Good day, ladies and gentlemen, and welcome to the Airtel Africa Q1 Conference Call. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal for an operator by pressing star then zero. Please note that this call is being recorded. I'd now like to turn the conference over to Segun Ogunsanya. Please go ahead, sir. Thank you for joining us on today's call. I'm joined on the line by our CFO, Jaideep Paul, and our Deputy CFO and Head of Investor Relations, Pier Falcione. We're going to be answering your questions, but first I would like to provide you with a brief overview of the quarter, our first quarter. We have posted very decent growth overall, with group revenues reaching $1.257 million, giving us a year-on-year constant currency growth rate of over 15%. When accounting for the specific challenges from call barring in Nigeria and the loss of tower sharing revenues from Portugal that we saw last year, the organic underlying growth is actually closer to 19%. Despite the inflationary challenges, we continue to improve our EBITDA margin to 14.8%, giving us an EBITDA for the quarter of $614 million, which is up 15% year-on-year. Before I give the segment performance, I'd like to share the overall performance in each of our three regions with you. Total revenues across both mobile services and mobile money in our largest segment, Nigeria, grew by 18.3% and by 14.1% in East Africa and by 11.7% in Francophone Africa. This year, we began reporting our business performance through four operational segments. All our mobile money activities are now reported as a separate unit, with the performance of our mobile services continuing to be reported through our traditional regional segments of Nigeria, East Africa and Francophone Africa, but we now exclude our mobile money activities. We have delivered very strong revenue growth and profit progression across each of these reporting segments, despite the headwinds around call barring and shared tower revenues previously mentioned. Mobile services revenue across the group grew by 14.2%, and all of our regional segments for mobile services posted double-digit revenue growth rates. Nigeria did 18.3% year-on-year for this quarter. East Africa grew by 11.1%, and Francophone Africa grew by 10.6%. Let me share the performance of our key mobile services with you. Across the group, voice revenues grew by 11.3%, data revenues grew by 19.8%, and other revenues grew by 10.4%. I'll add some flavor to these in a moment. Mobile money revenue grew by 26.5%, driven by growth of 26.9% in East Africa and 25.4% in Francophone Africa. We're just starting the mobile money business in Nigeria, so no figures to report for now. Our total customer growth rates are increasing steadily. They are up by almost 9% year-on-year to 131.6 million customers. We added a total of 3.1 million customers across the group in this quarter. This is one of our best sequential customer growth rates for some time. With majority of the growth coming in Nigeria and East Africa. Our group voice revenue growth of 11.3% reflected year-on-year customer growth of 8.9% and a voice ARPU growth of 1.8%. We remain very confident that the low unique customer penetration levels across our footprint in our 14 countries, combined with severely low minutes of usage, mean there remains a very long runway for voice revenue to continue to grow. On data, our group data revenue growth of 19.8% was a function of good customer growth rate of 9.7%, supported by data ARPU growth of 5%. This is slightly lower than recent historical growth level compared to recent quarters. Our current data revenue growth is very low, largely due to a slowdown in the growth of data usage per customer, as well as higher churn rates, particularly due to the main issues we're facing in Nigeria, as well as a low ARPU in a couple of countries. Other revenues grew by 10.4%. This is in spite of the sale of our towers in a few countries, where we stopped accounting for $7 million in tower sharing revenues. Now on mobile money. We posted solid metrics. Our Q1 revenue growth of 26.5% year-on-year. In terms of the transaction growth, 26.1% and active customer base growth of 19.7% with ARPU growth of 5.9%. While it seems strong, this quarterly growth rates remain slightly impacted by the reduced usage effect of e-levy in Tanzania sometime last year, middle of July last year. Fortunately, the effect of those are now over. The continuing of our revenue growth through the margin improvement reaching 14.8% this quarter, which is up 17 basis points over Q1 of last year. Inflationary effects, particularly on fuel, are having an effect. Our focus on cost reduction and operating efficiencies is helping support margin resilience. Foreign exchange changes had an adverse impact of $23 million on constant currency revenue and $8 million on underlying EBITDA for the quarter. This is largely driven by devaluations of the Central African franc by 13.2%, the Nigerian naira by 1.8%, the Kenyan shilling by 8%, and