Competition Constricts Airtel Zambia’s Interim Earnings 14%
Airtel Bharti earnings shrunk 14% to ZMW93.5million on account of ferocious competition. This was revealed in the telecoms companies interim results to 30 June 2017. A year ago same time Airtel had posted ZMW109.6million. The telcos subscriber base increased by 5.05% to 4.91million.
The company’s revenues slowed 5.79% to ZMW966million from ZMW1, 025.4million as consumers were spoilt for choice on data and mobile service provision from competitors such as MTN, Hai and Vodafone. However the company was able to tame its finance costs to ZMW30million a 78% reduction from ZMW137.3million.
Being a listed entity on Zambia’s bourse the Lusaka Stock Exchange – LuSE, Airtel (ATEL) earnings per share is a key variable for investors. The entities EPS plummeted to ZMW0.9 from ZMW1.05 per share a 14.8%.
The telecommunications industry is undergoing reforms currently that include a new converged licensing framework approved by the Zambian Parliament. Barriers to entry have been removed by narrowing license types to just two namely service and network. With this the industry is poised to see more entrants that will heighten completion and compress data costs. The Zambia Information and Communications Technology Authority – ZICTA recently approved a 4th and 5th license for mobile operators wishing to penetrate the Zambian market. The Ministry of Communication can be lauded for making attempts to transform market structures from oligopolistic to perfectly competitive.