India's Bharti Airtel has revealed plans to incorporate tower companies in each of the 16 African countries it now operates in, as part of a turnaround plan for these businesses.
The company aims to use the new companies to promote infrastructure sharing, in a bid to optimize the costs of operating in Africa through avoiding duplication of infrastructure, Bharti CEO Manoj Kohli toldBusinessWeek.
To help foster sharing, the tower companies will be managed independently from Bharti's consumer business, he said.
As part of the cost-cutting drive, the company also plans to spread automation systems, such as its Easy Recharge credit top-up service, across the African units.
Sales from Bharti's African operations grew 8.6% to $911 million in the December quarter, but its ebitda margins narrowed to 21% from 24%.
Bharti acquired the African assets from Zain for around $9.7 billion in a deal announced in March.
But competition in the various markets has been steadily heating up, prompting Bharti to embark on the cost-cutting drive.
Bharti already has experience operating tower companies – in India, Bharti has its tower subsidiary Bharti Infratel, and is in a tower JV with Vodafone and Idea Cellular named Indus Towers.
Infratel owns Bharti's towers in seven of India's 22 circles, but has been rumored to be interested in selling them off and then leasing them from the buyer. Indus Towers manages the remainder.