Airtel Zambia to ‘Shed Off’ Its Towers Business. Zambian Towers Limited to be formed

In an announcement issued in Zambian newspaper The Post, Airtel Networks Zambia Plc has told shareholders that it shall convene a meeting to discuss the re-organisation of Airtel by moving its ‘passive’ infrastructure worth ZMW 571 Million to a new subsidiary in order to achieve management and operating efficiencies. The new subsidiary will be named, Zambian Towers Limited.

The infrastructure, reads excerpts of the Announcement,  “includes: towers and civils works; diesel generators; batteries; grid connections; solar equipment; air conditioners; shelter; and security fencing. This change will take effect on January 1, 2014 subject to an extraordinary general meeting of the equity holders in the Company.”

Zambian Towers will operate as a separate entity, and will follow global practices of reducing capital expenditures on behalf of Airtel. In future it should be able to source funds for its own operations. The services will be provided to Airtel on a “non-exclusive” basis and to any other operator that requires tower infrastructure in Zambia.

This is another move for the operator to focus on core business, having completed last year its outsourcing initiatives for the IT, networks, billing and customer service to vendors such as IBM, Tech Mahindra, Nokia Siemens, and Ericsson.

With the company stripped to its leanest structure, you would expect a turn-around in customer offerings as they have more time to “focus on core” business. However, the market dynamics at play and the landscape has not spared Airtel, as its market share of customers and revenues continues to dwindle, and its staff migrate to greener pastures. We hope Airtel will achieve its ‘long-term strategy of maintaining and strengthening its position in the telecommunications market in Zambia.’

We hope to hear more from the public relations team, on the fate of the Infrastructure, and how the affected employees, of Airtel or its vendors, will manage this transition. Hopefully, this period of change will not lead to a deterioration in network quality.

Source: The Post, 29 November 2013 /Announcement: Airtel/Pangea Securities.