growth also accelerated to 30.3%. with 31% growth in reported currency. The unbind 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 continuous transaction value on the platform, which reached $162 billion on an annualized value. A growth of 35% and health sustain continued as the growth. Now coming to overall EBITDA performance, our cost efficiency program, which we launched a year ago, continues to deliver results. In quarter 1, we reported EBITDA margins of 48% and 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, continuous 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 had returned to very early levels to 55.6% with CIFAR EBITDA margins remaining strong at 51.9%. The strong rebound in growth in the phytoform region has also contributed to an improvement in EBITDA margins to 44.2% in the quarter. Within 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 earnings 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 am pleased to say has been very successful with 95% of our off-court debt, excluding these liabilities. now based in local currency. Leverage for the group of 2.2x improved from 2.3x at the end of March, but has increased over the last year, primarily as a result of the extension of our Tower Deals agreements with ADC and IHX, which added approximately $1.3 billion of debt onto our balance sheet. However, on a least adjusted basis, leverage has remained flat at 0.9x 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 recreate 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 understand our attractive shareholder return policy. In May, we launched the second tranche of our share buyback. This will return up to $65 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 product's performance has resulted in strong growth trends in both the operational KPIs, but also in financial terms. Very briefly, I thought it was 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 accessible 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. The unique sin penetration between 40 to 50% and data voice usage remaining low in a global context the ability to sustain industries 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 growth. With over 90% of transactions in cash and 65-70% of add-ons unbanked, the financial services proposition we offer to a young, digitally savvy population is still unparalleled and will be another key attribute of our growth propagation. 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 cup of experience at the center of everything we do. Without this and the sustained network investments to offer these services, the ability to capture growth will be compromised. It is this strategy that will be fundamental to this success. Importantly, in order to ensure sustained value creation for all stakeholders and to be able to achieve these strategic objectives, I am 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 this, I am joined by Kamal, our operator. Now, I have the word 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 1, now. If you decide to withdraw the question, please press star and then 2. Again, to ask a question, please press star and then 1, now. The first question we have comes from Puneesh 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 road being recorded. So could you please provide some color on what factors that contributed to this alone, which countries in the region are dragging this? And also, how do you see the momentum for 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 price stability and others? So, also, how do you see the margin development for rest of the year? Thank you.

Thank you, Vinesh. Let me respond to our first question. So, this is on Francophone. So, if you look at... you know, Francophone are a base growth, you know, it's the fastest growing, you know, across all our three market segments. So, we 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, you know, It's funny because there are two reasons. One is a very clear focus of, you know, the things that are there on a strategy and therefore the execution on the execution of delivering great customers 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 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 are 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, I think that about As I said, 40% to 50%, that's the 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 Francophone and we are seeing this and that is the reason we are seeing upgrades 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, you know, quality of execution that we have, and we continue to make investments behind our growth opportunity, we remain very, very confident of this relationship continuing in Singapore markets. Coming to your question on EBITDA, you know, last year in quarter one, they've launched our cost efficiency program and over the years this cost efficiency program has consistently delivered results and we have seen 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 are seeing with this margin improvement. The first is very clearly the cost efficiency program and the focus on eliminating waste. This is something that we have 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-down performance, we're seeing the overall flow through that's contributing to lead to the margin improvement in the overall case. And it's very, very difficult to distinguish the impact of the macroeconomic stability and the other factors. But the way we see it, it's a combination of these three factors. Our cost efficiency program, which continues with even more rigor. The second is the macroeconomic stability and then continue progression on our overall top line growth in response period.

Thank you. Thank you, Sam.

The next question we have comes from Rohit Modi of CICI. Please go ahead.

