We deep dive on African Telco’s Fintech valuations in this note which is a follow up of our higher-level note Show me the (Mobile) Money. African Telcos are becoming more active about unlocking value from Mobile Money (MoMo) with MTN’s recent deal with Mastercard and now rumours that AAF is looking to IPO its MoMo business. Global Fintech/Payments multiples have derated over the past couple of years, but we continue to see great value in the African Telco’s MoMo assets which remain one the key n...
India’s telecom industry continue to grow in the HSD, with Bharti and Jio improving at the expense of VIL. Industry ARPU tracked MSD again even without any meaningful tariff hikes; we expect increases to be put through in 2H CY24 though that has largely been priced in. EBITDA continue to trend ahead of topline, with YoY margins improvement across the board. Earlier last month, the government also approved the auction for 10,523 MHz of spectrum which starts from INR 963bn (USD 11.6bn). However, w...
Short Shots is a collection of technically vulnerable charts culled from the Negative Inflecting and Toppy columns within our Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.
This is the 3rd in a series of notes looking at FWA (see HERE and HERE). Like us, the market appears to be getting more bullish on FWA in EM, and a series of events such as Jio’s launch suggest FWA could be a significant use case for 5G in Emerging Markets.
Vodacom reported a mixed set of results, service revenue came in in line with consensus but EBITDA and HEPS missed. Revenue trends in SA slightly improved in Q2 vs. Q1 but trends in International slowed. EBITDA trends (on a normalised basis) slowed in H1 24 vs. H2 23 but EBITDA performance is expected to be better next semester.
India’s telecom industry continue to grow in the HSD, with Bharti outperforming on mobile service revenue growth on a YoY basis again. Whilst Jio posted better net additions, its ARPU trend was softer. Bharti’s Enterprise business did slow down however, largely a function of the deferred spending by global OTT players driven by current global macro.
The environment remained tough for the South African operators in the first half of 2023. Loadshedding was high and impacted revenue (especially voice) and increased opex. Market service revenue was sequentially stable (up 1.6% YoY in H1 23), but EBITDA growth and margins deteriorated as telcos turned to backup batteries and power generators, and additional security solutions.
Jio in India has announced the commercial launch of JioAirFiber, their 5G FWA service. The start of the service by the leader in the world’s most populated country is likely to be game-changing for global FWA subscriber figures and is consistent with Reliance’s target of 100m FWA customers in the medium term. Thoughts and implications below.
10 days ago MTN announced it would not be renewing a contract for 2,500 tenancies with IHS in Nigeria. This is a global first in the Towers space we believe (a financially healthy operator choosing not to renew an expiring tower contract).
MTN has reported a solid set of Q2 results. Group service revenue trends were stable while EBITDA trends accelerated. But the key announcement today was that of a commercial partnership through the signature of a MoU for a minority investment with Mastercard on the fintech side.
Strong momentum in Retail and Jio continue to offset O2C revenue decline, which was function of a high comparable base driven by high fuel cracks as a result of the Russian-Ukraine war. Despite overall revenue decline, EBITDA continued to grow on higher margin mix within Jio and efficiencies within Retail.
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