the Malawian kwacha by 11.2%. Partially offset by appreciation in the Zambia kwacha of 23.4%. In terms of balance sheet and cash flow, at the end of June, our leverage ratio was 1.3x underlying EBITDA. Our net debt was just over $3 billion. In Q1, we generated operating free cash flow of $470 million, which is about $44 million more than in Q1 of last year. This is largely due to the growth in EBITDA. After the quarter ended in July, we announced the settlement of a cash tender offer to redeem $450 million of the $1 billion of 5.35% senior notes that are due in 2024. We paid $462.6 million out of our cash reserves to complete this early redemption. We continue to execute on our strategy to reduce personal foreign currency debt at group levels. There are a couple of other strategic and operational announcements to highlight this quarter. Perhaps the most significant recent news item is the operationalization of Mobile Money in Nigeria in this quarter. This follows the licenses we received for both Payment Service Bank and Super Agent. We're now gradually rolling out the service capability across Nigeria, and we are very encouraged by the progress we're making. Still on Nigeria and turning to the NIN-SIM linkage challenge. We have collected information for about 40.7 million active customers. Revenues for these active subscribers who have not yet linked their NIN with their SIM amount to about 7% of total revenues from Nigeria and about 3% of total revenues for the group. As we expected, SIM registration has accelerated, and we're seeing some SIM consolidation in response to the implementation of the policy of the federal government not to allow those with no means to make phone calls. We've also made some additional spectrum acquisitions. Recently, with 15 MHz in DRC and 16 MHz in Kenya. These additional spectrum licenses provide significant capacity for continuous strong data growth. It supports 4G expansion for both mobile data and fixed wireless home broadband capability, while allowing us to roll out 5G in the future. As expected, we reported some addition this quarter in the growth trends for both data and Airtel Money. We remain mindful of the global inflationary impact on our cost base. Nonetheless, we are very confident of sustaining healthy growth ahead of the market and of demonstrating EBITDA margin resilience this year. Longer term and more fundamentally, the opportunities for sustainable profitable growth that stem from our underpenetrated markets for mobile voice, data, and mobile money services remain very attractive. We are confident of continuing to deliver on our growth strategy. With that, I would like to open the line for questions for which I'm going to be joined by Jaideep Paul and Pier Falcione. Operator, I now hand over to you to please open and manage the Q&A session. Thank you. Thank you very much, sir. Ladies and gentlemen, if you would like to ask a question, please press star then one on your touchtone phone or on the keypad on your screen. If you'd like to withdraw your question, please press star then two to remove yourself from the list. Again, if you would like to ask a question, please press star then one. We will pause to see if we do have questions. The first question comes from Jonathan Kennedy-Good from J.P. Morgan. Please proceed, Jonathan. Good afternoon, and thanks for the opportunity to ask questions. Couple from me. Just on Nigeria, have you managed to extract cash dividends from the country in support of the debt repayment you just made? So that's question one. Question two on the margin compression in Nigeria. Can you give us some color as to what drove that? My sense would be that, you know, lower voice growth together with, you know, fuel prices passed on from the tower companies may have driven this. Just wondering if there's any kind of marketing cost associated with the Airtel Money launch in that number as well. Finally, if you could give us a view on what a 10% move in the naira and the fuel costs would do, and how those would impact margin. If you do know those kind of metrics, that would be helpful. I'll take the first two questions, and Jaideep would talk about the 10% movement in the currency. In terms of cash extraction from Nigeria, we managed to repatriate about $150 million-$160 million in the last quarter. We continue to find ways of taking money out of Nigeria wherever possible. Also remember, we do have a very huge requirements for naira in the country. Nigeria is our largest market. We continue to invest in distribution, in network. We continue to buy spectrum. Whenever possible and desirable, we do take money out, but we still have a very huge requirement for naira, given that it's our largest market. On the margin compression, it came mainly from fuel. That's the main driver. We've had increase in fuel from about 300 NGN to about 700 NGN. More than 100% increase in price of fuel. That's the major driver of the compression you see in the margin for the group, and it's been driven by what is happening in Nigeria. Jaideep Paul, you want to explain the 10% movement in currency and the impact on results? 