Thank you for the opportunity and congratulations on a great set of results. Three from my side. Of course, we in Nigeria on the last two cities, we have seen the voice usage per customer has declined this quarter. Cellular growth has declined over quarters, but this quarter it has actually declined as a negative growth. and but on the other hand data actually grew significantly compared to last quarter if you're thinking with a bit more color what you know if it's like the elasticity that is impacting the voice or it's the shift from you know to due to vip and higher smartphone penetration that's moving we have a bit more color on the voice elasticity there Taking time on margins particularly on Nigeria and you clearly have a bit of a benefit coming from the tariffs. If you can just give more colour 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 is elasticity you might see higher revenue growth and there could be a bit of shift in the margins as well. and and lastly um just a color in terms of uh your uh currently your uh capacity to upstream cash from nigeria uh i believe there was a negative of equity on the balance sheet that you that you did to indicate it last year has that changed or do you think that could be changed this year and that was you know that would mean you can pull more uh cash to the whole coin will that change your uh you know capital allocation policy uh in terms of you know shoulder return that's okay

Okay.

I'll try and answer the first three questions that you ask 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. This is the first full quarter of the price adjustment, the impact of the price adjustment that we saw in the Nigeria results. 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, this is reflected in the overall consumption story, the way that it's played out. As you pointed out, there is slight degradation that we are watching in consumption that we've seen on the right side. See, what happens is whenever you see a price adjustment of demand, There is some amount of tight rating of consumption that we see across categories. This is something that we've seen even in Nigeria. And normally, this titration happens predominantly to the lower end of the market. And over a period of time, the market normally recovers. It's something that we've seen in the past, which is exactly what we said last quarter when we were on the call to say, We will need a little more time to be able to understand how the market has, you know, taken the overall price adjustment. But by and large, you know, the price adjustment has gone in well. To your point on is the consumption moving to, you know, to DOIP, it's too early for us to draw that conclusion because, you know, it's only been three months. Pricing happened 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 we are seeing, very smart, you know, aggressive upgrade to smartphones that we are seeing happening in the Nigerian market. So overall, you know, what I would say is it's too early for us to draw conclusions that we, you know, there's a shift to VR DOIP. 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. The companies who 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've seen the margin expansion of, you know, 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 growth from direct existence. And, you know, this is what he has told us. And that's the way I would say how the margin story has played out. On the equity question, I will hand over to Kamal to address your question on the Nigeria equity.

Thanks. See, Nigeria, we have seen the massive devaluation in the last few years. We all are aware of it, which has actually resulted in the return numbing of Nigeria to negatives. This year, we certainly are not seeing that return 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, could be a challenge, but we operate in a 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 opcos at an holdco 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 have asked on margin expansion going forward. While we do not give any guidance on features, However, he constantly looks for opportunities for margin expansion across all of our markets, not just only in Nigeria. You know, as I said, our cost efficiency program continues. There is a dollar figure there, and this is to be led by both cost efficiencies and strong revenue growth, you know, that we are pursuing across the markets. And definitely for Nigeria.

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

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, etc. Do you think these margins have peaked at this level and can they remain at this level? Or do you think there was anything exceptional in nature in the margin? And 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 a few of your guidance, but just wanted to understand better why it was so low this quarter. Thank you so much.

Thank you. 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 is to require customers. We have about 1.5 million active customers, you know, in Nigeria. In terms and to service each customer in terms of agent network that is required for customer acquisition and for, you know, flow contact supply in the market, we have close to about 100,000 active agents, you know, at the 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 had in the other markets. 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, because I touched upon this earlier, it's a well-developed fintech market. We are now building digital use cases for you know, to participate effectively in this market. So whether it is launching a virtual card, whether it's providing other use cases, you know, bill payments, savings bank accounts, making sure all those leads 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 other fintech or the banking apps are strong and we want to make sure and that's where the focus is. The second is, we leverage our existing relationship with our customers in the rural markets, the semi-urban markets, and leverage the strength of our GTA. And we think, 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 a sign, 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 hit the inflation rate and we will see acceleration of growth in Nigeria. It remains a very, very large and instructive 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, is subject to macroeconomic, you know, stability. We continue to we see that we continue to chase margin expansion opportunities in Nigeria. There are three pillars to it. One is definitely your, you know, our cost efficiency program, which is something that we are pursuing. The second is countries who drive very strong revenue growth. And finally, you know, if the overall economic environment remains stable and strong, no reason why we should not see further margin expansion. On your question on the topic, which is the third question that you asked. Our capex guidelines for the year remains, is $725 to $750 million. And now we are absolutely committed to overall, you know, to this guidance. And the low capex in quarter one is largely due to some timing gaps. If you look back, even in the past, our quarter one capex has been relatively low. It's only a timing gap. We should pick this up in, you know, going forward in quarter two, quarter three. But our guidance for the year

