Airtel Africa – Mobile Money IPO Momentum Builds as Digital Scale Accelerates

Fintech engine strengthens ahead of transformational 2026 listing

Strategic Context

Airtel Africa’s mobile money business is entering a pivotal phase as the Group prepares for its public listing in the first half of 2026. The evolution of Airtel Money from a basic funds-transfer service into an expanding digital financial ecosystem supports Airtel Africa’s strategic pivot from telecommunications to a dual-platform model — digital connectivity + financial services enablement.

The company’s fintech arm now processes transactions approaching $200bn annually, reflecting rising customer adoption, improving smartphone penetration, and growing financial inclusion across its markets. With deeper ecosystem engagement and product expansion into lending, savings, insurance, and merchant payments, Airtel Money is poised to crystallize meaningful standalone value when listed.

Performance Highlights

• Mobile Money Customers: 49.8m, up +20% YoY
• Annualised Transaction Value (TPV): $193bn, up +35.9% YoY
• Fintech Revenue Growth: +30.2% YoY
• Mobile Money ARPU: +11% YoY
• Smartphone penetration across Airtel markets: 46.8%

CEO Sunil Taldar affirmed that IPO preparation remains on track for H1 2026, citing accelerating platform usage and increased digital adoption via the MyAirtel app.

Investment Thesis

Airtel Money is in the midst of a structural monetization cycle supported by:

1) Scale Advantage A nearly 50 million-user base and fast-growing digital footprint create a defensible network advantage, particularly in markets with historically low financial-services penetration.

2) Platform Expansion Increasing product diversity — beyond payments into lending, savings, insurance, and merchant services — strengthens revenue quality and enhances lifetime value per user.

3) Digital Infrastructure Synergy Smartphone penetration approaching 47% and rising data adoption support ecosystem stickiness and integration with Airtel’s digital channels.

4) IPO Catalyst and Value Unlock A successful 2026 listing positions Airtel Money as one of Africa’s largest publicly traded fintechs, unlocking balance-sheet flexibility and allowing the business to pursue accelerated growth and partnerships.

5) Telco-Fintech Model Validation Peer developments — notably MTN’s fintech spin-outs and strategic investor interest — reinforce the sustainability of telecom-anchored fintech franchises and set valuation benchmarks.

Strengths

Exceptional scale and transaction velocity → $193bn processed annually, rapid user expansion Strong digital adoption and customer engagement supported by MyAirtel app integration Structural growth drivers including smartphone penetration, digital financial inclusion, and broadening product suite Clear strategic direction with IPO timeline and continued network and ecosystem investment First-mover advantage in multiple markets leveraging telco infrastructure and user trust

Weaknesses / Risks

Dependence on connectivity penetration — fintech growth tied to mobile adoption trends Regulatory complexity across 14 jurisdictions — potential licensing and capital compliance hurdles Execution risk around IPO timing, valuation, and market sentiment Competitive pressure from MTN and emergent digital-only providers Fintech revenue still early in maturity curve vs more diversified global digital banking peers

Industry Context

The African telco-fintech model is maturing rapidly. MTN’s fintech unit growth trajectory, advanced product rollout and external investment validation (e.g., Mastercard stake) highlight the broader shift:

• Telcos are evolving into financial-services providers
• Fintech divisions are being separated for value unlocking
• Africa is entering a phase where large-cap fintech listings will shape capital markets

Airtel Money’s expected IPO will cement this evolution, serving as a valuation anchor for Africa’s emerging digital-finance sector.

Analyst Commentary – Implications & Interpretation

Airtel Money's growth trajectory underscores a structural, not cyclical, shift in African consumer behavior. The data-to-fintech monetization stack being built places Airtel Africa at the center of the continent’s digital economy transformation.

The platform's ability to monetize digital payments and transition users into higher-margin services (credit, insurance, savings) mirrors proven global fintech playbooks — but with the added advantage of telco infrastructure, embedded user base and lower customer-acquisition costs.

