Earnings Call: Q4 2021

May 12, 2021

Hello, good morning and good afternoon, ladies and gentlemen, and welcome to the twenty twenty one Full Year Results Conference Call for Etel Africa plc. Today's speakers are Raghunath Mandava, Chief Executive Officer and J. D. Paul, Chief Financial Officer. All lines are now closed except for the main speaker line. There will be an opportunity to ask questions of the speakers at the end of the presentation. If you would like to ask a question, then please log this request by pressing star and then one on your key your touch tone phone or on the keypad on your screen. Before we continue, I will present an important disclaimer. This presentation has been prepared by Airtel Africa plc and is for information purposes only. This presentation contains forward looking statements, which by their very nature involve inherent risks and uncertainties, and risks exist that such forward looking statements will not be achieved. You are strongly advised to review the disclaimer page of the investor presentation at www.etel.africainvestors. This conference call will be recorded and the transcript will be posted on the Airtel Africa website. The first speaker will be Mr. Raghu Mandava. Please go ahead, sir. Thank you. Good morning, good afternoon, everyone, and thank you for joining on today's call. I will first take you through the overall business strategy and headlines performance and Jaydeep, our CFO will take you through the results in detail. Our purpose is to transform lives through providing affordable mobile and mobile money services. No other continent needs this more than Africa with its large distances and poor infrastructure. This year specifically has been a year when these services were needed more than ever before. I will outline later in my presentation the progress we are making on our ESG strategy. Our financials have had minimal impact from COVID. We have continued to grow our revenues with full year revenues growing at 19.4% in constant currency. The last two quarters our growth has been well over 20%. This has flown through to EBITDA which has grown by over 25%. Restated earnings per share on a pre exceptional basis has grown by 18%. The above growth has come from both customer growth and ARPU growth. Customer growth has been muted due to the stoppage of gross adds or new customer regimes in our largest market Nigeria from December. However, our ARPU has grown by 7% to $2.8 Data usage has grown by 74% and mobile money transactions have grown by 53% to well over $46,000,000,000 of transaction value for the year. This year, we have brought minority investments into our mobile money business from the RISE Fund and Mastercard at $2,650,000,000 valuation on a cash and debt free basis. We have progressed on our Tawako sales in Malawi and Madagascar and signed Memorandum of Understanding for our Tawas in Chad and Gabon. We have also paid for the renewal of our licenses for ten years in two of our largest markets Nigeria and Uganda. Financial highlights. We are seeing growth across all our parameters with revenue growing by 19.4% for full year and twenty one point seven percent in the last quarter. EBITDA margin for the full year was at 46.1% with the last quarter at 47.7%. We can also see growth in EPS and free cash flow. Delivering against our objectives, you will see that there is a chart we present every time we interact with you. We have delivered against all our objectives except capital expenditure, where we fell slightly short of our target spend due to COVID related logistical delays. If you look at our region wise performance, while Nigeria continues to grow at well over 20% consistently, we also see East Africa get into the 20 plus leak. Francophone Africa, has been of some concern with negative growth a few quarters back, has now delivered 10% growth. All three regions have delivered very good EBITDA growth also. COVID-nineteen The last year has been unprecedented and brought in new ways of working. While we are still going through the pandemic, I would first like to thank and express my appreciation to the governments who, recognizing the limited resources of medical facilities, have taken great care and efforts to manage the crisis and prevent it from becoming the crisis as has been in many parts of the world. Our employees and partners have gone beyond the call of duty to keep our services up during this pandemic. A huge thank you to all of them. We have focused a lot on safety during the pandemic for our employees, our customers, and our partners. But we have also supported our communities in various ways, including, for example, our provision of free data for students, waiving fees on certain mobile money transactions, and making access to many educational websites free of charge to ensure that students would continue their studies. Delivering against our growth strategy in 2021. We continued with our six pillar strategy. We see our role as a strong partner to the nations by providing telecom and financial services, and we continue to see multiple areas for further upside. I've always for the last few years now, I've been saying that Africa offers tremendous potential for growth across voice, data and mobile money, and we are seeing that in our results. Voice growth has further accelerated to over 11%. Data and mobile money remain our growth engines, growing at well over 30%. And together, these now contribute to over 40% of our total revenue. Voice With unique customer penetration being low, growing population, lower minutes of consumption, there is a lot of potential for voice to continue to grow, Expanding our network and improving availability through deeper distribution and simple pricing have helped us to grow both our customers and ARPUs. Customer growth for the year was 6.9% due to the stoppage of gross adds in Nigeria in the last three months of the year, while ARPU was up marginally. Revenue growth reached 11% as customer growth in the earlier