Challenges faced by airtel in Africa

Abstract

The trade relationship between India and Africa, catalysed by the economic growth in Africa and the similarity of institutions and demographics, has now grown beyond trade, into investments and acquisitions. Indian companies from multiple sectors like Automobile, FMCG, software, pharmaceuticals and minerals and manufacturing have built a strong base in Africa. Companies such as Marico and Godrej, which had, until now invested in Africa by acquiring small stakes in local companies, are now looking at developing local brands, integrating deeply into the local supply chain and distribution networks and creating products customized for Africans. India’s total investment in Africa sums up to an estimated USD 16.5 billion1 , and this includes diversified footprints from Indian conglomerates across industries. Some of the major Indian companies conducting business in Africa are shown in Appendix 1. This report looks at a few Indian companies which have done very well or fared badly in Africa. It then takes the example of telecommunication giant Airtel and examines why it has not been able to turn around its operations in Africa, even after 5 years.