Airtel Africa PLC

LSE:AAF

Earnings Call Transcript 2023-Q4

[Operator]

Good day, ladies and gentlemen, and welcome to the Airtel Africa Full-Year Results Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this conference is being recorded.

I'd now like to turn the conference over to Mr. Segun Ogunsanya. Please proceed, sir.

[Olusegun Ogunsanya, Chief Executive Officer]

Thank you. Hello, everyone, and thank you all for joining us today. As always, I have with me Jaideep, Group CFO; and Pier, who is Head of Investor Relations. Let me give you some brief highlights for the year, and obviously on strategic vision and priorities before handing over to Jaideep to run through the results in detail.

This year, our business and economies where we operate have faced considerable challenges, but our business has managed much stronger. We have seen considerable progress on our priorities as we continue to deliver strong revenue growth and maintain our very high margins despite significant inflationary pressure. This profitable growth has allowed us do not only continue investing to support future growth potential, but also to further enhance our capital structure, create very disciplined capital allocation process.

As our business grows, we continue to create value for all of our stakeholders. We create more jobs, directly or indirectly, we pay more tax, we invest in infrastructure that is key to the development of this nation's economies. We continue to bring communities closer and give them the opportunity to assess affordable financial services sometimes for the very first time. This enables us to further increase returns to our shareholders.

From a strategic perspective, our focus has been on investing in the future group potential, our markets offer, which includes 5G spectrum as well as investments into fiber and data centers. In Nigeria, our largest market, we also continue to invest aggressively. We've launched our Mobile Money service called SmartCash, which has so far increased financial inclusion across the country and it will supplement future growth.

Operationally, we continue to expand our customer base, grow our ARPU and increase 4G network coverage. Both Mobile Money and data continue to be our growth engines, although base continues to grow double-digit as well.

Financially, I'll let Jaideep talk through the details, but at a very headline level, we continue to deliver double-digit revenue growth in reported currency and associate our EBITDA margin despite the inflationary pressures. We continue to strengthen our balance sheet, and the board has recommended a total dividend of $0.0545 for the full-year. This is a reflection of a very solid trend.

The momentum on our sustainability strategy remains unchanged, and it continues to be embedded in everything we do. It will be very helpful to provide some context around a very strong operational performance. Well, let me start by reminding you that our industry is not immune to the macro and geopolitical challenges across the globe. However, we have adopted bidder's initiatives to mitigate against those challenges.

Consumer spend remains impacted by high inflation. However, with affordable and transferable offers, we continue to see customer growth and the data usage driving strong constant currency revenue growth in our portfolio. Inflationary pressures have resulted in rise in energy costs. This has been particularly challenging for our cost base, but we continue to focus on cost optimization, allowing us to report a resilient margin performance.

Currency volatility across the region is not something new. That is something we can control. But our strong constant currency performance has ensured double-digit reported revenue and EBITDA growth. And finally, despite FX liquidity challenges across some of our markets, we have been very successful in upstreaming over $1 billion of cash, of course to derisk our balance sheet.

Let me now update you on our strategic priorities and our achievements. I liked how the strategies are working for us. First, to swap put in our business in the context by reflecting on the opportunity various market so far. This slide capture the key drivers of Airtel Africa's future growth potential. The demographics are in our favor.

Combined with the low level of SIM penetration, we continue to support the growth in our customer base. And as usage of the key services continue to develop, this will support continued strong revenue trends. Importantly, the Mobile Money journey is at a very early stage across all of our markets, especially in Nigeria.

As a group, we're very clear and now we will continue to capture this growth. Our win-win strategy has consistently delivered on our performance strategies, and we don't anticipate this change in any way. Additionally, execution has to be successful and the last 21 consecutive quarters of double-digit revenue and EBITDA growth as shown that as an organization, we have the right framework and mindsets to continue delivering.

The chart above, Chart number 9 reflects our growth algorithm, which are supported our operational success historically and we continue to underpin our growth aspirations in the years to come. As customers increase, our use cases continue to develop so ARPU, our revenue growth remains very strong.

Our focus on costs allow us to drive strong efficiencies, which combined with operating leverage drive strong free cash flow generation, which is then used to invest for the future and to sustain further customer growth. This cycle will continue to sustain our strong operating momentum in the future.

Slide number 10. This algorithm is depicted on the previous slide is reflected in our delivery of double-digit revenue growth across all three service offerings, voice, data and Mobile Money.

Slide 11 shows our group strategy with six wins. There are six pillars which are designed to counter the good opportunities through which we transform lives in Africa. Our strategy is clearly working. However, we'll continue to seek ways to enhance our service offerings to enable sustained growth and create value for all of our stakeholders.

In the next few slides, I'd like to show you our strategy in action. The first one is win with distribution, Slide number 12. Here, you can see how we have continued to extend both our exclusive and nonexclusive distribution channels significantly over the year. Our primary objective is to increase the scale of our distribution, reduce friction and get very close to the customers to support rising usage and revenues. We have almost 1.8 million touch points for our customers which have reached 140 million customers across our 14 markets.

A focus on digitization is important to improve the customer experience on which we put great focus on giving the opportunity to both recharge and onboard digitally. The next slide is an example of what we've done in Zambia using this distribution pillar. We are seeing cost increase in Nigerian network and the very strong partnership with the trade, as with Airtel the go-to brand, resulting in a 40% increase in distribution points and an almost 50% increase in near-term money agents, driving a 15% growth in customers and about 30% growth in revenues.

Next slide, win with technology. The focus for this pillar is on increasing capacity to source customer experience, increased coverage and start future proofing our network group massive MIMO and importantly, 5G. This is all nothing but a best-in-class IT infrastructure. We are continuing to add new network sites. We've added about 2,700 in the last year. We took about 1,000 of these in rural areas, and we have maintained our focus on modernizing and increasing capacity with over 90% of sites on 4G.

Fiber reliability quality, with a rollout of over 6,000 kilometers of fiber, with a total of about 70,000 kilometer of fiber deferred across our network. In addition, we've been investing in new data centers as well to further enhance the future group potential across our markets.

Slide 15 shows our technology strategy induction in our largest market in Nigeria. Through focused planning, and with continued focus on efficiencies, we have spent about $600 million on network investment and spectrum over the last year to increase capacity, enhance coverage and the future of our business with selective 5G deployment. Despite usage on our network, 44% over the last year, the strong customer experience remains intact. We pick our data utilization rate of only 50%. This has enabled Nigeria with better revenue growth of 20% in constant currency.

Turning to Slide 18. This depicts our data strategy. Our technology strategy continues to support our win with data strategy, digital segment and technology, and with increased fiber rollout, we have deployed the network with significant data depository. We have generally invested in 4G of our peers. And across the group, over 19% of our sites are now 4G capable. When combined with our smart, affordable and transparent data bond of ours, customer data usage was almost 30%, revenue 46% growth in data traffic across our network.

