Airtel’s $100 Million Game-Plan In Africa. Betting Elsewhere?

Bharti Airtel, plans to invest US$ 100 Million in a span of three years to take on regional big-wigs in Rwanda, Africa. Bharti Aritel, after securing license to operate last year from the Rwandan government, will roll-out mobile telephony service starting this year.

Is there any Game-Plan of Bharti Airtel behind this investment? India is a huge market not only in terms of population, but also geographies. Bharti successfully played the numbers game & emerged in the top 10 mobile service operators in India. Some of the tactics that Airtel routinely employs are cheaper calling rates within its own network, negligible mobile transfer services and one of the cheapest roaming price.

But why is Airtel looking elsewhere if India is such a huge market? The answer lies in competition. One can only lower tariffs to a certain extent. Furthermore, India is home to more than a dozen telecom operators all jostling for customers. Therefore, Airtel wants to avoid risky its relationships in India.  Reassuringly, Airtel has cut its losses in the African Continent & if all goes as per plan might start making profits from this year.

Africa is very similar to India, but heavy competition is virtually non-existent. The only real competition Airtel will face will be from MTN which presently owns 67 percent of market share, whereas Airtel holds rest of the 33 percent. Owing to such poor competition Africans are a harassed lot. They usually carry phones from multiple service providers to ensure reach-ability.

If Airtel can offer cheaper, but quality service, it could prove to be huge success. MTN has already braced itself for Bharti entry by announcing price cuts in tariff. However, we feel it will be more of a quality game if it wants to stay on top.

Do you think Airtel is right in shifting focus from its home country?

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