Thank you so much for your help. 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 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 an update on your mobile money IPO process, where you are, are you on track? If you could share potential clients 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 a specific you know, 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 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 touch you 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 let me give you a full context on the mobile money at ICO. First of all, if you look at our mobile money business, it's a very strong business with a very strong track record of 30% growth 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 middle of calendar year 2026. And that's what we are working towards at this point in time. So from a timeline point of view, that's what I would like to say. In terms of location, we are looking at all major listing venues and even provide further updates regarding the selected venue and the advisors in due course as and when we have more clarity around this one. But the minority stakeholders are fully engaged in the process. we are aware of it and we are working towards this IPO. So that's one update that I want to provide on the mobile money. The second question on Nigeria, you're saying that the direct adjustment hasn't been fully implemented or not. 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 the regular since the reduction in consumption by the customers will have some impact. This is some recession that we've seen in the reduction in the void consumption. Having said that, so, to answer your question, the entire pricing, whatever was allowed, the 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 smooth opportunity that we have in Nigeria. on Francophone, which is your other question, you know, is the, you know, the soft patch. What I will say on, you know, on Francophone is we've seen consistent improvement in our performance in Francophone and we remain, it's a very large opportunity. There is no reason for, you know, for us to go back to, you know, kind of The 4-5% growth that we saw in the first quarter 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 front of all markets.

Thank you. Thank you.

The next question we have comes from John Charitas 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 licensing rules 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 the 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 the second question first on home broadband and and then I'll hand over to Kamal to answer your first question on spectrum license renewal. If you look at home broadband and B2B, these are both opportunities that we have 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 a 30 million households and growing opportunity across the footprint. And this opportunity is 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 to both, you know, fix wireless access or, you know, fiber. And this is a little bit of a long decision 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 locations, so that we are able to convert our investments into revenue quickly. So that's from a network and a global market capability is something that we are developing right now. The second is on B2B. B2B is another big opportunity. This opportunity is, one is the connectivity 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. the business that we do in B2B. And it's a decent-sized, 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 things separately. The third is we see a significant opportunity in the data center, you know, because as Africa will not be left behind, I'm sure, because A, 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 three data centers. The one we announced about a year ago, more than a year ago, was in Nigeria. At this point in time, it's one of the largest, the largest data center that is being announced in Nigeria. The construction work is on. We announced the second data center, which is in Kenya, and the third data center in ERC. 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 separate segmental revenue numbers for home broadband and among B2Bs, In the future, you know, we definitely will start calling, but at the appropriate time and we will share more numbers. But we see these as opportunities. To your question on whether this will be more towards, you know, few markets or across the footprint, when you look at this opportunity, we see this opportunity across our entire footprint. The size and latitude of this opportunity will definitely differ between one market and the other. But home-bought bank is one opportunity we are seeing across the entire footprint. And so is also for B2B. And that's where even 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 our whole 14 markets. I'll now hand over to Kamal to address your question on the spectrum of the 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 1400. 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 world. We'll keep on looking for extending our spectrum portfolio wherever the needs will arise to enhance our data capacities. But in the next two years, I think Nigeria is the output where the spectrum is going to be renewed. And after two years, Kenya will also come up for the renewal of the license spectrum.

Thank you both very much.

Thank you, Sal. The next question we have comes from Tracey Cozunio of SBG Securities. Please go ahead.

Tracey, your line is live. Apologies.

They seem to have been trying to tell Tracey. The next question we have comes from Lynette Marie of . Please go ahead.