In DRC, we have set a good example of our data strategy in action. This is evidenced by this slide, which shows despite increased pressure on consumer spend like you've seen in almost all parts of the world, our competition new price data offerings, combined with 4G network coverage expansion drove our 4G customer base up by almost 40%. This combined with 63% increase in the total data traffic carried across the network, making us the leading data provider in DRC.

Turning to Slide number 18, where we describe our Mobile Money strategy. The lack of traditional banking infrastructure in our markets means that a number of customers who are able to access traditional banking services is far lower than with numbers who have bank accounts. Our focus remains on building this distribution network, increasing the use cases and ensuring the reliability of the platform. This focus has resulted in a 27% increase in our exclusive distribution channel, meaning money branches, mini-shops and kiosk, and also our multi-brand agents by about 44%. The traction with customer is clear with continued ARPU growth and annualized transaction value of about $100 billion in Q4 of 2023.

Uganda is a good example of our strategy to enhance the use cases. We already have a very strong and large Mobile Money business in Uganda. This has been further strengthened by the launch of a quick loan product, which provides an instant loan to cover payment shortfall, and our history of broad range of customers, it's being used by more than 250,000 customers with a transaction value of about 8 million a month by March of this year. This was one of the many use cases that contributed to revenue growth of over 20% by the financial year.

The next slide, Slide number 20, summarizes the success of the previous two slides that I've shared with you. The 20% growth in customer base combined with 40% plus growth in the transaction bank as use cases as fund has resulted in 30% revenue growth for the Mobile Money. With this level of growth and high margin of almost 50%, the opportunity for us to add additional value over and above what other telecom players in industry can deliver remains very significant.

Slide 21 shows the continued evolution of our Mobile Money acquisition. We use digital wallet cashing and customer services as the major source of Mobile Money revenue. And I see yield good potential for this -- from a vision of penetration with new customers. It is also the continued diversification of the business towards additional payment solutions and also most sophisticated financial services like insurance, loans, investment and stock trading.

On Slide number 22, highlights the opportunity from a new PSB license in Nigeria, where we are very strongly positioned. We have made significant progress over the year, where we have prioritized investment into the liability and trustworthiness of the systems and product offering. Our stark confidence around the platform stability has increased, we have accelerated our investment into the distribution network, and we have shared some initially encouraging performance with 12 million wireless phone and over 600,000 active customers.

Given the early stages of this rollout, we are prioritizing investment into the system and customer acquisition before revenues. The key for annualized transaction value for the PSB business, is approximately for $413 million. So adjusted a significant opportunity and the proven guidance momentum. Our strong prices across the market are locked in our investment into foreign distribution network and positions us well to maximize the opportunity available to us.

The next slide is our win with people strategy. Our [indiscernible] continues to be very critical to our ability to deliver on our business strategy, and this is underpinned by a strong governance culture I'm particularly pleased, the improvements in gender diversity, and we continuously strive to make further progress on this agenda. Now on sustainability, before I finally hand over to Jaideep. We are particularly pleased with the progress we've made on our sustainability journey.

Following the launch of our first report in October last year, we have made significant progress in two key areas. Number one, we have earned UNICEF partnership across of our costs. It's naturally going to cover the 10 countries, but we are in six already providing free educational resources to over 250,000 children this year. This is the beginning. We aim to provide these services free of charge to more than 1 million children by 2027.

Secondly, we have done considerable work on our emissions reduction plan, and I'm encouraged by the work as shown a 2050 net zero ambition to be achievable and will be supported by specific decarbonization initiatives that would enable substantial reduction in emissions intensity of over 60% by the year ending 2032.

This slide highlights the progress across all of the four pillars of our strategy: the pillar of business, people, community and environment. And I look forward to continue reporting on this very important strategy which are now based on everything we do.

I'll now hand over to Jaideep to review our financial performance.

[Jaideep Paul, Chief Finance Officer]

Thank you, Segun, and good morning, and good afternoon to all of you. Let me start with the key financial highlights. Slide 26, on overall terms, we have delivered a good set of results. We continue to expand our customer base by 9% year-on-year to reach 114 million customers. This helped us to continue our revenue and EBITDA growth momentum.

Revenue growth for the full-year was 17.6%, with Q4 growth accelerating to 18.6% in constant currency. Underlying EBITDA grew by 17.3% in constant currency to reach $2.6 billion of EBITDA, margin 49%, flat year-on-year despite inflationary cost pressure. Operating free cash flow at $1.8 billion was up by 10%. Leverage at 1.4x was broadly stable despite $500 million of spectrum investment during the year.

The Board has recommended a final dividend of $0.0327 cents per share. Therefore, the total dividend for the full-year will be $0.0545 cents per share, up 9% from the last year in line with our dividend policy.

Coming to next slide. All our key service segments of voice, data and Mobile Money grew double-digits in constant currency. Revenue in the reported currency grew by 11.5%, while constant currency revenue growth was 17.6%. The differential in growth rate was due to currency devaluation mainly in Central African Franc, which is largely baked to Europe, the Nigerian naira, Kenyan and Ugandan Shilling and Malawian Kwacha, partially offset by appreciation in Zambian Kwacha.

Coming to the next slide on the segment performance. First, Nigeria. Revenue grew by 20%, supported by both customer base growth of 9% and ARPU growth of 7% despite the impact of cash shortage in the country in Q4 '23 due to demonetization. Voice revenue grew by 13.4%, driven by customer base growth and stable ARPU despite NIN impact in the first quarter of the year. Data revenue grew by almost 28%, contributed by 17.3% customer base growth and almost 10% growth in data ARPU. We further expanded our 4G network with 99% of our sites in Nigeria are on 4G. This resulted in usage per customer growth of almost 25%, while 4G usage per customer grew by almost 50%.

EBITDA margin at 51.3%, dropped 423 basis points as a result of rising fuel prices and increased inflation. Coming to East Africa. Revenue grew by over 17%, driven by double-digit revenue growth in all three services of voice, data and Mobile Money.

This revenue growth was supported by customer base growth of around 10% and ARPU growth of 9% to reach $2.7 per customer per month. Voice revenue grew by 12.2%, driven by customers as well as ARPU growth. Data revenue grew by almost 23% driven by 20% growth in customer, over 9% growth in data ARPU. We further expanded the 4G network across the region 47.3% of total data customers are 4G customers, up from 40.5% of the last year.

Mobile Money revenue grew by 32.6% driven by over 18% growth in customer base and around 10% ARPU growth. Underlying EBITDA margin was 53.3%, expanded 193 basis points as a result of revenue growth and cost efficiencies.