10% fuel price increase in Nigeria has an impact of margin reduction of approximately 1%. See, overall at Africa level, the impact is about 1%. In fact, what you see for Nigeria, the margin has gone down from about 54-55 to around 52. This entire impact is coming because of the fuel price increase. At Africa level, overall Africa level, that impacts about 1%. Just to support what Jaideep Paul has said, we continue to work with the power companies to manage the impact of fuel on our business in Nigeria. We're working with them to move some of the energy sources from diesel to battery power and to solar power. We also worked out, I mean, some sort of cost sharing arrangement with them that will minimize the total impact on us in the spirit of a partnership. Some of those have helped mitigate the full impact of the increase in the price of diesel on our business in Nigeria. Not only in Nigeria, by the way, a few other countries in East Africa do experience this increase in fuel costs. Fortunately in those countries, we are less dependent on diesel power than we are in Nigeria because the grid is quite available in those East African countries. Great. Thank you. If I may follow on, the cash that you took out of Nigeria, what rate did you get that out at? Traditional market rates. I mean, what is usual in the market, yeah. Okay. That's kind of the Central Bank rate around 4.20%. Yes. Sorry, Jonathan Kennedy-Good. No, given that in the quarterly reporting, we don't provide market rates for specific structure that we use. Okay. It's not the 420 market rate for the CBN. Great. Thank you. Thank you. The next question comes from Madhvendra Singh from HSBC. Please proceed, Madhvendra. Yes. Hi, thanks for taking my questions. I think didn't hear the FX rate, you know, quite clearly. The line isn't that great. If you could repeat what was the average FX rate for the cash upstream from Nigeria? That's just a follow-up. Then, you know, my couple of questions. Firstly, on the Nigerian SIM NIN registration issue, it seems like there is a bit of a slowdown in terms of registering those SIM cards. You know, the exposure still is at 7% of the overall Nigerian revenues. You know, that's the number I think we heard, you know, even during the last announcement. If you could shed some light on whether there has been a slowdown in the registering those unregistered SIM cards in the recent period, and what does that mean for the Nigerian revenue outlook. That that's the first question. Secondly, overall group data revenue growth of just shy of 20% in the latest quarter. You know, what's your view on that? Are you happy with this growth rate in data revenues? Is there any specific reason, you know, why it has gone below 20%? Would you expect it to accelerate in the coming period? Thank you. Thank you. Let me start with the NIN issue in Nigeria. I'm just going to give you figures, and we'll now discuss what the figures mean. In terms of numbers, we barred about 13.6 million customers when the instruction came for us to stop them from making outgoing phone calls. These people are still able to send SMS and able to have a data session. 13.6 was barred. Out of the 13.6 million people, about 5.3 million submitted the NIN subsequently. 8.3 left that never gave us the NIN, so we've not been able to reconnect 8.3 million customers to full services. Out of the 5.3 million customers who submitted a NIN, we've reconnected about 2.5 out of them. The balance again, when the NIN came, the NIN were found not to be correct. This is not unique to us. I believe it's an industry problem, that when the NIN are finally submitted, we're able to verify that they're right NINs. Only about 2.3 customers out of 5.3 who submitted the NINs, we finally onboarded for our services. That's where we are. We've seen some SIM consolidation across the country. Traditionally, people do have one or two, three SIM cards, so I believe some customers are choosing to transfer usage to their primary SIM. We've also seen increase in ARPU coming from customers who transfer usage to our network anyway. We're gonna watch this for the next quarter and we would be able to come back with a more definitive answer as to whether we're gonna be able to get these customers back or not. It is a very unfortunate situation. We're managing it. We recognize the need for this to be done by the government, given security concerns. We continue to work with the regulators to make sure we arrive at a solution for everyone. In terms of the data revenue growth, yes, is marginally lower than what we're used to. Two clear reasons for this. One is still NIN-SIM in Nigeria. We lost some churn, meaning those customers that we barred from using voice services, they also stopped using the mobile data services. That affected the data revenue. We also made some changes in pricing in the