quarters was higher. Our network coverage increase, along with our unique franchise led distribution model, has made availability of our services reliable even in the deepest of markets. Data. The potential for data growth is even higher the penetration of smartphones remains amongst the lowest in the world and there is a long path to growth. The extremely poor home broadband connectivity across the continent also means that customers have to rely only on mobile networks for their data connectivity. Our network design of and increasing fiber rollout have helped us to create a network with huge data capacities. This has also helped us to roll out four gs in almost 77% of our sites. Data customer usage is up by 44%. This, along with the data customer growth of 14.5% has helped data revenues grow over 30%. Our data ARPU is at $2.5 with the four gs customer ARPU being at $5.1 Among the data customers, four gs customers now make up to 37%. Mobile money. A huge opportunity to bank the unbanked. The combination of long distances and poor infrastructure mean that customers who can avail themselves of banking services are far lower than even the numbers who have bank accounts. The cost of banking services are high in the region and therefore prevalence of cash is also very high. The key is to provide financial services in an assured manner that builds trust through ease of use and reliability. Availability of services close to customers in an assured manner is critical. This has been achieved through our unique franchise like Mobile Money Servicing Points over and above the fast growing agent network. Our Airtel Money branches have grown well over 10,000 and the exclusive kiosks and mini shops now exceed 37,000. We have been able to increase mobile money penetration in nearly all our markets this year. In some countries, we already have a penetration of well over 50. And there are many more where we believe we can significantly grow the penetration. The overall Africa penetration is now at 28% excluding Nigeria, where we are still awaiting the Payment Service Bank license. We have, during the last year, built our partnership ecosystem with various financial services companies in the areas of direct transfer from banks, international money transfers, payments, loans and savings. We see huge potential to grow our range of services and to make these available in a convenient manner to our customers. The increase in assured availability along with increased services have helped us to increase the overall transaction value by 53% as customers grew by over 19%. Mobile Money revenue grew by over 35% for the year. We are pleased to be able to welcome the Rides Fund and Mastercard as new minority investors into our Mobile Money business, attributing an enterprise value of $2,650,000,000 We intend to bring in minority investors up to 25%. Mobile Money operations have delivered $4.00 $1,000,000 of revenue and $195,000,000 of EBITDA. Mobile Money now contributes to a little over 10% of our overall business. Sorry. Along with bringing in investors and mobile money, pursuing our strategy of an asset light model, we have signed deals for the sale of 1,200 plus stars in Malawi and Madagascar at $108,000,000 We have also signed an exclusive MOU for the almost 1,000 tasks we have in Chad and Gabon. Post this, we will be left with tasks in Tanzania and Seshelz only. We do see opportunities and are working on these to further monetize our fibre and data center infrastructure. Our ESG journey. We have made some progress in articulation of our ESG strategy. Our leadership team has been working to formulate a sustainable framework for the group. This is across the four pillars our business, our people, our community and our environment. Our purpose of transforming lives through addressing digital and financial inclusion across our countries of operation can be achieved through further growing of our network coverage and by ensuring our services are both available and reliable. We aim to become an employer of choice through building a diverse and fully inclusive working environment and striving for the well-being of our employees. For our communities, we can help through increasing financial inclusion and through improving access to health and education. And for the environment, we can ensure that we limit our direct and indirect impact on the environment and address the environmental risks of our business. For each of these pillars, we have articulated the key focus areas where we can best deliver. The next slide shows the six United Nations Sustainable Development Goals where we can make the biggest difference Quality education, Gender equality, Decent work and economic growth, Industry innovation and infrastructure and Reduced inequalities. Reduced inequalities and finally responsible consumption and production. These are not the only ones we will deliver, but these are the ones where we have the greatest alignment to our strategies and we can make a genuine, meaningful and measurable contribution. Our people, we continue to focus on talent, capability and technology. This is my final slide before handing over to Jaydeeb. Has been a difficult year. I want to say once again a big thank you to all our employees, who while adapting to a new way of working at home and under strict social distance protocols when required, have ensured that our customers, communities and our nations continue to have an uninterrupted access to our service. We have launched our employee assistance program providing free consultation to well-being and healthcare professionals across the countries. We have been continuously engaged through town halls, feedback sessions, annual conferences and employee surveys. We have continued to focus on training and development, especially in upgrading functional skills with over two hundred thousand hours of learning across the group. We are a very diverse team with 34 nationalities and 26% of our employees are women. Our