Coming to Francophone Africa. Revenue grew by around 13% in constant currency, while reported currency revenue growth was 6.2%. As mentioned, the difference in the growth was largely on account of devaluation in Central African franc, which is largely baked to Europe. Customer base of around $29 million up 7.8% year-on-year, while ARPU grew 3.8% in constant currency to reach $3.7.

Voice revenue growth was around 9%, driven by customer base growth. Voice ARPU was largely flat due to decline in interconnect rates in Niger and Congo B. Data revenue grew over 16% was largely driven by over 9% growth in customer base and around 8% growth in data ARPU. Mobile Money revenue grew over 20% due to 18% growth in customer base.

EBITDA margin at 46.6% improved by 220 basis points. Adjusting $19 million one-time of its benefit that we had during the first half of the year, normalized full-year EBITDA margin for Francophone country was about 45%.

Next slide. We show group underlying EBITDA growing by 11.4% in reported currency to almost $2.58 billion. Underlying EBITDA has been adversely impacted by $133 million as a result of currency devaluation in multiple OpCos including Nigeria. The underlying EBITDA margin was at 49%, flat year-on-year despite rising energy costs and increased inflation across geographies.

Impact on the fuel price increase was $245 million for the full-year, out of which $215 million was in Nigeria. And we managed to offset most of this impact through operational efficiencies alongside disciplined cost control in various other areas.

Next slide. As you can see, we have a strong track record that reflects a very efficient operating model that has driven margin expansion over the last four years. We continue to focus on margin resilience as we move to next financial year.

Next slide. Let me spend a few minutes discussing the finance costs, as I'm sure it is an area of interest for all of us. As you can see, finance costs, excluding foreign exchange and derivative loss was higher than last year reflecting the higher interest on lease liabilities and other finance charges. The largest impact on a year-on-year basis was $245 million, increase in foreign exchange and derivative losses arising from currency devaluation, which resulted in the restatement of foreign currency-denominated debt and liabilities.

As you can see in the chart on the right-hand side, these includes losses on revaluation of bank debt, lease liabilities, creditors, shareholder liabilities and derivative losses. We are actively working to reduce the impact of this currency devaluation on our income statement. Firstly, we are moving U.S. dollar debt into local currency debt at the operating company level, 64% of the OpCo debt is -- OpCo market debt is now in local currency, and we continue to focus and keep converting the foreign currency loan into the local currency loan.

Secondly, lease liabilities are paid within local currency, but about 50% of these liabilities are paid to the U.S. dollar. We'll continue to work with our tower companies, our partners to reduce this further.

For creditors, we have been working with our partners to move some dollar CapEx to local currency CapEx. And finally, as we continue to upstream cash from the operating companies, we will look to reduce the shareholder loan across various geographies.

Going to the next slide. Operationally, we are happy with our performance with double-digit growth in revenue and operating profit. However, ForEx has impacted our EPS after normalizing the net impact of this ForEx and derivative losses. The EPS before exceptional item would have been $0.206, an increase of over 13%. However, the ForEx and derivative loss has adversely impacted the EPS.

Basic EPS was USD 0.177 in FY '23 as compared to USD 0.168 in FY '22. EPS before exceptional item was dropped to $0.136 in FY '23 as compared to $0.16, and that is because of the ForEx and derivative loss.

Coming to next slide, our capital allocation policy remains unchanged. As mentioned earlier, our priority remains to invest in the business and at the same time, aim to further strengthen the balance sheet. CapEx guidance for the next year is slightly higher between $800 million and $825 million as compared to the last year. This includes data center CapEx of roughly about $40 million.

Secondly, to return cash to shareholders, through a progressive dividend policy, and the Board has already recommended a final dividend of $0.0327 per share which is a total dividend for the full-year $0.0545 which is up by 9% as compared to our -- as compared to last year, in line with our dividend policy.

Slide 36, we continue to invest in future growth. We have invested $748 million in FY '23 intangible CapEx during the year. In addition to this, we have also acquired Spectrum in Nigeria, Kenya, DRC, Zambia, Tanzania for an investment of about $500 million. 87% of our CapEx investment is geared towards growth initiatives, which combined with Spectrum purchases, ensures a strong and reliable network for the future.

We have also rolled out 6,000 kilometers of fiber network in the last one year, resulting into 70,500-plus kilometer of total fiber network.

Coming to the normalized free cash flow, during the year, we have generated $121 million of cash from operations, post-tax and interest payment. Our cash CapEx rates were higher by $70 million. Lease liability payments were higher by $28 million and noncontrolling interest was higher by $27 million. Hence, our normalized free cash flow before Spectrum investment was largely stable as compared to the previous year despite the ForEx headwind.

Further, our $472 million of increased Spectrum payment was due to the total $500 million Spectrum investment in current year. Hence, our normalized free cash flow for the full-year was $82 million.

The next slide. Our investment decisions are made only if they are following a stringent return on investment criteria, which is clearly reflected in the trend of our return on capital employed highlighted in the chart. Our ROCE has improved 101 basis points during the year and almost seven percentage points in the last two years to reach 23.3%.

Coming to our balance sheet. We continue to strengthen our balance sheet by, firstly, reducing our foreign currency debt, especially at HoldCo. We have prepaid bonds of $450 million over the last 12 months as a result of strong cash upstream from our OpCos. As you can see, our upstreaming potential is very diversified across our region, not making us overly reliant on one specific region.

Secondly, our OpCo market debt increased by 29% to over $1.6 billion in line with our strategy to push down the debt at the OpCo level. Group leverage at 1.4x has remained largely stable compared to last year, and this is in spite of the fact that we invested about $500 million in the Spectrum.

The total weighted average interest rate was 7.7% vis-a-vis 5.6% in the last year due to increase in the base rate, increase in local currency OpCo debt and the repayment of HoldCo bond, which had a lower interest rate.

I will now hand over to Segun to conclude the presentation. Over to you, Segun.

[Olusegun Ogunsanya, Chief Executive Officer]

Yes. Thank you, Jaideep. Finally, from me on Slide number 41, a few words on summary and outlook. As I've seen from our results, our focus has contributed to strong operational and financial performance, and we continue to demonstrate positive developments on nearly every key metric. Our near-term focus will remain on investment in our network and on ForEx finding our distribution to be closer to our customers, while at the same time building new services for future growth, such as the DSD opportunity in Nigeria, as well as ambitions for data center group and fiber rollout.

We remain mindful of the current repatriation risk which are largely outside our control. But our results continue to demonstrate the effectiveness of our strategy and our strong execution by us. The growth opportunity remains very intact, and we see ourselves well positioned to deliver again its growth with a continued focus on EBITDA margin resilience.