The coming IPO represents a value-crystallization event and a test of investor appetite for scaled African fintech platforms. Successful execution could set new benchmarks, attract global capital, and accelerate industry-wide digital financial inclusion.

Outlook

Momentum is expected to remain strong through 2026, supported by:

• Continued smartphone and data penetration growth
• Network expansion and digital-platform integration
• Wider fintech product rollout
• Strengthening customer engagement metrics
• Robust regulatory positioning ahead of IPO

While risks remain, the risk-reward profile is skewed positively as Airtel moves to convert operational scale into market valuation and capital flexibility.

AIRTEL AFRICA PLC Unaudited Financial Statements for the Half Year Ended 30 September 2025 Released: 28 October 2025

Consistently Strong Results Reflecting Sustained Demand and Continued Strategic Execution

Operating Overview

Airtel Africa Plc delivered another period of robust financial and operational performance for the half year ended 30 September 2025, reflecting sustained momentum across its core markets and continued progress on its strategic priorities of digital expansion, customer-centric innovation, and financial inclusion. The Group’s total customer base expanded by 11.0% year-on-year to 173.8 million, driven by solid growth across all regions. Data customers increased by 18.4% to 78.1 million, highlighting the success of targeted capex deployment and the growing adoption of smartphones across markets. Smartphone penetration reached 46.8%, up 3.8 percentage points, supported by affordable device initiatives and expanding 4G coverage. Data traffic rose by 45.0%, boosting data ARPU by 16.8% in constant currency, as users consumed more high-speed internet services across the Group’s extensive fibre and tower networks. This resulted in data revenue surpassing voice for the first time in Airtel’s history, marking a structural shift in revenue composition. On the fintech front, Airtel Money continued to gain scale and relevance in driving digital inclusion. The mobile money customer base grew 20% to 49.8 million, while annualised total processed value (TPV) reached $193 billion, up 35.9%. The segment contributed over 21% of Group revenue, reinforcing Airtel’s diversification into high-growth digital financial services. Airtel’s strategic network investments remained central to its operational strength. The Group rolled out 2,350 new sites during the period, bringing total sites to 38,300, with 4G coverage expanding to 98.5% of sites. Fibre infrastructure also grew by approximately 4,000 km to 81,000 km, enhancing network resilience and capacity to meet rising demand. Overall, population coverage improved to 81.5%, a year-on-year increase of 0.7 percentage points.

Financial Performance Summary

Airtel Africa reported strong growth across key metrics, underpinned by rising customer usage, disciplined cost management, and currency appreciation in several markets.

Segmental and Regional Performance

Nigeria: Nigeria remained the Group’s largest market and primary growth engine. Revenue rose 49% in constant currency to $697 million, propelled by 62% growth in data revenue following tariff adjustments and strong customer additions. EBITDA margin expanded to 56%, reflecting improved operating leverage and naira appreciation during Q2 2026.

East Africa: Revenue advanced 15.6% to $1.05 billion, driven by continued momentum in data and Airtel Money. EBITDA margin stood at 48%, supported by disciplined cost control and favourable FX movements across Kenya, Uganda, and Tanzania.

Francophone Africa: Revenue climbed 14.5% to $749 million, as economic recovery and CFA franc appreciation aided performance. EBITDA margin improved to 39.5%, boosted by operational efficiency and network expansion.

Operational Highlights

• Data Services: Data revenue surged 37% in constant currency to $1.16 billion, overtaking voice as the largest revenue stream. Average monthly data usage per customer rose to 8.2GB, reflecting growing video streaming and mobile internet penetration.
• Voice Services: Voice revenue grew 13.2% in constant currency, supported by an 11% increase in subscribers and higher engagement levels across key markets.
• Mobile Money: Airtel Money revenue climbed 30.2%, supported by robust customer acquisition, expanding merchant ecosystems, and digital wallet usage. The segment remains strategically positioned ahead of its planned IPO in H1 2026.