employee engagement survey had an 87 response rate and an engagement score of 79%. Before I sign off, I would like to address the issue of my retirement from the Board of Airtel Africa as of 09/30/2021. The last five years have been an exhilarating journey, where we've been able to turn around and transform the business into a strong, high growth and profitable company. We have been able to build the business with our unique management and problem solving approach to bring in substantial performance improvement. I'm very proud of what we've achieved over the last five years in Africa, and I look forward to seeing the company make even greater progress over the coming years. Having been at Bharti Airtel for thirteen years and at Airtel Africa for five years as CEO, I feel now is the right time for me to take a sabbatical. I'll now hand over to Jaydeep Pall, CFO, to take through the detailed financial results. Over to you, Jaydeep. Thank you, Raghu, and good morning and good afternoon to all of you who have joined us today. In overall terms, for our full year to thirty first March two thousand twenty one, we have delivered a very strong set of I'll take you through some of the details, but first, let me start with the highlights. In constant currency, our underlying revenue grew 19.4%, and underlying EBITDA increased by 25.2% to almost 1,800,000,000. EBITDA margin improvement was two ten basis point, which now stands at 46.1%. Our balance sheet position has continued to improve with our leverage ratio now improved to two times. We generated strong free cash flow, up almost 43% to 647,000,000. Earning per share before exceptional item was at 8.2¢, a decent advance from the 6.9¢ equivalent last year. The board has recommended final dividend of 2.5¢ in line with our new dividend policy. On the next slide, you can see the relative contribution to revenue growth. Our reported revenues were up by 13.6%, while constant currency growth was 19.4. The growth difference of almost 6% was due to unfavorable foreign exchange devaluation, mainly in Nigeria, Zambia, Kenya, and partially offset by the appreciation in the Central African franc. All three of our key service segments, voice, data, and mobile money, contributed to growth. In constant currency, double digit growth in voice revenue and more than 30% in data and mobile money revenue contributed to incremental revenue of almost $640,000,000 during the year. Coming to Nigeria segment. Here, we posted a strong performance despite the same registration restriction we faced in the last quarter. Nigeria continued to deliver a strong growth of almost 22% on a constant currency basis. Our voice revenue grew almost 14% due to combination of customer growth for most of the year and increase in usage per customer. We continue to build our leading four gs network in the country. Now 84% of our total sites are on four gs. This helped drive data usage and consequently, data revenue growth, up 36% over the year. The regulations requiring updating SIM registration with national identification numbers and restricting our new customer registrations came out in December. Since then, we have registered 23,200,000 customer names, the national identification numbers. And now we have received approval from the NCC for new customer registration from certified outlets of which about 800 have already been given approvals, and we are already actively onboarding customer once again. Our EBITDA margin in Nigeria has stayed relatively flat at 54.1%, while our operating free cash flow improved strongly, up 53.6% to $564,000,000 Coming to performance of East Africa. This has been the fastest growing region in this year with revenue growth of 23.5% in constant currency. The growth was contributed by customer base growth of more than 9% and ARPU growth of 10%. All our key services grew strongly in the region with voice up 15.4%, data up 23.9%, and mobile money growing at 47%. The combination of our investment in the network and our distribution continued to drive both customer growth as well as usage growth across all key services. We have further strengthened our four g network leadership in the region with four gs now available from 76% of our sites, up from 66 of last year. The accelerated revenue growth along with continued cost efficiency have helped to drive underlying EBITDA margin expansion by more than five percentage points. Operating free cash flow was also increased by 42% during the year. Coming to Francophone Africa performance. This region is turning into a key contributor to our overall group revenue growth, posting 10% growth for the year and notably over 20% growth in the final quarter, which is quarter four. Full year voice revenue grew by 0.5%, but in the fourth quarter, we posted a voice revenue growth of more than 7%. The customer base grew 14.5%. All our key services, voice, data, and mobile money grew in this region. The key contributor has been data services with revenue up almost 32% due largely to recent expansion of the four g network in the region, with 60% of the sites are now on four g, and this in turn has led to data customer base growth of 25%. Mobile Money revenues grew 15% in the region and by 18% in quarter four, with particularly strong growth in the DRC. The combination of revenue growth and our continued focus on cost in the region have improved EBITDA margin by almost four percentage points this year to 37.7%. EBITDA margin for quarter four was 42%, an improvement of more than nine percentage points. Moving on to underlying EBITDA. This year, underlying EBITDA has increased 18.3% in reported currency and 25% in constant currency. Reported EBITDA for the year was almost $1,800,000,000. The 86,000,000 of dollar of adverse currency devaluation impact was mainly contributed by Nigerian naira, Zambian kocher, and Kenyan shilling, however, partially offset by appreciation in the Central African franc. We continue to expand our EBITDA margin and close the year