Telecom Major Bharti Airtel share price slipped 0.82% on Thursday morning despite the overall sentiment on equity markets being positive. The Sunil Bharti Mittal-led telecom company on Wednesday announced a deal with Amazon Web Services (AWS) which saw the stock price jump as high as 2% on Wednesday. However, Bharti Airtel’s expansion plans in Kenya fell through on the same day which held the telecom giant back from expanding in the African nation. Bharti Airtel shares were trading at Rs 553 per share on BSE Sensex.
Airtel Kenya arm, Airtel Networks Kenya Limited and Telkom Kenya Limited had entered an agreement in February 2019 to merge their businesses in Kenya. Despite Airtel Africa plc and Telkom respectively endeavouring to reach a successful closure, the Transaction has gone through a very lengthy process which has led the parties to reconsider their stance. Accordingly, Airtel Africa plc and Telkom have decided to no longer pursue completion of the Transaction, Airtel Africa told London Stock Exchange.
The Africa unit of Airtel has an average revenue per user of $3 and has shown healthy EBITDA margin expansion. Subscribers in the Q1 of this fiscal year grew by 1% for Airtel Africa. The unit saw 16% on-year growth in revenue last quarter to Rs 6,451 crores. Currently Airtel caters to 14 million customers in Kenya and the unit has been growing. Kenya is a large and growing market and we remain committed to build a growing profitable business, said Raghunath Mandava, Airtel Africa CEO and MD.
With Airtel signing a packet with Amazon, the telecom giant will take on Reliance Industries’ Jio Platforms which has signed a deal with Microsoft for a similar service. Airtel Cloud will build an AWS Cloud Practice supported by AWS Professional Services, as well as develop differentiated Airtel Cloud products and capabilities leveraging AWS services, Airtel’s data centre capabilities, and Airtel’s network and telecoms offerings, it said in a statement.
Most brokerage firms maintain their bullish stand on Bharti Airtel. Along with growing demand for data in India and a price hike likely in the offing Bharti Airtel would also benefit from the weakness in Vodafone Idea. Despite the coronavirus crisis, Bharti Airtel continues to impress with its growth. Bharti Airtel remains confident about funding the payment for AGR dues, which is a huge positive for any telecom player. Motilal Oswald has a Rs 700 per share target price while Emkay Global expects the stock to surge to Rs 684 per share.