Going forward, telecom companies in Kenya must compensate customers whose services have been disrupted by their poor service delivery. The Communications Authority of Kenya (CA) has issued draft new regulations requiring mobile phone operators Safaricom, Airtel and Telkom Kenya to compensate businesses and customers when network outages disrupt voice, data and text services. The draft regulations have been published for public comment and seek to compel the telecommunications providers to either pay or offer credit equivalent to the time users are without voice and SMS services.
What Does The New Regulation Say?
The new rules are aimed at shielding millions of mobile phone clients from poor services related to network outages, including lack of internet connections.
The regulator is permitted by law to sanction any telecommunications company that inconveniences customers through service interruptions as a result of omission on its part.
An operator found in breach risks a fine of up to 0.2 percent of its revenues, which could run into hundreds of millions of shillings. Now, the regulator wants to include compensation to clients for mobile phone outages.
Kenya telcos compensate customers Kenya telcos compensate customers
Licensees must develop and implement an outage credit policy in situations where service is unavailable due to system failure and not as a result of scheduled and publicised maintenance, emergency or natural disaster, say the draft rules.
The policy will compensate subscribers or issue credit equivalent to usage over a similar period that outage lasted and compensate customers for each day that service has been unavailable.
Compensation will be based on how much the operator charges per minute for calls and data.
In 2019, Kenya had 55.2 million mobile phone subscribers who made 58.78 billion minutes of calls, up from 39.19 billion in 2015. Scheduled outages and those caused by factors beyond the control of an operator, technically known as force majeure, usually do not attract sanctions
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
This could be a major victory of 2019 for Nigerian startups. For the second time in two years, Interswitch is signaling it is now ready to open its share portfolio up for public subscription. The unicorn startup is riding on the wings of the recent relatively successful listing by MTN Nigeria and Airtel Africa. This is seventeen years down the line for the digital payment solution.
Here Is What You Need To Know And How To Get Ready For Interswitch’s Shares
This could be a reality this time. Interswitch has already hired JPMorgan, Citigroup, Standard Bank for the share sale.
This listing could value Helios’s Interswitch at up to $1.5 billion
The listing would happen on the Nigerian Stock Exchange at the same time it is happening on the London Stock Exchange.
JPMorgan Chase & Co., Citigroup Inc., and Standard Bank Group Ltd. are among the firms working on an initial public offering, which may value the financial technology company at $1.3 billion to $1.5 billion, according to reliable sources.
Interswitch had earlier shelved its plans to list in 2016 after the price of crude oil fell dramatically, causing a contraction in Nigeria’s economy.
This Listing Is Drawing An Unclear Path For Africa’s Digital Startups
Just recall Fawry, the Egyptian startup poking at IPO. The startup was acquired by Helios Investment Partners halfway into its journey. Interswitch, originally founded by Mitchell Elegbe also sealed the same fate in 2011 when Helios Investment Partners, a private equity firm dedicated to making growth investments across Africa bit two-third hard into the startup and subsequently acquired a majority stake in the payment startup. Since then, Helios Investment has become Interswitch’s largest shareholder.
This would, of course, leave a big question on the longevity of African-led startups, and whether the popular exit strategy most startups in Africa are resorting is not acquisition. Helios is among several private funds that specialize in investing in African assets as the economic recovery taking place across the continent bolsters investor sentiment and infrastructure plans.
A Look At Interswitch
Interswitch facilitates the exchange of value between service providers by providing a secure shared payment infrastructure and integrated message broker solutions for financial transactions, eCommerce, telecommunications value-added services, eBilling, payment collections, and disbursements. The company developed and administers Verve, the leading card scheme in Nigeria.
The displayed data on popular payment methods in stores, restaurants and other points of sale shows results of the Statista Global Consumer Survey conducted in Nigeria in 2017.
The Verve card, which is currently issued by banks in Nigeria, is the first and only chip and PIN card accepted across multiple payment channels including ATMs, Point of Sale (PoS) terminals, online, mobile and at banks, and enjoys the largest range of value-added services.