with 46.1% EBITDA margin with Q4 exit rate of 47.7%. Our EBITDA flow through was almost 60% during the year. Coming on to the capital allocation policy, our priority remains to invest in growth and at the same time continue to further bring down the leverage ratio. Firstly, our CapEx for the year was slightly lowered from our target as explained by Rohu that due to COVID related logistical challenges in the initial period of COVID impact, pandemic, our guidance remains that annual CapEx should be within a range of 650,000,000 to $700,000,000. Secondly, on leverage, we have made good progress and achieved two times despite payment of $247,000,000 for license fee in two two of our largest operation, Nigeria and Uganda, for a period of ten years. And finally, on the dividend, we announced our new progressive policy earlier this year, which aims to grow the dividend annually by a mid to high single digit percentage from a base of 4¢ per share for FY '21 until our reported leverage falls below two times to net debt to underlying EBITDA on a sustainable manner. And finally, on the dividend sorry. The board has recommended a final dividend of 2.5¢. Adding to the interim dividend of 1.5¢, we'll pay a total dividend of 4¢ for this year. Our cash flow generation this year has been stronger, delivering $647,000,000 largely as a result of our improved EBITDA performance and marginally less CapEx spend, partially offset by increased cash taxes resulting from higher operating profit. Coming on to the leverage. Over the last few years, we have consistently deleveraged and closed this year with a net debt to underlying EBITDA ratio of 2x. Our balance sheet has continued to strengthen as we continued our EBITDA expansion. Further, we are continuing to execute our strategic initiative to unlock value as Robo has highlighted earlier as well as continuing to balance our currency exposure through increased localization of our debt. Finally, turning to earning per share. Before exceptional items, this was 8.2¢ this year, an increase of 12.8% over last year. The previous year had a lower number of weighted average shares and one off derivative gain benefit of 0.4¢ and 1.2¢, respectively. Excluding this, our restated EPS grew by 44.5%. So to summarize, we have delivered an encouraging results with good performance on all metrics, reported revenue growth of 13.6% and underlying EBITDA margin for the year was 46.1%. Strong cash generation during the period. Free cash flow increased by almost 43%. We continue to deleverage and reached a leverage ratio of two times. The board has recommended a final dividend of 2.5¢, taking a total dividend to 4¢ per share. Our outlook in the medium term remains unchanged as we continue with our growth momentum. Thank you. And now I'll hand over to the moderator for question and answers. Thank you, sir. Ladies and gentlemen, I would just like to remind you, if you would like to ask a question, you are welcome to press Our first question is from Maurice Patrick of Barclays. Yes. Good morning. Good afternoon, guys. Thank you for taking the question. A couple from me, please. First question is on spectrum. You've made two spectrum purchases in two of your larger markets in the last twelve months. Do you have any visibility on any future spectrum that could be coming up, whether it's new spectrum or potential renewal spectrum in the next twelve months, please? That's the first question. So the two things that we've done in both Nigeria and Uganda extension of our licenses, which come along with the spectrum of 918 in Nigeria and the whole range of spectrum that we got in Uganda. Other than that, we have picked up small volumes of spectrum, 800 megahertz, 10 megahertz of 800 band in Zambia for about 12,000,000. And many other countries, are picking up little, little spectrum where it is allocated and there are no significant cost to attach to it. Other than that, it's a normal licensing and we don't envisage any big expense. Jaydeep, you want to add anything more? No. No. I mean, just to add to what Raghu has said. So we the two license renewal which we have done in Nigeria and Uganda came with the existing license, which we had in Nigeria, specifically 918 band, five megahertz in 915 in 1,800. And Uganda, there is a whole host of different spectrum. We have bought spectrum in Zambia, and we bought some additional spectrum in Chad, something in DRC. And so those are a small spectrum which we got added during the year. Our our spectrum policy remain, as we mentioned in the past, that whenever spectrums are available, the usable spectrum for our network and at a at a reasonable price, we will be taking additional spectrum as we go forward. Great. Thank you. And a second question. Apologies if you do give the information. I've missed it. But on the mobile money side, can you give a split of a split of what's inside that $401,000,000 of mobile money revenue? What's you know, how much of that is sort of withdrawals, p to p transfers, remittances? Could you give a split of what's inside that? And and which bits are growing fastest? Thank you. So actually, we don't give that breakup in our published result. But broadly, can tell you that about 80%, ninety % of the transaction volume comes from the cash in and cash out part of it. And and balance about 20% comes from various merchant payouts, merchant ecosystem, international money transfer, p two p transfers, and so on and so forth. So broadly, that's the breakup. Are they all growing the same same speed? Not go ahead. Well, yeah, cash in cash out growth is a little faster than the rest of the things because as you know that international money transfer, we have we have started launch launching last year around middle of the year. So, obviously, it is taking a little time to get stabilized and then the growth. But by and large, the key growth is coming from the cash in cash out and the merchant. International money transfer has started picking up now. But the