Capital Expenditure and Balance Sheet Strength

Capex during the half year was $318 million, broadly flat year-on-year, reflecting ongoing investment in network expansion and digital infrastructure. In light of the strong financial results, FY2026 capex guidance has been revised upward to $875–900 million to accelerate network rollout, fibre densification, and data centre development. Airtel continued its debt localisation programme, reducing exposure to currency volatility. Approximately 95% of OpCo debt (excluding leases) is now in local currencies, up from 89% a year ago. Net debt stood at $5.5 billion, with leverage improving from 2.3x to 2.1x. On a lease-adjusted basis, leverage reduced to 0.8x from 1.0x, supported by higher EBITDA. Finance costs fell significantly to $304 million (from $528 million), as FX losses seen in the prior year did not recur. This, alongside robust operating income and positive currency movements, drove the sharp improvement in profitability.

Shareholder Returns and Capital Allocation

In line with its progressive dividend policy, the Board declared an interim dividend of 2.84 US cents per share, representing a 9.2% increase year-on-year. The $100 million share buy-back programme remains on track for completion by 31 March 2026, reinforcing Airtel’s confidence in long-term value creation and balance sheet resilience.

Key Strengths

1. Strong Revenue and Earnings Growth

• Revenue up +25.8% YoY, EBITDA up +33.2%, PAT up +375%.
• EPS surged +908%, driven by improved margins and FX stability.

2. Data-Driven Growth Model

• Data revenue surpassed voice, becoming largest segment.
• Data traffic +45%, data ARPU +16.8%, smartphone penetration rising to 46.8%.

3. Fintech Momentum

• Airtel Money revenue +30%, customers +20%, TPV $193bn (+36%).
• Fintech becoming a core value driver; IPO planned for 2026 to unlock further value.

4. Operating Efficiency & Margin Expansion

• EBITDA margin expanded to 48.5% (from 45.8%).
• Strong cost optimization and scale efficiencies.

5. Strong Cash Flow and Debt Reduction

• Operating free cash flow +46.5%.
• Net debt down 6.8%, leverage improved to 2.1x (vs. 2.3x).

6. Reduced FX Exposure

• 95% of OpCo debt in local currency, shielding earnings from FX shocks.
• FX appreciation in Nigeria and CFA region boosted profitability.

7. Strategic Capital Allocation

• Interim dividend +9.2%.
• $100m share buyback supports shareholder value.
• Stable capex, yet investing for 5G & data center expansion.

8. Expanding Customer Base & Digital Ecosystem

• Total subscribers +11% to 173.8m.
• Mobile money customers +20%.
• 98.5% sites 4G-enabled; expanding fiber backbone.

Key Weaknesses / Risks

1. Macro & FX Vulnerability Remains

• Despite improvements, operations remain exposed to African currency volatility and inflation pressures across multiple markets.

2. Capex Intensity Increasing

• FY2026 capex guidance +10–12.5% — future free cash flow may feel pressure.

3. Competitive Telecom Landscape

• Fierce competition from MTN and new digital-first entrants could heighten pricing and ARPU pressure.

4. Regulatory & Policy Risk

• Operating in 14 African markets increases exposure to:
  • Telecom regulatory shifts
  • Fintech licensing and capital adequacy rules
  • Taxation changes

5. Continued Dependence on Data & Fintech Growth

• Rapid voice revenue decline continues; success depends on sustained data monetization and fintech execution.

6. Execution Risk in Fintech IPO

• Airtel Money IPO planned for 2026 — valuation, timing, and regulatory approval remain execution risks.

Bottom Line

Airtel Africa Plc delivered a resounding half-year performance, characterised by robust revenue growth, margin expansion, and improved capital efficiency. The company’s transformation into a digital-first and fintech-enabled telecommunications group is gaining traction, with data and Airtel Money now the twin pillars of growth. While macroeconomic headwinds, inflationary pressures, and currency risks persist across its markets, Airtel Africa’s localized financing structure, operational discipline, and growing digital ecosystem position it strongly for sustained earnings growth into FY2026 and beyond.