Airtel Malawi still swinging despite taking blows in stressed-out economy
Airtel’s Malawi operation is under pressure as the Southern African country’s economy continues to feel the blows of rising inflation, forex shortage and a volatile currency.
Malawi’s year-on-year inflation rate for March accelerated to 14.1% compared to 13% in the previous month. On Wednesday, Airtel Malawi said it “sustained forex loss of K5,626 million (US$6.8-million) on the back of the Kwacha weakening against major foreign currencies” during the full year period to the end of 2021.
In 2020, the company said loss attributed to exchange rate amounted to K3,560 million (about US$4.2 -million).
“The economy and company are exposed to the continued impact of COVID-19, Kwacha depreciation and scarcity of foreign currency,” it said.
The situation has forced Airtel Malawi to “focus on investing more and growing customers and revenue followed by containing cost and diversifying currency sourcing to mitigate” the risks and exposures to such losses.
Despite the challenges, the telco still raised revenues for the period by 19.5% on the back of a 22% surge in income from voice, and data revenue increased by 18% during the period under review.
The stronger revenue out turn was as a result of “the growth of our customer base which was up by 23.8%” to 6.25 million. Airtel Malawi however believes there is a bigger “opportunity for growth in Malawi.
The company stated, “The telecommunication sector will continue to benefit from population growth and need for increased connectivity. We expect to continue to execute our strategy focused on increasing mobile penetration in Malawi through investment in rural unserved markets, as well as digitise the economy by increasing penetration of data usage.”
During the period under review, Airtel Malawi extended the maturity of about US$40-million worth in external borrowings, which was due in September 2021, by a further 24 months.
The company also expanded its network with the roll out of an additional 132 sites, and concluded allotment of new numbering series.