growth rates are quite across all the categories. And because of the enhanced distribution model that we have built in, we are also seeing deeper and deeper markets getting penetrated and usage happening there. So the life cycle of usage is that when first customers come in, they start using cash in cash outs. The next step they do is p two p. The third step they do is to pay for services. The fourth, they get into international money transfer, merchant pays and others. So we are seeing the trend across because we are seeing geographical and product penetration in some countries and a spread of customers and growth in the others. So we are seeing see, most of our revenues come from seven countries. So we are seeing growth geographically and service led. Got it. That's very helpful. Thank you. All the best of luck for your retirement. Thank you very much. Thank you. Our next question is from Sunil Rajkopal of HSBC. Hi. I just have one question. Can you elaborate thoughts on the CapEx for the coming year where the CapEx will be most of the CapEx will be allocated towards? And also your perspective about dividends going forward now that the net debt to EBITDA is around two times. How fast will be the acceleration in terms of the dividend growth? Okay. I will cover the first one and I'll request Jaydeep to do the question on dividends. So CapEx, we've been talking of $650,000,000 to $700,000,000 If you see the last four years, Sunil, when you've noticed us, we started modernizing our network. 77% of our network is now four gs, 86% or 85% of our network is already modernized with the new single RAN. So the modernization part is coming down. We are adding a lot more new tons, new tons and extra sites for capacity. Spend that we are going to spend is on fiber and core and the rest of the capacity enhancement especially for data. So this is broadly where we are going to spend the monies on. Modernization will take a little less, site growth will happen and coverage growth will happen. That's what you've been seeing our revenue and voice also consistently growing along with our coverage growth that we've been getting in. Sure. Thank you, Chris. And maybe Go ahead, Sunil. Sure. Maybe maybe on that point in terms of the modernization of the network or fiber footprint in terms of your towers coverage. Can you can you talk about what is the current current level of fiber coverage among the towers? And what is the target that you are looking forward to, say, let's say, say, next three to five year time frame? See, the bigger problem for us in Africa is not the number of sites were covered on fiber, but because of the huge distances, how many new towns we are able to fiberize. So what we are spending a lot of money is more money goes in the huge long distance fiber that we are building across the continent. We are one of the few people who got fiber across our country, from Kenya to Uganda to DRC, going on to the western border of Congo B and Gabon. So a large amount of our fiber spends will go in this. While we start within a city, we will start growing on the network inside. I won't get into the numbers on fiberization at this stage. Sure. Thank you. Thanks, Suneet. So yeah. So, Sunil, on the on the dividend, you know, the stated dividend policy, which was which was published in the half year last year last year when we published our half year result. Board has approved 4¢ as a base dividend and continue to grow on a mid to single digit growth till we bring down the leverage below two on a sustainable manner. So that is the stated policy, and we as as of now, we we follow that policy. When leverage comes down below two, board will have the right to reassess or reconsider the dividend policy when we bring down the leverage below two. But that will will we'll be able to tell talk about as of when that situation arises. As of now, the stated policy is 4¢ as a base dividend, and every year, growth from mid to single high digit over focus over 4¢ per share. Sure. Thank you, JT. Our next question is from Myron Rajaratnam of Medfa. Hi, good afternoon. Well done on a good quarter and the year. It looks like the metrics are all accelerating in the last quarter, the ones that matter anyway. So well done. Radhasa, I've got a couple of questions, but the first one is on mobile money. The cost of remittance, you say one of your charts, Slide 16, that it's 9% of that sample $200 to remit in Sub Saharan Africa. Now that you've launched your own product, what sort of percentage cost is it generally? I mean, a ballpark number, how much is the gap between what was the bank version versus mobile money version is my first question. Thanks. So the 9% is a mixture of what is current, whether cash flows through unorganized sectors, certain banking groups and various other channels. On mobile money, the P2P transfers are much lower than 1%, more like around zero five percent on an average. Country to country, they vary, but it's around 05% on an average. And if you see the cash out charges would be around 1% or 1.2%. So the overall cost will not go beyond 1.5% or two percent in majority of the cases. And in quite a few countries, it is even lower than that. So that is where mobile money comes even for small volumes, it gives a massive advantage. Please appreciate, because of poor banking services and rural and others, if someone had to send, they had to send money through a bus driver or something, where on small value transactions, the absolute amounts will be low, but in terms of percentage, it could cross easily 10 to 15%. If someone were to send $10 they could be giving a dollar or 2. So in that perspective, I think mobile money for low value transaction especially becomes extremely affordable and low cost. Great. Just a question on Rwanda mobile money. I see in the New Year compared to the previous year, the penetration actually went down. So I was just wondering what happened in mobile money there. It normally goes the other way. I