Airtel Kenya is contemplating exiting from Kenya where it is the second largest operator, Rwanda and Tanzania markets and is in active discussions to explore a mix of an intra-country sale, a purchase or a merger.

The Sunil Mittal-led telco is also looking at monetizing more tower assets in five non-profitable markets, a move that would help reduce leverage and boost margins in Africa analysts said.

“Such asset sales could help Airtel reduce leverage further and potentially help expand margins,” said brokerage Goldman Sachs, adding that “the three countries where Airtel is looking for exits have margins significantly lower versus the current Africa average”.

Separately, analysts said if Airtel stated interest in buying 9mobile (formerly, Etisalat Nigeria) – the fourth largest mobile carrier in Nigeria, it would become the largest telco by subscribers in a market that is Airtel largest in Africa and generates 30% of its revenues in the continent.

“We take no view on a potential transaction, but a simple sum of the respective market shares of Airtel and 9mobile would suggest a number one operator in Nigeria by subscribers, slightly ahead of present market leader MTN,” Goldman Sachs said.

READ: Airtel Kenya Drops Roaming Rates in Uganda by Up to 78%

At present, Airtel is the third-largest telco in Nigeria with a 25% subscriber market share, while fourth largest, 9mobile has 12%. If Airtel were to acquire 9mobile, its customer market share at 37% would be a tad higher than MTN’s 36%.

According to analysts, although the Africa operation has historically been a drag on Airtel, over the past 3-4 years, the Sunil Mittal-led telco has divested $3.3 billion worth of assets, “which has helped reduce Africa debt levels by as much as 40%”.

In September quarter, the telco reported a profit of $48 million in Africa compared with a loss of $91 million a year ago, helped by growth in data customers and consumption, and stringent cost controls.

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