Francophone countries to just make data services more affordable. We have adjusted prices of some of our bundles. Finally, in a few countries in East Africa, we responded to competitive pressure by lowering prices to maintain our franchise. Those are the three clear reasons why we saw slower growth in data revenue in this quarter. Madhvendra, do you have any further questions? I just wanted the clarification on the FX rate used for upstreaming the cash from Nigeria, if you could share the average rate. Yeah. Jaideep, why don't you? Yeah. We mentioned in the previous question that we'll not be able to give you the exact rate. Obviously, it is not central bank rate. We have used many instruments and options for upstreaming the money. We'll unfortunately not be able to give you the exact average rate or, you know, any specific answer for that. Okay. Thank you. Thank you. The next question comes from Cesar Tiron from Bank of America. Please proceed, Cesar. Yes, hi. Thanks for the call and the opportunity to ask questions. I have three questions, please. The first one would be on the deceleration of revenue growth in Nigeria by about 600 basis points versus the previous quarter. How much of that deceleration do you attribute to the NIN registration? And why do you think you haven't seen a significant pickup in data growth to offset some of the issues with the voice blocking calls? That's the first question. The second question would be on the margin pressure on Nigeria. Of course, you said that this is because of the fuel cost. I just wanted to understand what level of fuel cost does your Q1 Nigerian margin price in? Basically, another way to ask the question, how much delay is there from the power operators passing on to the company the increase in fuel costs? Therefore, is your Q2 margin gonna be lower than the Q1 margin in Nigeria? The third question. Sorry, I just have to go back on this FX rate, you know, that is used to upstream cash from Nigeria. I think we do need a little bit of guidance from you because I think, you know, the calculation is very easy since you know, you are seeing the number of dollars that are being upstreamed from, you know, from the country. You know, we can't guess this number. You know, there's a parallel market rate, which is close to 700 and a central bank rate, which is very close to 420. I think if you're not disclosing the number, you know, we should probably then conclude that the number is very close to the parallel market rate. I do think we need a little bit of help from you on that. Thank you. In terms of the rate, it's not close to parallel market rate. It's NGN 700 or so today from what I gather. We don't watch the parallel market rate. I can confidently say to you that we've not repatriated dividend or money as parallel market rates. To your second question on the deterioration in revenue in Nigeria, which you grew 8.8%, by the way, it's a decent growth figure. If you normalize this with the loss of voice revenue, it's approximately $10 million. That's what it is, $10 million per month. That's the only reason why the growth rate went down to 18.8% from about 24% in the previous quarter. All the losses came from the voice revenue that we lost from the NIN-SIM impacted customers who couldn't make phone calls. Data revenue growth picks part of this up, but just wasn't sufficient to return us to our traditional 24%-25% growth that we've seen in Nigeria. On the fuel impact, we have two major partners for power companies in Nigeria. One of them is in the first quarter, the other is second quarter. What we've done again is to work with these two partners to make sure the impact is not completely passed on to us. Three things we've done with them. First is to renegotiate how much of the fuel increase is gonna be passed to us. In turn, we offer some guarantees of additional sites that we've concluded with one of the partners. The second thing we've done is to actively encourage the conversion of some of the new sites from diesel power to green power sources, to solar, and in some instances, increase the level of battery power that is sufficient to cater for outages. Those are the two things we've done, and it's minimized the impact of the fuel, I mean, on our bottom line. We've also looked at some other expenses, some of the similar expenses that we've taken out. These are expenses that do not impact our growth and revenue. It's a tough one. It's just impossible to completely offset the impact of 150% increase in the price of fuel. Great. Thank you. Thank you so much for your help. Thank you. Ladies and gentlemen, just another reminder. If you'd like to ask a question, please press star then one. If you'd like to ask a question, please press star then one. The next question comes from Myuran Rajaratnam from MIBFA. Please proceed, sir. Good afternoon, and thanks for the opportunity. I have one question. I'm looking at your data usage per customer in Nigeria and, you know, that grew year-on-year