Connectiva may ink software deal with Bharti
Connectiva Systems, which sells software solutions to help mobile phone companies plug revenue leakages and track customer preferences, has hinted that it will ink a multi-year revenue management software deal with Bharti Airtel for its African operations, spanning 16 countries.
If the deal goes through, Connectiva Systems will deliver a mix of fraud control, revenue assurance and customer experience management solutions to Bharti.
The company has in the past delivered telecom software solutions to Kuwait’s Zain. Zain’s African assets were acquired by Bharti Airtel earlier this year. The revenue management software vendor will also work closely with IBM, which recently inked a $1.5-billion outsourcing deal to manage Airtel’s IT requirements in Africa.
According to Connectiva Systems founder Avi Basu, Connectiva Systems is in advanced talks with Bharti Airtel. Since the company has an existing relationship with Zain, they have a broad understanding of their worldwide telecom networks. They are also looking forward to work closely with IBM, which is one of existing strategic partners.
Connectiva is owned by key US VCs like Ovation Capital, Carthage, Vinod Dham’s Indo-US Ventures and IFC-Washington.
The company’s objective would be to optimize the revenue management of Bharti’s African operations. They are also looking at customer experience management software modules that can help mobile phone companies track high-end customer’s VAS/data service preferences in a 3G scenario, he added
Bharti Airtel’s African operations need time to break even – chairman
As per the Chairman of Airtel, the company’s African operations will need time to break even. Airtel is India’s top mobile-phone operator by subscribers. However, he did not provide a timeline for when the African operations would achieve break-even.
Bharti Airtel, which had acquired Kuwait-based Mobile Telecommunications Co.’s operations in 15 African countries in June, had posted a 27% drop in its consolidated net profit for the quarter ended Sept. 30, decreased mainly by higher costs and taxes related to its Africa acquisition.
The company had recorded a loss of US$0.02 billion on revenue of US$0.86 billion from Africa in the July-September quarter.
Bharti plans to pay 10 % of Zain loan
Bharti Airtel has announced that it will consider prepaying up to $900 million of the debt it lifted while acquiring African operations of Zain telecom in June this year.
The total cost of the Bharti-Zain deal was US$10.7 billion, which included an equity value of $9 billion and $1.7 billion of consolidated debt obligations.
Originally, 11 banks led by Standard Chartered Plc, had underwritten the $7.5 billion loan from different banks to finance the acquisition of Zain.
As per the Company’s spokesperson, Bharti had entered into a long-term financing arrangement with flexibility of prepayments built-in as part of the loan agreement. Bharti always had the option of prepaying based on its cash flow. The company has seen significant free cash flows over the past few quarters and they feels this is right time to use these and other related means to optimize the mix and cost of financing . Airtel will be making a prepayment of $800-900 million in this quarter.
Bharti Q2 consolidated net drops 27% (India)
Bharti Airtel has announced that the consolidated net profit for the second quarter ended September 30, 2010 dropped 27% to US$37.41 million compared to last year. Total income rose to US$343.06 million from US$ 234.18 million in the same quarter last year.
Bharti’s results included its new African operations that it acquired in June from Kuwaiti telecom group Zain for US$ 9 billion to become the world’s fifth-biggest mobile operator.
On a standalone basis, the net profit for the second quarter ended September 30, 2010 fell to US$47.30 million from US$51.73 million in the same quarter last year. Total income increased to US$209.91 million from US$201.06million in the year ago quarter.
The effective tax rate in the second quarter increased to 25.5% from 10.6% in the corresponding period last year and 18.1% in the previous June quarter, mainly as a result of taxes in its Africa-based operations.
Bharti Airtel appoints Two Executives to African Operations
Bharti Airtel has announced the appointment of two executives to guide its network and internal assurance functions across 16 countries in Africa. Ms. Tay Kim Lee joins the group as the Director of Internal Assurance while Mr. Eben Albertyn will take up the Chief Technical Officer (CTO) role.
According to Mr. Manoj Kohli, CEO (International) and Joint Managing Director, Bharti Airtel, the company intents to provide affordable and innovative mobile solutions in Africa will be backed by the passion and wealth of experience from the leadership team the company is attracting and nurturing. Company’s appointments are a testament of their commitment towards the goal of providing unrivalled telecommunications services and building a world-class organization in Africa. The two new leaders, Kim and Eben, will definitely add impetus to the leadership team, having gained high level global experience in diverse markets in Asia and Africa. Their expertise will also tap into existing talent and create the skills within their teams, which all successful brands require.
Ms. Lee has a capital experience in the financial and telecommunications sector with organizations such as Pricewaterhouse Coopers (PwC) and Singapore International Group (SingTel), a strategic partner of Bharti Airtel.
Mr. Eben Albertyn, an engineer by training, brings to Airtel a deep understanding of the dynamics of the African telecommunications sector, having worked with a leading pan-African operator across the continent. He will be charged with instituting and maintaining a robust network enhancement plan in line with the next evolution in network systems.
As Internal Assurance Director Ms. Lee will play an important role in enhancing the control environment and corporate governance processes whilst identifying opportunities and implementing action plans to ensure efficiency of services.
Bharti to outsource customer support for African operations
Bharti Airtel who in recent times outsourced the IT supplies for its Africa operations to IBM, is now close to finalize a deal to outsource its customer support services.
According to sources, if this deal takes place it could be a landmark in the African continent, where customers support is limited and rarely outsourced. Some of Bharti’s existing back-office suppliers in India as well as IT biggies such as Tech Mahindra and IBM are opposing for the contract.
Bharti’s back-office suppliers in India are Firstsource, Aegis and IBM.
According to another source, the bids for back-office services were requested for 15 countries from Firstsource, Aegis, Spanco, IBM and Tech Mahindra. The deal was to be finalized last week but has been delayed. The outsourcing of the back-office operations along with IT will play a key role in making Bharti competitive in Africa, where it has already adopted aggressive customer-acquisition strategies such as lowering of tariffs.
The contract value is expected to be small to start off with — around US$100 to US$ 150 million — and will gradually grow, along with Bharti’s own growth in the African market.
The contract for customer services will be the first of its kind in the African continent where the back-office processing industry is still in the early stages of evolution. In many African countries, the concept of customer service itself is non-existent.
According to an executive with one of the bidders, the Mobile phone penetration in Africa is higher than in India but even in the telecom segment subscribers usually have to go to an outlet if they have query or complaint.
As per the sources, there are no African companies in the fray for Bharti’s contract because the players do not have the scale that Bharti wants. But Bharti is likely to have more than one provider for its back office services similar to what it has in India.
The challenge for the service providers bidding for Bharti’s contract would be a highly fragmented African market and limited knowledge of local market conditions.