mean, all the other areas are growing nicely. I was just wondering what happened in Rwanda. I don't know where you put that. This is one seventeen. Question from. Sorry. Under moderately penetrated markets. Rwanda went from 24.4 to 16.8. Unless Yeah. Yeah. We had okay. What had happened was when we had done this merger with TIGO, Rwanda is a country where we did a merger with TIGO. So we had large number of customers who had dual SIMs and dual accounts. And as the merger integrated and people started giving up one of the SIM cards, that is when we had to we dropped a lot of customer base. That makes a lot of Customer bases have gone off, but the number of double SIMs. Suppose someone had a TIGO Money, TIGO Cash and an Airtel Money. So they dropped out of one of them and Airtel Money started becoming more popular. In that sense, we did lose some customers. Sure. The third question is just generally in East Africa and Nigeria and even the other operations, it looks like the ARPU per customer in dollars is growing well and in excess of what the GDP of the country is growing. So you are getting spend away from other consumption, it looks like. Maybe some thoughts on that and how long runway is this? Because your data is a hungry appetite. People have hungry appetite for data. So how long is the runway for this sort of growth? It's phenomenal. Thank you for this question. This is what my team doesn't want me to answer, but let me give you this real answer to this. The first question you have to understand is why does ARPU go up? First take VOICE. We have even grown VOICE ARPU this year, while we have started moving it over the last few years. Because the average consumption of minutes of Airtel network is about two forty minutes. And the world average is well over five hundred to seven hundred minutes per customer. So that means, with the social infrastructure, social networks of Africa being stronger, there should be a consumption increase. So you can grow voice ARPUs. Second, on the same customer, if data gets added and only 40% of our customers or 38% of our customers use data, they deliver a $2.5 ARPU. So if 40% of my customers use $2.5, that means we get $1 weighted average up. If 20% of our customers do mobile money and they deliver $1.5, you get another $0.15 up. So it's a mixture weighted average mixture is what you see the ARPU growing. The second reason you have to ask yourself is where is this ARPU coming from in the overall economy? What are we replacing? We are replacing physical travel. We are replacing lack of information and costlier modes of information. So instead of during COVID time, instead of going to my neighbor's house for a chat, I pick up the phone and talk. So what you're replacing is real physical world communication, and that market is so humongous. Telecom is still less than one and a half, 2% of the GDP. So I think the potential to grow telecom, even if we take another 1% or 2% from transport or sheer expansion of communication that goes up, the potential for growth is humongous. Thank you. And last question, I'm sorry, I'm holding it up. Fixed wireless products are popular in certain countries and with no fiber equivalent. What's the potential and the capacity for your networks to offer a fixed wireless product in some of your big jurisdiction? And thank you so much for answering the questions. So the key thing is to build huge capacities because fixed wireless goes at a much lower price and huge consumptions because of home broadband and others. So what we need is enormous amount of spectrum. Countries where we picked up 2,600 spectrum, like Nigeria, Uganda and a few more, is where we are able to get 20 megahertz of 2,600 huge capacities on the towers, that is where we are able to drive home broadband much better. Otherwise, it clashes with the mobile consumption and hence we are not able to expand fast enough. So as J. Deep said, we are continuously on a lookout to get high frequency bandwidth, which is high capacity, 2,600, 18 hundred capacities, so that we can launch more and more countries with fixed broadband. Even in countries where there is fiber, please understand the fiber is there in a few affluent localities or areas of even the big cities. You go into the suburbs, you go a little far off, you don't have fiber coming into every house. So a student in a hostel would like to use fixed wireless broadband through a router or through a WiFi device. So it is not that where there is wired business that you don't have a penetration, but it is more about how we can create enough capacities to drive this business. Thank you so much. You explained things so well. Thanks again. Thank you. We have a follow-up question from Sunil Rajgopal of HSBC. Hi. Just a follow-up on Nigeria. What has been the progress in terms of the PSP license discussions? And also the new with the any any thoughts on when the new SIM registrations will open up again? Because I think there has been an extension to the deadlines. So any thoughts on that? Thank you. Firstly, on the payment service bank license, COVID period has actually told the government that it is so essential to have a good mobile money service. And surely Nigeria doesn't have one and I'm sure the authorities do believe that it is required and we are hoping to get it at the earliest, but I have no timelines at all. I know we've gone through a few meetings like this where I have no answer. Now coming back to the NIN registration. What has happened in December, government has said you cannot acquire and you have to verify all your existing customers and connect them to an existing NIN. Obviously, the number of registered NINs are not enough, so we have started getting people to register on their NIN. What needs to be done is now this NIM collections, have almost collected for 65, 70 percent of our customer base, but they have to be verified against a government database, which is taking difficulty because of the huge volumes. Technically, are