The company has been at the forefront of the development and growth of the e-payment sector in Nigeria, which is evidenced by its unique position of being the only switching and processing company connected to all banks in the country as well as to over 10,000 ATMs and 11,000 PoS terminals.
Aside from this, the company is the leading processor for MasterCard and the market leader in merchant acquiring/PoS, a segment that is still emerging and has the potential for tremendous growth in Nigeria.
The completion of the switchover from magnetic strip cards to chip and PIN cards in 2010, is expected to further accelerate growth and usage of e-payments across the country. Nigeria is the first country in Africa to have completed this migration and is one of the few countries in the world to have completed the migration under a year.
Interswitch’s dual listing in the U.K. and Nigeria is merely repeating what Airtel Africa Plc, the wireless carrier and a subsidiary of Indian parent Bharti Airtel Ltd did recently by simultaneously listing on the London and Nigerian Stock Exchange.
Recall that Jumia Technologies AG, dubbed the Amazon of Africa, listed in New York earlier this year, while Dubai-based payments firm Network International Holdings Plc went public in London. All of these recent events may not be unconnected with the recent invitation by the London Stock Exchange to investors around the world, particularly in Africa to come to invest in the Exchange.
Officials from the London Stock Exchange recently completed a roadshow in a bid to boost the LSE’s 115 African listings. The exchange is banking on partnerships with African exchanges, including those in Nigeria and Kenya, for dual listings, according to Director of Emerging Markets and International Markets Ibukun Adebayo.
“If a company has an international strategic growth plan, then the LSE is a perfect vehicle for the company to come and list,” Adebayo said Tuesday in an interview in Nairobi. “If the company is purely domestic and it needs to raise money in the domestic market and increase the number of investors available to it, then the LSE can help work with local partners.”
Firms already included in the LSE’s listing of Companies to Inspire Africa, which the exchange describes as the continent’s “most inspirational and dynamic private, high-growth companies are:
South Africa: Ad Dynamo International, Coega Dairy, Compuscan
Nigeria: Afriland Properties, Alpha Mead Group, ARM Life
Ivory Coast: Azalai Hotel Abidjan, Cipharm SA, Clinique Procréa, Agriex Côte d’Ivoire
Angola: Aldeia Nova, Angola Energy Greentech, Kora Angola, WEZA
Egypt: Cairo Three A, Carbon Holdings, Eagle Chemical Group, Sambo Metals
Morocco: 10 Rajeb, Bricoma, Damandis Maroc, Ama Detergent, Medafrica Systems
There are 360 companies from 32 different countries across the continent, boasting an impressive average compound annual growth rate of 46 percent, up from 16 percent last year, according to Global Finance.
It says on average, each firm employs over 350 people, with an average compound annual employee growth rate of 25 percent.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Barring any last minute changes, Airtel Africa Plc is now set to list its shares on the floor of the Nigerian Stock Exchange today, Tuesday 9th July 2019. The Nigerian Stock Exchange (NSE) has officially disclosed that the postponed Airtel Africa listing on its platform has been rescheduled for Tuesday, July 9th, 2019.
This Listing At A Glance
Ahead of its secondary listing on the NSE, Airtel Africa, at the weekend, unveiled plans to distribute 80 percent of its free cash flow as dividend to shareholders.
The telecom company had earlier announced the postponement of the much-expected shares listing slated for Friday, July 5, 2019.
It was expected to conduct cross-border secondary listing of 3,758,151,504 ordinary shares of Airtel Africa Plc on the NSE after its London Stock Exchange (LSE), primarily listing at an offer price of 80 pence per ordinary share.
A secondary listing is when securities, already listed on a primary exchange, are subsequently listed on other securities exchanges, with the Issuer not subjected to the full requirements applicable to listing on the other securities exchange(s) at which it seeks a secondary listing.
The telecoms giant said the postponed listing was to ensure that the company meets all the post NSE approval pre-requisites for listing on the exchange.