about 19% to 4.6 GB per customer per month. I just want to understand a little bit more about this. You know, you have couple of moving parts in Nigeria. One is the SIM consolidation issue and, you know, the data usage dropping a little bit because the, you know, people are consolidating their voice usage on the SIM as well as parallel voice use. The second is obviously there's inflationary impacts and, you know, the affordability issue. The bit that I really want you to maybe talk to is that, you know, in the past you've said that if the heavy users maybe, for want of a better expression, at the higher end of the pyramid, if you like, that are the intensive data users in Nigeria, whereas voice is more across the pyramid. These sort of users may not be necessarily affected by, you know, inflationary impacts as well as the SIM consolidation issue, you know, the affordability issue. I just wanted to hear how you are seeing these high use, high-end users or high intensive users, how are they behaving on the network given the conditions on the ground in Nigeria specifically? Thank you. The high data usage customer, they're the ones who normally use their smartphones. What we've seen is an increase in the data usage per customer from those customers. The customers we lost, they are basically the lower range. They are the ones who don't have, you know, like your brackets of spend. They are folks in the rural areas who don't have access to centers where they can register for SIM. Overall, if you look at the increase in data usage per customer, it is mainly driven by smartphone users. Traditionally, smartphone users are the more affluent customers. Yes, we've seen an increase in usage, mainly driven by the high-end customers who consume data on smartphones. We've seen an increased penetration of smartphone or used smartphone in our network in the last quarter. That is one of the key drivers of the increase in usage you've seen. It is offset by some of the low-end customer that we lost from the NIN issue. Sure. If I could just follow up on that. Is it fair to say that these high-end users are not impacted by affordability issues? You know, their trends are similar to what you've seen in the past. I can give you some data point on that. For example, the 4G smartphone users, the data usage last quarter was approximately 6.4 GB-6.5 GB, which has gone up to 7.5 GB now. Right. For the high-end users who are using 4G, they have been constantly increasing their usage, specifically the 4G data usage. Just to confirm, it's a quarter-over-quarter number that you quoted there, right? Yes. I'm saying quarter four, which was January to March. Yes. That quarter, the high-end users, which is the 4G user, basically, they were using average 6.4 GB. That has gone up in quarter one, which is the current quarter, to 7.5 GB. Excellent. Thank you so much. That answers it perfectly. Have a good day. Thank you. Ladies and gentlemen, just one final reminder. If you'd like to ask a question, please press star then one. The next question comes from Rohit Modi from Citi. Please proceed. Hi. Thanks for the opportunity. Just two questions from my side. Three follow-up questions. One on NIN registrations. You mentioned, 3.5 Million subscribers actually submitted NIN and 2.5 million Are connected. Does that mean rest of the 3 million subscribers will be connected over next quarter or even like all the subscribers are gone, you might not be connecting them again? Secondly, on margin evolution, I understand in the first quarter you have a deterioration in Nigeria and other two regions, kind of offset the margin deterioration. How do we look at it, for rest of the year, given there is a change in commentary on terms of how margin or how we expect margin to be for rest of the year? How do we see, do you see the same kind of situation for rest of the quarter where we'll see deterioration in Nigeria will be more than offset by- Other regions? Let me clarify the 5.3 million customers who submitted the SIM, the NIN. Out of these, 2.3 million of them have been unbarred because the NINs that they submitted, we're able to verify with the database of the government. The balance of 3 million, we've not been able to verify the details with the information in the database of the government. What they normally do is to go back and re-register with new KYC data. We now continue to check whether the new KYC data they're giving us, whether they actually agree with the details in the new database. It's a continuous thing. They are not completely lost. As of a few days ago, I think another 200,000 of these 3 million customers, they've been reconnected. The figures keep changing. As customers go back, take new figures, verify the database, then we're able to reconnect them. The figures keep moving. In terms of the view for the future, as you know, we don't give guidance, but I mean, we remain encouraged by the fundamentals of our business. If you look at Nigeria, look at East Africa, look at