not ready to do that yet. So that verification of the current customer base has got shifted to June, number one. As regards the gross adds, gross adds had also new customer acquisition and also got stopped in December. But however, during the April, it got opened up. But the government and the regulator have been very restrictive in that and asked us to operate these new customer additions, not from sales force on the ground or small traders, but actually through our own stores. So we have submitted these own stores for registration and once each store is approved that is when you start doing gross adds. We are already doing, we have started gross adds from the April and slowly expanding these gross add acquisition along with NIN registration also that we are able to do in our own stores now. So it's a much tighter distribution base from where we will be doing these, but it will be of a very high quality as guided by the government. We are working actively with the government to both on the old customers and also on the new acquisition. Sure. Thank you. Our next question is from Deep Sharma of RMB Morgan Stanley. Guys. Thank you for the opportunity to ask the questions. Raghu, if I may, probably, you know, more go into the next year. So we had lockdown in the base in second quarter, and then, you know, we have seen, you know, second quarter, what I mean is of the year. And then you you've seen kind of, you know, this tremendous growth coming through. I think more from a base effect perspective, you know, it will there be a higher base, let's call it, for the second half of last year? You yourself have mentioned you've started growing 20%. Is there kind of a COVID benefit that is inherent in this kind of last two quarters which potentially might not continue? Do you think that? Or, you know, this growth is kind of here to stay and, you know, cons consumers getting used to that data and that voice, you know, that they are using and you believe that, you know, the the growth rates probably will be sustained? So let us look at our growth rates. You know, I've been saying this from before the IPO that Africa should surely grow in double digits. Voice has to grow in mid single digits. Data and mobile money grow in 35, 40 percent growth. The beauty is about three years back, mobile money and data together used to contribute 23, 20 four. So if you grew 30% on 24%, you got 7% growth on an weighted average. Today, mobile money and data are contribute 40% of our business. And if they grow at 35 or 40%, because we've expanded our data footprint and increased our four g coverage and mobile money expansion, if you get 40% on 40% growth on 40% of your base, then you get a 16%. So as the growth engines of mobile money and data grow, you are getting a bigger and bigger jump. Surely, have benefited. In the first few years, in the last five years, we spent a couple of years strongly on modernizing our networks and building four g in the large cities. Today, are able to move, as I was explaining earlier question, that we are able to add lot more newer towns and newer markets. COVID, of course, has been helped by people talking more, but I think it's a lot more longest trend than just COVID. Because the lockdowns are not so severe today and people are able to move reasonably well for it to have such a big impact on our consumption. But I think it's a longer trend that you are seeing in Africa. Today, we cover about seventy five percent, seventy six percent of the population coverage in Africa. Imagine if we can take the seventy seven percent to say about a ninety percent in the next few years. You will get something like 16% growth, four years. If the population, which is a youth population is growing, you will get a growth. If the population growth of Sub Saharan Africa is 3% a year, that will add up. So I see this runway for growth a little longer than a temporary blip because of COVID or anything like this. Thanks, Sadhu. Thank you so much. Our next question is from Tracy Kurunya of SDG Securities. Thank you very much for the opportunity to ask questions. A couple of questions. First, to start with Mobile Money. While the growth was very strong on a year on year basis, looking at sequential quarterly performance, Mobile Money revenue was actually flat. And I could see that in East Africa, revenue Mobile Money revenue was down 1.2% quarter on quarter. So I just want to understand if the dynamics of usage are changing? Or is this a one off thing that we might expect to normalize in consecutive quarters? Second, in terms of CapEx for mobile money, well, it's not as high compared to the rest of the spend. It was still up quite significantly in the year. So I just wanted to understand first what the CapEx consists of? And second, how we should be thinking about that going forward? And then lastly, just some explanation behind the weakness in voice revenue on a quarter on quarter basis, but I'm talking December to March for East Africa, seems to have gone down around 6%. Thank you. Okay. So the first two or three things we have to note is, for me, if you see both voice and even money, quarter on quarter, a couple of countries that we had elections and lockdowns have been severe. So there has been a blockage of this services for a while. And I think that has cost us for a reasonable, not getting the growth very high on a quarter on quarter basis. The same I would see is for voice in the East African continent, East Africa part of our business. So wherever there have been mandated lockdowns, we've had a slowdown, but I do not see that as a trend. Technically, if you see our overall growth for the quarter, there are a couple of points growing across Africa for quarter one over this quarter, last quarter over the previous quarter. If you see the last five years, we used to come in this quarter four actually with a negative growth of minus 2% or minus 1%, which was slowly started moving with expansive networks, good customer