And with that, I would like to thank all of you for your attention today. I would now like to open the floor for questions. Thank you.

[Operator]

Thank you very much sir. [Operator Instructions] The first question comes from Jonathan Kennedy-Good from JPMorgan. Please proceed with your question, Jonathan?

[Jonathan Kennedy-Good, JPMorgan]

Good afternoon and thank you for the opportunity to ask questions. Quick question on Nigeria. Just obviously, a solid result there, but trying to understand whether you will push for price increases given stubbornly high inflation rates there. So perhaps some color on what you think the government may allow there. And then also of the $1 billion that you upstreamed, can you tell us how much of that was in the fourth quarter and how much came from Nigeria? And then finally, in terms of the Mobile Money potential value realization via listing, is that kind of on the back burner for now, or can you talk to a timetable for that given what -- where we are in terms of the market cycles at the moment? Thank you.

[Olusegun Ogunsanya, Chief Executive Officer]

Yes. Thank you, Jonathan. I'm going to take the last question first on the Mobile Money listing. About two years ago, we said we're going to list the Mobile Money business in four years' time. So two years down the line, we still committed guided line. Nothing has changed. So we're still compared to listing our Mobile Money business in two years' time. So that is the commitment we've given and we are standing by that commitment.

On your second question about the repatriation from Nigeria. We've done about $1 billion from different countries in our territory, about $360 million, $370 million of that came from Nigeria. But that is the fact. In terms of how much we took out in the fourth quarter, I will give up to you on that. But as I speak now $1.370 billion out of that came from Nigeria.

You spoke about price increase. Price increase is stability in Nigeria. We've got a different philosophy around revenue growth and around EBITDA. We armed the philosophy of growing our revenue by growing customer base and growing customer usage. So our philosophy is to get a lot more customers, get them to use a lot more for us for voice, a lot more minutes, a lot more data, a lot more money. That's according to our own growth. And that's why the fact that we asked to reverse a price increase we took in Q3, we see it grew revenue in Nigeria by 20%, voice and data.

So price increase will be welcomed. We continue to work with regulators on what will led them up in a price increase. But that's why the fact we not have a price increase. You've got a word is, I mean as minor customer base, let them use the network for more voice, multi-chart and eventually more Mobile Money. And that's how we've done. We've grown a year in the last couple of quarters, that's how we're going to continue to grow. In terms of the maintenance in the last quarter, Jaideep would give us a figure.

[Jaideep Paul, Chief Finance Officer]

Yes. So Jonathan, in Q4, we have upstreamed in total, $304 million, out of which $150 million was from Nigeria. The full-year, we have upstreamed $1 billion, out of which $388 million from Nigeria.

[Jonathan Kennedy-Good, JPMorgan]

Thank you very much. That's really helpful. Thank you.

[Operator]

Thank you. The next question comes from Maurice Patrick from Barclays. Please proceed with your question, Maurice.

[Maurice Patrick, Barclays]

Yes, thanks for taking the question. I'll ask a couple, please. First question on Spectrum. So you've spent $0.5 billion this year on Spectrum, mostly in Nigeria. Just could you update us in terms of what visibility you have on other Spectrum auctions coming up in the next 12 months, first question.

And the second question, we've had a lot of noise on Mobile Money around new entrant disruption, and wave made lots of noise. It feels as though some of that new entrant disruption seems to be going away. I was just curious for an update from you guys in terms of how much competition you're seeing from new entrants in that space? Thank you very much.

[Olusegun Ogunsanya, Chief Executive Officer]

Thank you, Maurice. Let me take the second one first. In terms of wave, I mean, wave came, but we're not seeing any more wave. So I'm just not sure the good model is. They did very well in selling up not in [indiscernible] anywhere under retention than we took the 5G there. So that's how much about wave. But it's very different model for grid Mobile Money. It is based on the decision infrastructure that we're good about the year.

On top of that, we've got customer revenue base on Mobile Money business. From customer base we were to combine customers to Mobile Money. And we have three layers of service as we go further. We have our mobile wallet, we have our premise, we have our financial services. These are clearly distinctive. And I'm just not sure how any data replicate and any work is done, given the resources and the advantages we have. So we'll be good in terms of Mobile Money. We can see this in Uganda, where we're competing against the mobile operator and against that. And in a lot of our countries in East Africa.

Talking about Spectrum, we spent about $0.5 billion on spectrum last year. We bought Spectrum in Nigeria, we did in Zambia, we did Tanzania, we did Seychelles and Kenya and DRC as well, so close to $0.5 billion. And a couple of days ago, we renewed our 3G license in Nigeria, paid $120 million, $130 million to renew the 3G license in Nigeria.

I don't expect any major outflow for Spectrum for license renewals and the DCR. The major part of the $0.5 billion we spent last year was from Nigeria. The 5G spectrum was about $285 million. That was a big chunk of the money. On top of that, we also bought additional Spectrum in 2.6 gig in Nigeria. So almost $370 million of that $0.5 billion was spent on Nigeria. But this year, I really don't expect any huge upload Spectrum, and I don't see anything that would suggest an impact, major is going to happen with Spectrum in this financial year.

[Maurice Patrick, Barclays]

Thank you very much.

[Operator]

The next question comes from Cesar Tiron from BofA. Please proceed with your question, Cesar.

[Cesar Tiron, BofA]

Yes, hi. Good afternoon. Thanks for the opportunity to ask questions. I have two, if that's okay. The first one would be on CapEx for 2024. Do you have any formal guidance, or can you at least -- please at least tell us if CapEx in dollars is likely to be higher or lower than what you spent in FY '23? And then the second question would be on 5G in Nigeria. Can you please mention how far are you in the rollout and how many sites you intend to have 5G enabled, let's say in the next two to three years? And if you believe that there is a use case for fixed wireless solutions in Nigeria for 5G? Thank you.

[Olusegun Ogunsanya, Chief Executive Officer]

I'll just give you a talk about view of the CapEx and then Jaideep will give you further information on the CapEx. We did about $750 million last year. This year, we are looking at $825 million, increase coming mainly from additional money we want to spend on data centers. Data centers in Nigeria, data centers in Mombasa in Kenya, and that explains the increase from the $750 million we spent last year on CapEx.

On 5G launch, we continue to invest a mean for future growths of our business. On the 5G investment, 5G spectrum we bought across much of the countries is a reflection of our belief in the future potential of 5G. In the short-term, we have continued to deploy 5G. We have, I mean, very limited use cases in the short-term. And the focus now we can use 5G to deliver broadband. Remember, in Africa, fiber broadband is very limited. So our focus is we use fiber to deliver broadband to owned/small businesses. That is one use case.