Franco-Africa, we still have a very large number of people who are not connected through any SIM card. Even when they are connected, the usage levels are still very, very low. In terms of our mobile money business, the penetration levels are still extremely low. Yes, we have some headwinds coming from inflation, especially from fuel. In terms of top line growth, we're still very confident that there are huge opportunities in Africa for us to continue to grow our top line in double digits, very strong double digits, despite the headwinds that we are in this first quarter. Rohit, do you have any further questions? Thank you. Just one more question, Ade. Just wanted to get more color in terms of how you see the mobile money launch in Nigeria panning out. What kind of traction do you see? Is there any kind of guidance that you can give us in terms of subscriber base for this year? On launch day, we did a soft launch in May, selected locations in the country. On the 20th of June, we did a total country launch, and we're just a few days into July, early days. Once again, we're very confident about capabilities to monetize the mobile money opportunity in Nigeria. We've created the infrastructure. We have the right distribution touchpoints. We have the right product. I'll be in a stronger position to explain then what we're gonna do in another couple of months, but just one month old, so I don't want to give any guidance after one month of launching a new product. Thank you. Thank you. The next question comes from Mike Steer from AVL. Please go ahead, Mike. Hi, guys. Thank you for your time today. Just focusing on Nigeria, could you please remind me of your spectrum holdings in each frequency band? A second question, how much capacity can your network hold in terms of data traffic, and how much of that capacity is being used? Just trying to assess how much runway data traffic has left to grow there. In terms of spectrum holding, I'll just give you very top level. We have spectrum in 900, about 15 meg in 900. In 1800, we have 15 meg. In 2600, we have 20 meg. In 2100, we've got about 10 meg. Perfect. Thanks. Just on the capacity side of the network. In terms of actual capacity, I'm unable to give that figure now, but I can share how much of it is being used now to show you the headroom we have. I think currently we're about 35%-40% utilized in terms of capacity. Headroom is almost 60% that give us opportunity for future growth in customer usage. Cool. Thanks, guys. Thank you. Ladies and gentlemen, just one final call before we conclude. If you'd like to ask a question, please press star then one. We will pause to see if there are any further questions. The next question comes from Ali Hussein from FIM Partners. Please proceed, Ali. Thank you very much. This is a very basic question, and perhaps I'm not getting it right. When I look at your total subscribers in Nigeria, they've actually increased from the quarter, yet you had the NIN registration. Is the total number reflective of active subscribers or not, or is there a difference in classification? Just want to clarify that. Remember that, those customers who are active, they're still able to use us for data. They're still able to send SMS. They're only unable to make phone calls. They're able to receive calls by the way, but they cannot make phone calls. That's why they're still active customers. We're still making some money from there. The loss I described is coming from outgoing voice revenue, which have been barred. If I were to look at that 46 million number, how many of those can actually make voice calls right now? About 87 million-130 million of them are able to make phone calls. All of them are able to receive phone calls. All of them are able to do data sessions. Okay, wonderful. Thanks. That's just- Just to add, Ali, our active base, the way we defined our active base, which is based on 30 days revenue generation activity. That means there has to be some revenue generating activity within a rolling 30-day period. Right? That is this subscriber base, whatever we have given is based on that definition. There is no change in the definition. I see. All right, that makes sense. Thank you so much, guys. Thank you. Segun, we have no further questions in the queue at this time. Do you have any closing remarks before we conclude? Yeah. Thank you, everyone. Just want to reassure everybody that the long-term opportunities for us remain very attractive. While we remain mindful of currency devaluation and repatriation risk, we continue to work actively to mitigate all of our material risk and deliver value to all of our stakeholders. Despite increasing challenges from global inflationary pressures, we continue to target revenue growth way ahead of the market as we work on making our margin very resilient this financial year. Thank you. Thank you very much. Ladies and gentlemen, that does conclude today's conference. Thank you very much for joining us. You may now disconnect your lines.