additions, and our simplified pricing, we've been able to start moving towards positive. So I would not really be overly concerned around that. As regards the CapEx, J. D. If you could So before before CapEx, I just want to add the one more point what Radhu has said. Obviously, we we published absolute quarter four and quarter three number on basis which you are seeing practically no growth. But we have to keep in mind that there are two days less in quarter four. And, therefore, if you normalize that, the actual EDB growth, equal day basis growth quarter over quarter is 3%. It is lower than last quarter, but it is not that that there is no absolute growth. That's number one. Number two, on your question on CapEx, as you know that we are in the process of separating Airtel Money entity in each of the opco. Earlier in many places, the Airtel Money was part of the normal mobile services or GSM business as we call it. So as we split the operation and the new entities are created, obviously, there is a onetime shift of CapEx. And this is the CapEx of basically the kiosk and Airtel money branches and whatever money we spend on the on expanding our exclusive distribution network. So that has come in this quarter, and that's why you are seeing a a significant jump. But this is actually accumulation of or other, I would say, reclassification of the CapEx into Airtel Money entity, where earlier it was sitting within GSM business. If you normalize that, that's about $2,021,000,000 dollar. If you normalize that, the for the quarter actual CapEx is about $4.04, $5,000,000, not more than that. So that that is that is consistent Consistent with with our with our past with the past Airtel money CapEx spend. Our next question is from Philippe Kopp of Maltenberg Capital Limited. Seems there is no response from Philippe's line. Pierre, can I hand over to you for the webcast questions? Hi, Judith Raghu. There are a couple of questions from, from the participants via the webcast. One question is on, Ethiopia and is whether we are interesting to bid for a license in Ethiopia or interested in making an offer for the 35% stake in Ethiopian that will be for sale? And the next question is, well, some guidance on whether or not there are some more license cost renewal over the next two to three years that are new. Okay. I'll answer the first and I'll request Jaydeeb to answer the second one. I've stated before that currently, you see our own 14 country operation, while we are a $4,000,000,000 business, we feel that the top four countries, we are not a market leader, which happens to be in terms of population top four, which is Nigeria, DRC, Tanzania, and Kenya. We see ourselves having a huge runway for growth. We believe that we have done a very good job on modernizing our networks and investing very strongly in taking digitalization in this continent. And we think there is a lot more to grow and invest in this part of in our 14 countries. So currently, we are not looking at Ethiopia. We think there is enough potential for us to grow in our 14 countries. Jaideep? Yeah. So in the next two to three years, there is one renewal which will fall due in Nigeria, which is for 2,100 spectrum. That is falling due in somewhere between '20 FY 2223. So that will come for renewal. Apart from that, in between in this period, there will be Kenya license renewal, which will be coming up. So apart from these two, there is no other significant license renewal or spectrum renewal which is falling due. Thank you, Jidepe Erabhu. Two more questions. One is, what are your thoughts about the recent placement of shares, which was made by one of the some pre IPO investors? And the second one is, what are your thoughts on the current share valuation for the company and whether we are at you're at whether you think that it's it reflects your earning growth potential or not? Pierre, if it's okay, would you be the best person to answer this? I I'm happy to do so. Regarding the first question on the placement of the of the share, obviously, the company has, has no control over over that. But the investors, particularly the pre IPO investors in general, have been very supportive of the stock. And actually, by doing this placement of shares, over time, this will be beneficial and accretive to the share price performance because it will add more liquidity to the stock, something that the stock has been suffered a little bit since since IPO as as you are all aware. So medium term, these are positive catalysts for the share price performance because we allow better liquidity for the stock on the share price. In terms of the share price performance, I believe that there is no management in the world that will say that they're very happy about where the share price is and there is no upside to it. Obviously, we do believe that we do believe that as well. In particular, I think in our case, you know, if you do the sum of the parts valuation of our two business components, which is the mobile money and the GSM the GSM services, you know, most recently, minority investments in mobile money have kind of crystallized a potential equity value of $2,650,000,000 just for that business. You clearly see that, you know, there is a feeling that particularly the GSM business is undervalued. So if you do the sum of the parts valuation, we believe that there is there should be upside on current valuation on where on where the stock is. But, obviously, that's up to to you investors to to also understand that and realize that. Our job is to try to help you to help you in in doing that. But I believe, and we do believe that there is there is potential upside. But, Gini, Perugu, if you need to if you want to add anything else to this. No. Nothing to be added from my side here. I think you explained it well. Thank you. I believe there are no more no further questions. Irene, maybe we can we can close. Thank you, sir. And thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect your lines.