But the bigger use case for mobile devices, is it very limited now, given the fairly low penetration of 5G devices and the relatively high prices of 5G devices. As soon as it become cheaper, there is very deeper penetration of 5G devices, and I like to believe that I mean a lot more consumer business to follow. Therefore, now we're buying this for the future. In the short-term, we're going to use the 5G to deliver broadband. And the initial focus is launching of 5G in select new boards in select cities. They're starting to looking at key cities of Africa. Lagos, of course, is one. We're looking at Zambia, we're looking at DRC, we're looking at Uganda. We are going to very major cities in each of those countries.

And when we're talking about major cities, we're also talking about the very inflation where we have only sufficient purchasing power, there is no 5G devices and the kind of further [indiscernible] for the devices that will consume 5G. So to summarize, I mean, it's going to happen. Is it immediate, no. Is it the right thing to do to prepare for, yes. Spectrum is limited, don't buy it. You're not going to find it to buy when you needed, anyway, so. So we just decided to buy ahead of the opportunity of us.

[Jaideep Paul, Chief Finance Officer]

Okay. So on the CapEx, let me give you a little bit more detail of the CapEx. Firstly, for next year, our guidance for CapEx is between $800 million and $825 million, out of which about $40 million we have earmarked for the data center build-up into two countries, Kenya and Nigeria. So the balance of the CapEx largely will be between network, IT, sales and distribution and Airtel money. A large part of the CapEx, I would say about $600 odd million, $600 million to $650 million will be new network rollout expansion, capacity build, fiber et cetera. In IT, there will be an IT infrastructure investment plus Airtel money IT infrastructure investment, about $75 million and $100 million.

And of course, we have a distribution expansion, the kiosk, the branches, the hands -- the KYC devices and so on and so forth. So broadly, that's the way our CapEx is to be built up for next year. And overall, it will be between $800 million to $825 million, including the data center. And roughly about 65% to 70% of our CapEx is dollar billed. So that's broadly about -- if I take 70% of $800 million, that's about $550 million, $560 million will be dollar billed.

[Cesar Tiron, BofA]

Great. Thank you so much.

[Operator]

Thank you. The next question comes from Rohit Modi from Citi. Please proceed with your question, Rohit.

[Rohit Modi, Citi]

Thank you for the opportunity. Just two questions from my side. Firstly, on the mobile money in Nigeria. If you can share any internal targets you have when you start generating revenue from the mobile money side in Nigeria, and also any KPIs that you can share at this moment in terms of how many agents and merchants you have already on Board? And what's the current status on that side?

Secondly, let me talk about margin resilient. Can you give more color on -- between the geographies, you saw a decline in margins in Nigeria, and it was much better in East Africa and Francophone. Is that the kind of mix you will see next year as well in terms of a substantial increase in margins in those two regions? And then again, Nigeria will go further down? And also if there's a potential price increase that happens in Nigeria, along with regulator, do you see an upside risk to our margin revealing guidance in that, please. Thank you.

[Olusegun Ogunsanya, Chief Executive Officer]

Thank you, Rohit. The mobile money business. Like I said in my opening remarks, we are prioritizing customer acquisition ahead of revenue growth. And that I'm confident we are on the right path. In terms of KPIs, we've acquired about 600,000 active customers on about 12 million wallets. Of the 12 million wallets, 600,000 of them are very active. In terms of the Asian network, that is required for fuel, for cash, for acquisition of customers. We have registered about 125,000 customers as of end of March. Out of which 52,000 are active.

So the key figures are one, active wallets is 100,000; total number of wallets are 12 million; two, number of agents, 125,000, 52,000 are active. And in terms of transaction value, if I'm to analyze our Q4 transaction value, it's looking like $5.8 billion. So Q4 type for transaction value that went through our chain is $500 million. And in terms of when we go make money, I mean the take rate in Nigeria, is about 0.3% from there to 0.5%, 0.6%, 0.7%, and that account is where we operate in. But when it's also a very large country with very, very many potential customers. But the algorithm for us in the forces just continuing to expand our customer base. Once we have to start in the stable level of customer base, we continue to look at the money. But we're very optimistic, that is going to continue to be our portfolio.

Now talking about the margin picture. We've got a portfolio of countries, portfolio of regions. Nigeria is, of course, the region and it's a country. We've got a contraction in margin in Nigeria, but we are especially into other regions. East Africa is funded, West Africa is funded and that was minimized the impact on the group EBITDA. As I've said earlier, EBITDA is more or less about 49% despite the huge headwinds we had on fuel, headwinds on northern region, we still delivered still EBITDA 49%. Jaideep, you want to add more information.

[Jaideep Paul, Chief Finance Officer]

Yes. Before I take that, Segun, you can address the price increase question.

[Olusegun Ogunsanya, Chief Executive Officer]

On the price increase, once again, pricing is regulated in Nigeria. We continue to engage the regulators that given the level of inflation in the country, given that we sell in the currency will require pricing to really maintain the health of the industry. But beyond this, we're very, very committed to our growth algorithm, which is using customer base expansion, growth increase in usage, talking about consuming more minutes, voice, consuming more data, megabyte. These are the two pillars we use for growing our revenue from customers, let them use more voice, let them use more data and of course, if pricing comes [indiscernible]. Without pricing, we've delivered 20% growth in the year-end constant currency. And I think double-digit growth in reported currency as well. So you got the formula that works for us in Nigeria.

And in terms of EBITDA, and I'm sure that Jaideep will give more color to this. We have, I mean, a simple philosophy around stable margin as well. Therefore, every $100 we add to our top line, at least between $50 and $55 go towards the bottom line. $1 to $1.50, $1.55 should go towards the EBITDA line. That's what we've done consecutively in the last 21 quarters. That's a formula that I made you very early. We have everything possible to maintain that formula between 50% and 55% flow-through from top-line to EBITDA. Maybe Jaideep, you want to add.

[Jaideep Paul, Chief Finance Officer]

Yes. So mostly, you have covered this. So just couple of points I want to add that last year, just to remind you, we have got impacted by about $245 million due to fuel price increase and largely in Nigeria. Because our dependency on fuel or the DG or generator in Nigeria is higher than any other country because of the shortage of grid power availability. So while the fuel price increase has also happened in some of the East African country. However, East African country, we are fortunate that the grid power availability is much higher as compared to Nigeria. That's why we've never seen that kind of impact.

So we are actively working with the tower post -- the tower companies to see if we can participate in contributing in terms of conversion of some of these sites include solar, higher-capacity batteries so that we can reduce this impact or any future impact to a substantial level. However, we -- as you know that last year, the diesel price in Nigeria has moved from 320 naira a liter to 800-plus naira a liter as we exited in March.