A Breakdown Of Facts
Airtel Africa is made up of Airtel Chad; Airtel DRC; Airtel Gabon; AirtelTigo Ghana; Airtel Kenya; Airtel Madagascar; Airtel Malawi; Airtel Niger; Airtel Nigeria; Airtel Congo; Airtel Rwanda; Airtel Seychelles; Airtel Tanzania; Airtel Uganda; Airtel Zambia);
The company had a net profit of $83mn in the fourth quarter of the 2018–19 year to March, driven by its Airtel Money platform, after a loss of $49mn in the year-earlier quarter.
Investors including Warburg Pincus, Temasek, Singtel, SoftBank and the Qatar Investment Authority (QIA) have invested $1.45b in Airtel Africa through primary equity issuance, with the proceeds being used to reduce debt.
India’s Bharti Airtel established its presence in Africa by buying Kuwait-based Zain’s Africa operations for $10.7 billion in 2010. The company has grown to become Africa’s second-largest telecoms company, with over 94 million customers, and is in the top two carriers in most of the countries where it operates.
According to Ovum’s Africa Digital Outlook 2019, mobile revenue in Africa will increase from $54.9b in 2017 to $68b in 2022. Non-SMS mobile data revenue — from mobile broadband access and mobile digital services — is expected to more than double to $32.1bn over that period.
Points To Have In Mind When Investing In Stocks of Companies
Own at least 10–30 different stocks, preferably in different industries: Don’t put all your money in one company/mutual fund/industry and invest in a wide variety of them.
Invest in established leaders in the industry, preferably companies in the top 25% or 30%: Choose great and stable companies. Remember: We’re investing in businesses, not gambling on racehorses.
The Company you’re buying should have a Long, Unbroken Record of Dividend Payments: If a company gives good dividends to their stockholders, it means it has actual earnings to pay it.
Choose companies with a 7-year Price-to-Earnings (P/E) Ratio of Less than 25 (and less than 20 in the past 12 months): Choose good companies with a moderately low P/E Ratio (less than 25).
NB: These points were postulated by Benjamin Graham, author of the classic “The Intelligent Investor
Additionally,
Set a maximum limit of the amount you can invest in companies.
Invest in companies that are making profit or has all the metrics to make profit.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Airtel’s stocks on the London Stock Exchange fell as much as 15 percent to 68p after Africa’s second-largest mobile operator listed on the London Stock Exchange, knocking £500m off its opening valuation to give it a market capitalization of around £2.6bn.
Here Are The Facts
The IPO is for institutional investors and high net worth individuals only
The general public may be able to deal in Airtel’s shares by July 4.
For the IPO, Airtel is backed by SoftBank an issuing house and had priced its initial offering at 80p per share, but this poor IPO in London saw the company perform below what it secured in two recent private funding rounds.
The African subsidiary of Indian telecoms giant Bharti Airtel had priced its shares at 80p, at the bottom of its previously announced 80–100p price range.
This means that its current valuation now stands at around £3.1bn (NGN 1.4 trillion or $3.9 billion). This is already significantly below the valuations implied by earlier funding rounds.
Airtel Africa secured $1.25bn from a consortium of investors including private equity house Warburg Pincus, Singapore’s Temasek, SoftBank and Singapore Telecommunications at a valuation of around $4.4bn, in October last year.
A $200m investment by the Qatar Investment Authority earlier this year put its valuation closer to $5bn.
From the combined Nigerian and London IPO, Airtel Africa — which operates a telecoms and mobile money business across 14 African countries — raised £595m.
The whole of the shares issued in the IPO represented 19 percent of Airtel’s total stock.
“This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”
Airtel’s IPO is For Institutional Investors. Ordinary Nigerians and the General Public Can Begin To Trade In Airtel’s Shares By July 4 On Both The London And The Nigerian Stock Exchanges
Why The Nigerian Stock Exchange and Not The Johannesburg Stock Exchange, Which Is The Largest In Africa, Was Chosen For The African Listing
According to the prospectus of the offer, Nigeria represents the Airtel’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at 31 March 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.
