Indian telco giant Bharti Airtel has changed its top management in Kenya amid uncertainties over the company’s future in key African markets. The company is in the process of reviewing its strategy for profitability on the continent.

Bharti has picked its Bangladesh chief executive Prasanta Das Sarma to head the Kenyan office following the exit of Adil El Youssefi, whose three-year stint had not changed the unit’s profitability.

Airtel Africa managing director and chief executive Raghunath Mandava said in a statement that the telco was counting on Mr Sarma’s experience in Airtel Bangladesh to change its “sagging fortunes.”

“All the steps taken recently with regard to human resources and infrastructure have been geared towards readying the organisation to grow efficiently and sustainably in the medium to long term. The company remains committed to competing in various markets,” said Mr Mandava, perhaps to dispel speculation that the telco could exit Africa altogether.

Low tariffs

Bharti Airtel has admitted that its Africa strategy hinged on low tariffs in pursuit of volumes has not yielded much in terms of market share. A fortnight ago, at the World Economic Forum in Davos, Bharti Airtel’s chairman, Sunil Bharti Mittal, said that they planned to “rationalise” their operations on the continent through mergers and acquisitions.

“Our operations in the 15 African countries haven’t been a successful experiment and we now need a change of strategy. We have already taken in a $1 billion out of sale of two countries, $2 billion out of towers. This means that $3 billion has already come back, some more rationalisation may be possible,” Mr Mittal told Bloomberg.

Bharti’s entry into the continent seven years ago was through a $10.7 billion buyout of the Kuwait-based Zain Telecom’s assets, and so far the operator has only managed to recoup $3 billion from tower sales in nine countries including Kenya and Rwanda as well as exits in Sierra Leone and Burkina Faso.

The purchase of Zain was financed through a debt of $8.5 billion and $2.2 billion from internal sources. Since then, the company has injected $5 billion into the operation.

The firm received $2 billion from the sale of its 8,300 towers in the nine African countries while the agreement to sell towers in four other countries lapsed.

This was part of its 14,000 towers on the continent, with the proceeds used in settling debts that stood at $13 billion. It has since emerged that the giant will in the next two months be exiting the tower business altogether, divesting from its tower company Bharti Infratel.

The sale of the towers was one of the reasons the company’s losses in Africa narrowed to $91 million in September last year, compared with $170 million during the same period in 2015, from revenues of $3.4 billion, which was a one per cent increase.

“We have constituted a committee to look into this tower divestment issue and a decision will be taken within a month. We have received offers, we don’t know whether we want to sell a minority shareholding or sell the controlling stake. The committee will go through the entire proposition and make a recommendation. We will then sit down and decide on the issue,” Mr Mittal said.

Market exit

It is unclear how the regional units will be affected by the divestments, which have already seen the telecommunication giant exit several markets in West Africa, either through sell-offs or mergers as it seeks to stay afloat and reduce its debt burden.

The appointment of Airtel veteran Mr Sarma is quite telling too.

“He has handled key assignments as well as business leadership roles. I am confident that under his leadership, our plans will gather further momentum,” Mr Mandava said.

Last year, Bharti quit Burkina Faso and Sierra Leone for $900 million and is in talks for other market exits. Plans are already underway to exit Chad and Congo- Brazzaville through a sale of its assets, and there are already buyout talks for its Ghana operations.

From its 2015 financial results, the four countries contributed 15 per cent to its revenue on the continent, with the operator holding the top two positions in these countries.

The Kenyan unit has seen a continued change in its top leadership with Mr Youssefi having only served three years. He replaced Shivan Bhargava in 2014.

Last September, Mr Youssefi stirred the local telecoms sector when he said Bharti could exit the Kenyan market if new regulations were not passed to stop what he termed dominance by market leader, Safaricom.