Obviously, it is unprecedented whether next year, there will be further increase, further pressure on the diesel price, we don't know. But if we -- assuming that no significant increase in the diesel price, our margin, as you have seen, is quite resilient, and we continue to thrive, as Segun has mentioned, in terms of incremental flow-through over 50% in the margin for every dollar which we generate incremental.

[Operator]

Rohit, does that answers all your questions?

[Rohit Modi, Citi]

Thank you. Thank you. Sorry, just one last thing. If you can quantify what was the impact of demonetization on the voice revenue in Nigeria, or any guidance on that side?

[Olusegun Ogunsanya, Chief Executive Officer]

Demonetization took a lot of cash out of this and economy that is predominantly cash. And the impact on our performance is 20% in Nigeria. And for the group is about 0.6 on the overall top-line for the group.

[Rohit Modi, Citi]

Thank you.

[Operator]

Thank you.

[Jaideep Paul, Chief Finance Officer]

But just to add on the demonetization. While demonetization has been withdrawn, and we have seen the trend coming back in Nigeria in the month of April. So it has come back to the pre-demonetization level in the month of April.

[Rohit Modi, Citi]

Thank you.

[Operator]

[Operator Instructions]. At this time, I'll hand over for questions from the webcast and return for questions on the phone lines. Thank you.

[Pier Falcione, Head of Investor Relations]

Yes, Jaideep and Segun, a couple of questions from the webcast. First is -- what do you think is the other inflation across our sale market if you were to take a guess. And the second one is on Kenya. What is our strategy to continue to grow shares in the market and any possibilities of the public listing for Kenya?

[Olusegun Ogunsanya, Chief Executive Officer]

Jaideep, can you talk about inflation, then I would take the Kenya.

[Jaideep Paul, Chief Finance Officer]

So inflation, excluding Malawi and Nigeria, the inflation ranges between 8% and 10% across all other geographies, which is very normal. In Nigeria and Malawi, we have seen the inflation trend between 18% and 20%.

[Olusegun Ogunsanya, Chief Executive Officer]

About the Kenya story. As part of our license obligation, there's a requirement to release in Kenya. For the last couple of month, we had discussion around whether that condition is going to be changed or it's going to stay. We still be waiting for clarity from Kenya whether this scenario -- in relation to this. We are working on ways to comply with any lawful requirement of our license, so if we like this, we will list. But once again, there is no indication from Kenya that this may not be a requirement. So whatever requirement is, will be a requirement.

In terms of [indiscernible] is clearly dominant in Kenya, but I'm very pleased with the progress we have made Mobile Services segment. We continue to gain share, we continue to acquire customers. Kenya, if you try to isolate the mobile money business and focus on only the mobile services is a very significant part of our portfolio. So I'm very pleased with the progress we're making in the growth of our mobile services business in Kenya.

[Pier Falcione, Head of Investor Relations]

Back to you, operator.

[Operator]

Thank you. Are those all the questions on the webcast?

[Pier Falcione, Head of Investor Relations]

Yes. Back to you, operator.

[Operator]

Thank you. The next question on the phone line comes from Faisal Azmeh from Goldman Sachs. Please proceed with your question, Faisal.

[Faisal Al Azmeh, Goldman Sachs]

Yes. Thank you for the opportunity to ask questions. Most of my questions have been answered. It's just maybe just a question more about the portfolio of countries that you have at the moment. You've been operating in this inflationary environment for a while. Do you see any room to effectively rationalize some of that exposure? And is that part of some medium-term strategy? Or do you feel that you're comfortable with the current footprint that you currently have?

And then my second question is more towards the -- obviously, you've done a decent amount of work on deleveraging the balance sheet over the past few years. Do you feel you might actually now go back to a more progressive dividend policy in terms of linking it to the free cash flow level? Or you're actually quite comfortable with where -- how the policy currently stands at? Thank you.

[Olusegun Ogunsanya, Chief Executive Officer]

On dividend, I mean, of course, it's directed by the board. We do have a progressive dividend policy. We increased by the single to -- I mean single-digit. We've done 9% increase in this financial year to deliver $0.0545 as a policy. And we continue to look at different issues, investment required in our business for future growth, and we decided what the right mix is, but we'll give you more flavor on that.

Talking about the portfolio of countries, we operate in the 14 countries. With a balanced portfolio, we have the countries in East Africa, we have countries in West Africa, we have countries in Central Africa, we have French speaking and English speaking. And we have hard currencies, we have soft currencies in most of the French speaking countries, I mean the [indiscernible] linked to the euro, which is more or less, I mean, I mean hard currency. And of course, we have weak currencies in some countries.

In terms of attractive mix of our portfolio, I think it's a balanced portfolio. It is delivering its purpose. We continue to grow very strong double digit. EBITDA is 49%. One of the fastest-growing telecoms in Africa. EBITDA is best-in-class in the top quarter in terms of performance. [indiscernible] despite the many challenges in Africa, despite inflation, despite devaluation, we continue to do well for the currency [indiscernible] spread of our portfolio and I see no [indiscernible] new power of our portfolio.

[Jaideep Paul, Chief Finance Officer]

With reference to the debt profile and the leverage, et cetera, let me tell you that out of 1.4x if you exclude lease liability, which constitutes about 0.8x out of 1.4 in this level, and this finance obligation is nothing but as we make -- as we add 3,000 -- almost 3,000 sites on an average every year, this obviously there's -- this goes up, but then there are sites which are going out of finance obligations. So it is more or less 0.8x stacking for quite some time now.

In terms of our focus, our focus is, as we mentioned in our main presentation, that focus is strengthening the balance sheet, reduce the HoldCo level debt, which we have done by and large, already achieved. And the next -- the last piece of the bond, which is due in May 24, after that, there is HoldCo level debt, which remains. And we pushed down the debt at the OpCo in local currency, which comes with a slightly higher interest cost, but it also reduces the impact of devaluation and restatement of or revaluation of the ForEx debt.

So our clear focus in short to medium term is to now keep pushing down the debt at the OpCo. And second is keep pushing, making local currency debt rather than dollar debt at OpCo so that we can de-risk our balance sheet in terms of the devaluation risk. So that is our current position in terms of the overall debt management portfolio and leverage.

[Faisal Al Azmeh, Goldman Sachs]

Thank you very much.

[Operator]

Thank you. The next question comes from Madhvendra Singh from HSBC. Please proceed with your question, Madhvendra.

[Madhvendra Singh, HSBC]

Yes. Hi, thanks for taking my questions. Just a couple of quick ones and then one maybe a bit detailed one. So if you could talk about the growth rate in mobile money especially in the Francophone African markets seems to be a bit slower than the overall annual run rate, especially during the Q4 period. So if you could talk about is there any real underlying slowdown there, or is just that seasonality issue?