In the year ended 31st March 2019, revenue in Nigeria was $1.1 billion (representing 35.9 percent of the Group’s revenue in the year) and the underlying Earnings Before Interest Tax Depreciation and Amortisation, EBITDA was $550 million.
In Nigeria, revenue attributable to mobile voice services in the year ended 31st March 2019 was $739.8 million
The prospectus said the company wants to raise money so it can use it to pay down some of its crushing debts.
Why Airtel’s Shares Are Worthy Of Public Subscription
Airtel reported revenues of $3 billion for the year ended March 2019 compared to $2.9 billion the year before.
The company also reported a profit of $450 million in 2019.
Airtel posted losses of $134 million and $769 million in 2016 and 2017 respectively.
Timelines For The Offer
The offer closes June 28 and allotment of new ordinary shares to the shareholders begins June 29, 2019, while the crediting of ordinary shares to accounts start July 3, 2019.
The Nigerian admission and start of unconditional dealings on the Nigerian Stock Exchange, NSE is expected from July 4, 2019
Click here to download and read Airtel Africa ’s IPO prospectus.
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Any time from June, Airtel Africa is going to the London Stock Exchange to list its shares for subscription. A total of $1bn worth of shares would be open for subscription. The IPO would be one of London’s biggest this year.
A Breakdown Of Facts
Airtel Africa is made up of Airtel Chad;Airtel DRC; Airtel Gabon; AirtelTigo Ghana; Airtel Kenya; Airtel Madagascar; Airtel Malawi; Airtel Niger; Airtel Nigeria; Airtel Congo; Airtel Rwanda; Airtel Seychelles; Airtel Tanzania; Airtel Uganda; Airtel Zambia);
The company had a net profit of $83mn in the fourth quarter of the 2018–19 year to March, driven by its Airtel Money platform, after a loss of $49mn in the year-earlier quarter.
Investors including Warburg Pincus, Temasek, Singtel, SoftBank and the Qatar Investment Authority (QIA) have invested $1.45b in Airtel Africa through primary equity issuance, with the proceeds being used to reduce debt.
India’s Bharti Airtel established its presence in Africa by buying Kuwait-based Zain’s Africa operations for $10.7 billion in 2010. The company has grown to become Africa’s second-largest telecoms company, with over 94 million customers, and is in the top two carriers in most of the countries where it operates.
According to Ovum’s Africa Digital Outlook 2019, mobile revenue in Africa will increase from $54.9b in 2017 to $68b in 2022. Non-SMS mobile data revenue — from mobile broadband access and mobile digital services — is expected to more than double to $32.1bn over that period.
Going On IPO Despite Citron’s Claims Against Jumia
Although market appetite shown for Africa e-commerce company Jumia in its New York IPO in April may mean that the time is right, a report from Citron Research has, however, put a big stain on Jumia’s IPO filing. This is not however expected to affect Airtel’s credibility. Unlike Jumia, Airtel Africa is a profit-making company.
‘‘In theory, the Jumia IPO should not affect demand for Airtel Africa shares because they have different business models,’’ argues Andrew Sekandi, an investment adviser at Alpha Sierra in London. ‘‘Airtel Africa, deserves to be judged on its own merits. But capital markets being what they are, Jumia’s success may draw in some retail investors and maybe even some institutions that would not previously have considered betting on an Africa-focused stock. Some investors will see the Jumia and Airtel IPOs as essentially a bet on the growth of African consumer markets and the middle class, so this could help Airtel,” Sekandi says.
‘‘Airtel Was Saved by Exapansion Into The African Market.’’
Airtel was “Saved by Africa” in the face of falling profit margins in India, according to October 2018 research from Bond Critic published on Smart Karma. Bond Critic argued that Airtel’s expansion into Africa has been credit positive. Motilal Oswal, which rates Bharti Airtel, says the Africa business has been playing a key part in overall growth for the Indian company.
Strong momentum in Africa should continue on the back of potential to increase revenue share in some markets and growth in the use of Airtel Money, Motilal Oswal says.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
