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Pyramid Point: Airtel Rethinks Its African Approach

Boston, Massachusetts- February 19, 2013- Three years after Bharti Airtel began operating in Africa, the operator is still waiting for its business to turn profitable and now faces two paths to move forward in the region, according to a new research note from Pyramid Research Associate Analyst, Atul Arora.

Read the full Pyramid Point here.

The first path Airtel is faced with is to continue to cut prices and hope to expand the subscriber base faster than possible declines in its ARPU, while the second involves learning to make money from new revenue services. Pyramid Research believes that the former approach is vulnerable to premature saturation in some sub-Saharan markets: While the actual user bases are much smaller than what subscription rates imply in many markets due to multi-SIM ownership, reaching new customers is increasingly a consequence of costly network expansions into areas of low density and limited infrastructure. The latter tactic, on the other hand, involves focusing on building upon non-voice revenue that has grown 65 percent in the past two years, but is still only 13 percent of total revenue.

It appears that Airtel has come to terms with the brutal challenges of sub-Saharan African markets and is moving in the right direction. What remains to be seen, however, is whether it will be able to keep its head above water long enough to complete a shift in identity and diversify its revenue streams.

Read the full Pyramid Point here.

Related:

Airtel to See Instant Growth in Profit Margin as Initial Investment Period Ends
Pyramid Research Mobile Operator KPI Forecast

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Press Contact:
Jennifer Baker
Pyramid Research
Marketing Director
617-747-4110
jennifer.baker@ubm.com

Pyramid Research (pyramidresearch.com) offers practical solutions to the complex demands our clients face in the global communications industry. Its analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for more than 100 countries – a distinction that has remained unmatched for more than 25 years. As a division of UBM Tech (tech.ubm.com), Pyramid Research contributes to the only integrated business information platform serving the global communications industry.

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