The second question is also on mobile money, but for Nigeria. So while we don't see any revenues being booked, has the commercial activities started already? So if you could share what kind of transactions are happening on the network, what dollar values, maybe you have made the transactions free right now. If you could talk about what's actually happening on the ground on mobile money side in Nigeria that will be helpful. And yes, so these two questions.

And then on the margin side, you had a very resilient margin obviously for the year, but also for the quarter. So wondering if you are seeing any risks going forward? And maybe how confident you are of maintaining these margins as well as -- especially if you also look at the mobile money business, how confident you would be of maintaining these margins? Thank you.

[Olusegun Ogunsanya, Chief Executive Officer]

Let me start with the margin story first. And our margin philosophy earlier on, the further for every increase $1 increase in top line, our object is a mixture between $0.50 and $0.55 when we go towards the bottom line. And we've done that religiously for the past 21 quarters.

We have a number of ways we use to think about this. One is a very, very cost control process, also continuously the operating process to take processes out. We have a very efficient CapEx deployment machinery that would deploy CapEx in an operating space. We've mentioned the fact that we're working with TowerCos to migrate some final resources from diesel to battery to solar. We also continue to increase the grid component of final resources. The number of things we do to mitigate the impact of inflation costs.

In the last year, the major impact has come from diesel NIB, which is why we continue to work with TowerCos partners to find other ways of finding our size. And that speaks to -- partly that speaks to solar, that speaks to grid, we're working on this. So -- and on top of this, we just have a very midstructure that continuous take costs out of the system. We -- continually we are operating with them to make sure I think that shouldn't be done not on very cheaply. We're just very, very fair on the cost view of our processes to get cost out of the system.

Now let me take you back to the mobile money in Nigeria. We got a license in April last year. We started business in June of last year. Our initial focus once it did was to improve IT platform. That is essential to be across digital transparency. We spent time in building this IT infrastructure, IT platform that will be front proof and that will give confidence to our customers. I think we're in a very sweet spot now very confident in that. And what we've done is front proof. We would deliver live services to the customers, who also let us configure as many [indiscernible] as possible. We invested time behind this, we invested money behind this. We've done that.

The second that we've done in the first couple of months is that discretion infrastructure acquiring agent, setting up mobile branches, setting up gears, setting up mini-shops, we've done that very well. And [indiscernible] what we saw in Q4, which is I joined our first month of outcomes. We're able to open 12 million wallets for the full year, as of end of March, we had 600,000 active customers. I've mentioned we have 52,000 active agents.

And in terms of revenue, if I'm to analyze the throughput in Q4 of our PSB business in Nigeria is close to $500 million. The take rate is very low in Nigeria. But my focus on take rate is building the structure that would give suitable revenue in future.

And I'm willing to spend in the next couple of quarters, increasing its infrastructure at the right level of customer base that would make it profitable in a low margin economy because of the margins acquired during the year. We have in part of Africa, we had to increase a break between 0.6%, 0.7% where take rates in Nigeria is up 0.26%. So the team was examining very large customer base, and that is more we continue to work upon in the first few months.

Back to French speak in Africa. We are looking at a group for mobile money. In our French speaking countries, we've grown the mobile money revenue by 20%. I wouldn't say that is a bad growth, 20% is not bad, that's what we've done in French-speaking countries.

In East Africa, where we have most of our sources in countries, we've grown revenue by almost 33%. So that's the way the growth is [indiscernible] between the two major regions where we have substantial mobile money business. For this type most -- business in mobile money anyway and we have done 32%. French-speaking Africa is about 20% growth in the full-year.

[Madhvendra Singh, HSBC]

Just the Q4 growth was only 16%. That's what I was talking about.

[Jaideep Paul, Chief Finance Officer]

Yes. So let me try to also add what Segun has said. We have to keep in mind that Franco's countries -- we have seven countries in Franco, out of which only two countries, which I would say Gabon and DRC are actually the mobile money, the business, which exists and both are growing at a very substantial rate, I would say, more than 20% in both the places. Rest of the places, you have to keep in mind that we just started, because we got the license in Chad, DJ, Congo B very recently. And we are just ramping up those countries.

So we have to probably wait a few quarters to see that growth, what you see in the East African countries because East African most of the markets, I would say, four or out of six countries are quite mature and a very well-established Airtel money business. So this Franco country, as and when the business will start picking up -- the mobile money business will start picking up in the other country, Franco will also go back to a decent growth rate as you see for East Africa.

So East Africa is blessed because you have -- we have four countries out of six countries, which are pretty mature mobile money market. In Franco its only thing in case of two countries.

[Madhvendra Singh, HSBC]

Okay. Thank you.

[Operator]

Thank you. The next question comes from Kayode Eseyin from CardinalStone Partners. Please proceed with your question, Kayode.

[Kayode Eseyin, CardinalStone Partners]

Hello. Good afternoon. Thank you for this opportunity and congrats to you on well, what is an amazing performance, at least on the top-line level. So my first question is as regards to the discrepancy in more freezing performances across your regions, I noticed and I think you mentioned on this call in East Africa and Francophone's Africa EBITDA margin expanded, while Nigeria imported some 4 percentage points in [indiscernible]. And the explanation or my understanding is that most of it was due to diesel cost prices rising across the Nigerian business, almost tripling. But my question is, am I know for a fact that the energy price issue was mostly probably several countries, not several countries, everywhere around the world, where we are witnessing energy pressures. So my question is what exactly what the level is we're able to put in other regions. Were you able to raise prices? And what happened, why was your performance there significantly bad on an EBITDA level compared to Nigeria?

And secondly, your strategy on redirecting debt from HoldCo to OpCo. I would like to understand, because I know for a fact that the cost of debt in our operating countries, Nigeria, Kenya and several of these countries are significantly higher than your KD cost [indiscernible] HoldCo levels. So my question is what exactly at the benefit to open to crew by transpiring debt from [indiscernible] HoldCo to more operating countries where you have double-digit interest rates? And then also do you have like a target on debt-to-EBITDA ratio that you're looking at? So maybe I will point you think where you start to deleverage our point start getting worried about leverage.

And thirdly, the other question I have is that, well, as you've seen, data continues to be the main driver of growth for telcos or [indiscernible], particularly in [indiscernible]. So my question is how large do you think there's level for [indiscernible]. How long do you think this runway is for instance, and so maybe slowdown in good for data usage. And how convinced are you about the usage -- use case for 5G, especially considering the fact that SSA continues to have the largest number of people below the poverty line? Those are my questions.