Thank you, gentlemen, and congratulations on the strong set of performance. Two questions for me, please. First, could you please give a breakdown of the tariff increment in Nigeria? Have you fully incremented 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.

Thank you very much for those questions. First question on Nigeria pricing, as I said before, Dave implemented the full extent of price adjustment that he was offered in Nigeria. In terms of impact at a control level, at a group level, Nigeria pricing would have contributed to the overall growth in the business. So that's one thing on Nigeria pricing. On your second question on Starlink. So on Starlink, you know, our engagement with Starlink is broadly on three areas. First and foremost, Starlink has license, 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 send connectivity to our B2B customers. And that's something that we are going to start very, very soon. The second is, this entire agreement that we have with Starlink will help us in in our backhauling of transmission, you know, capabilities, especially when we have to connect our sites in remote locations or expand network coverage in remote locations. And that's a huge, you know, benefit that we get out of this arrangement that we have with Starlink. And finally, you know, on our, you know, connectivity when it comes to international gateways across borders to build, you know, redundancy to be able to service our customers better. is the third benefit that we derive out of this, you know, 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 help benefit us at an overall level. Improve customer experience because we will build resilient networks, you know, 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 this, 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, we will not be able to give further 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, alright. Thank you for the opportunity to ask questions. I'm just going to be asking just to, if you'll 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. Next one will now be with the NCC's new NI verification framework, which is now active. right has there been any form of customer friction or you know some risk and you know is it going to be material when uh if it is material aspect uh onboarding or any form of compliance cost those are my questions uh 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. You called out our 4G coverage at about 74.7, 75%. Our overall, you know, if you look at our overall coverage, sorry, overall size, 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, Intel sites. This is plugging either the coverage holes all capacity requirements in our existing network. So, but, you know, every site that we have chosen today goes with a 4G site, with a 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 Nigerian NIM requirements that we have, See, MNC has instructed all LNOs to migrate their customers to new authentication system and have started their new customer registration on the old system, right? 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 MNC, they are 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 NCCD have been in the direction to make sure that our quality of customer acquisition is full-proof and it's not only for Airtel but entire industry acquires quality customers and onboards them smoothly. So, we are following that, you know, one is We know that the underlying intent and what the entity is trying to achieve is this. We are in line with, you know, whatever the instructions that we have received from the entity. And whatever the impact, which I don't think should be material, but the time will tell as the system is in the implementation phase. But whatever the impact, the impact is not just specific to it, but it is applicable for the entire industry as well. Right now, we are in the process of discussing with the regulator to complete the migration process. And, you know, he may have some hidden issues, but I don't think it should be materialized. 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 Kamunu of SBC Securities. Please go ahead.

Thank you very much. I have two questions. Maybe I'll just start with a follow-up to the answer on NEMC and new status on not breaking the customer registration process. So did that, by any chance, affect the level of subscription acquisition in Nigeria? Because there was an odd 200K to 300K customers, which seems slow for the quoted terms of acquisition. So what is 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 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. Do you want to understand if that was primarily towards the Nigeria OSCO or which was for across the actual money strategy across all of course.

Thank you. Thank you very much. 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 acquisition. And this is, as I said, this can impact on the entire industry, not only specific to Airtel. So, the impact of this, as I said, you know, 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 you will know if there is any impact on the overall customer acquisition. And whatever will be the impact, this will be an impact to, you know, to the overall industry and much specific to AHS. 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 quarter 1, 26, East Africa Mobile Services EBITDA margin declined by 55 basis points YOY and 73 basis points in constant currency interest, primarily impacted by rising fuel prices. and poor grid availability in some of our markets reduced in, resulting in 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 this, you know, Zambia has experienced one of the most severe droughts in, you know, over the last 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 annual money are very, very healthy. You know, there is in the summer months, this margin is primarily because we stepped up our growth spend, you know, which is what he also alluded to, are these marketing spend. So, we stepped up our growth spend because if there's a margin, there's no 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 market progression on Asian 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.