[Olusegun Ogunsanya, Chief Executive Officer]

Let me start with your first one about [indiscernible]. There are structural differences between the periods, regions and countries. Nigeria has a very low level of grid availability. So we've got a very dependence on the diesel or [indiscernible] in our size. Like in East Africa and French-speaking African countries, where we have a relatively decent level of reliability. So that means we don't have reliance on diesel. So that's a major difference. That is why you're not going to see a massive impact on performance in French-speaking countries, east African countries compared with Nigeria, where we rely mainly on the diesel power the size. That is 1 point of difference.

The second point of difference specifically is on the fact that last financial year, we actually sold some towers in East Africa, we sold towers in Malawi, we sold towers in Tanzania. That has affected our revenue. That has slowed our revenue. So by the time you also went against you, you begin to see while we had a very relatively better EBITDA margin this year in East Africa and French-speaking Africa compared this today in Nigeria.

Talking about the debt profile, I'm sure Jaideep will give more information on debt profile. Why are we pushing there to the OpCos, there are tax advantages, there is currency match as well, but I will give you more information on this. And the last is the data growth there. In terms of data revenue, let me give you a few data points.

In terms of data consumption. Across our portfolio, it's about 4.45 gig of this one. In context, let me take a show India as an example, it's close to 16 gig per peso, actually it's very low now. We are raising what our customers are consuming and what the typical consumer conditions in our country. So that's a very, very longer runway. That gives us a lot of optimism that continuous investment in 4G. With 4G devices becoming cheaper, then we're going to continue to see very, very high level of growth in the data revenue.

And secondly, if you look at the population profile in our territories, we've got the fastest-growing population in the world. Most of the people were very low below 2020, '21 million [indiscernible] in Africa. That shows that young people are very many. What do young people do, they consume data. Where do they consume data, on mobile devices. They are mobile first, mobile only. If you consume data on iPhone, Samsung, Nokia, any phone, you're using the data we created. And with this huge number of young adults, huge number of young we have some of them [indiscernible] digital device for the first time [indiscernible] or we've got able to find the device consume 4G to consume data. That shows it very long run we have [indiscernible] continue to grow data revenues. So we still -- I mean, there is a growth. I'm fairly optimistic that we're still going to continue me to grow data volume in Africa.

Now talking about 5G use cases. Identify on broadband as a similar use case for us, giving a very, very low penetration of fiber broadband in Africa. I think 5G can be a good bet for deploying broadband smart business onto in Africa. That we're going to do. We're also beginning to see pockets of 5G assets. We are reachable is in some parts of key cities. [indiscernible] and 5G as well. And there are some enterprise use cases that I imagine as well. This opportunity in one of our countries, we're actually deploying a private network for one of the mining operators in one of our countries. So such niche cases are also coming to view and we are positioned to capture these opportunities in the medium -- in the long time. Jaideep, if you want to talk about the results.

[Jaideep Paul, Chief Finance Officer]

Yes. So a few things we have to keep in mind, which we stated earlier and today also, we discussed it. One of the -- as we stated that one of our objective is to push down the debt in local currency at the OpCo, primarily for two reasons. If you see historically, the devaluation impact, the CAGR three year devaluation, if you see across various geographies, you will see an average devaluation of 8% to 10% CAGR, almost on every year. That's our average. I'm talking about the average devaluation. There can be a little bit plus, minus here and there. But that's -- and mainly in the East Africa and Nigeria.

Now also, we have to keep in mind that if we sold dollar at HoldCo at 6%, 7% and push down that debt to OpCo, there is no tax shield on the interest, which we pay for that -- servicing that debt. Whereas in the local currency or if the debt is pushed down to the OpCo level, you get a straight 30% tax shield or 30 or the applicable tax shield, but average, let's say, 30% tax shield on that date, on the interest, which we'll pay, number one.

Number two, we also avoid this 8% to 10% average devaluation, which we have seen. So there is no requirement of any restatement of the local currency loan. And we have to also keep in mind that there is a -- this is a natural thing that our -- most of our income is in local currency. Therefore, the endeavor should be the expenditure as well as the debt should be in local concepts so that there is no mismatch between the income, which is in local currency and the debt profile, which should be ideally in local currency.

Now this is our endeavor whether we will be able to do it in a short-term. The answer is we will require some time, because the markets in each country are different, the financial market, but we are clearly focused on doing this activity over the next couple of years so that we minimize the impact of devaluation as well as start getting the tax shield on the interest part of it.

[Operator]

Thank you. At this time, I'd like to hand over for questions from the webcast. Thank you.

[Pier Falcione, Head of Investor Relations]

The last couple of questions [indiscernible]. First is are there more tower asset sales to expand?

[Olusegun Ogunsanya, Chief Executive Officer]

Okay. We got on the two countries left and the countries cover -- they've got very strict rules on private growth. And we continue to work with regulators and internet parties to get the rules liberalize to make it possible for towers to be sold. There's a very small number of towers anyway. We've have only two countries left to go. And the rules they have got are slightly different from the rules of similar countries on similar towers.

[Pier Falcione, Head of Investor Relations]

Now to close. Surprisingly on Nigeria, could you give some color on the Nigeria rate that we used in cash from Nigeria, one? Second one is, is the cash price in Nigeria can be used for the mobile money development in the country? And thirdly, if there is any plan to raise that instrument in Nigeria?

[Olusegun Ogunsanya, Chief Executive Officer]

Well, in terms of the demonetization, like I said, that impact is fully over. It ended in March. So we have marked a growth. And out of every strange policy something good comes out of it. So I expect this to really encourage customers to open wallets, and I'm sure they're going to open smart cash wallet that works. So that's probably the good thing that will come out of this, we're pushing a lot more people to digital channel and keep cash [indiscernible] to keep cash in their wallet. So, I assure that to be boost to our business.

In terms of debt instrument, there is an opportunity to me to issue debt instrument commercial papers. The rest are quite cheaper [indiscernible] and I'm sure that [indiscernible] are looking at the assumptions of the righter structure of our business in Nigeria and OpCos. So that is a possibility. And the last question, did I miss anything?

[Pier Falcione, Head of Investor Relations]

Yes, the rates.

[Olusegun Ogunsanya, Chief Executive Officer]

Well in terms of rates -- I mean, our sales foreign exchange from banking sources in the country, we don't use sources in any of our markets. And units are determined by the banks. So they are bank to bank, bank to customers rates and we just comply with the rates given by the banks and we use official sources to assist us.

[Pier Falcione, Head of Investor Relations]

Thank you. Thank you, operator. I think we can now close.

[Olusegun Ogunsanya, Chief Executive Officer]

Thank you, gentlemen and ladies. Have a good day.

[Pier Falcione, Head of Investor Relations]

Thank you.

[Jaideep Paul, Chief Finance Officer]

Thank you very much.

[Operator]

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.