Airtel Africa experiences revenue growth in Q1 2025, yet curbs capital expenditure in major markets
In the second quarter of 2025, Airtel Africa's capital expenditure (capex) dropped by 18% to $121 million, marking the largest decline in four quarters. This decrease is part of Airtel's strategy of capital discipline and timing differences, as the company continues to manage costs carefully while making targeted infrastructure investments.
Despite the decline in capex, Airtel's revenue growth remained strong. The company's data services generated $549 million in Q2 2025, a significant increase from the previous year. Airtel's customer base also grew by 9% to 169.4 million, and the company's voice services generated $533 million during the same period.
Moreover, Airtel's EBITDA rose 30% year-on-year to $679 million in Q2 2025. Profit margins for Airtel Africa increased to 48%, and the company reported a 22% year-on-year increase in revenue to $1.42 billion in Q2 2025.
The company's conservative capex approach is linked to Airtel's strategy of debt localization, which involves replacing foreign currency debt with local currency debt to reduce foreign exchange risk. This strategy, however, has led to a higher effective interest rate and increased finance costs. Additionally, significant lease liabilities from tower contract renewals have raised leverage ratios, prompting the company to balance investment with financial stability.
Airtel Africa continues to expand infrastructure selectively. In Q2 2025, the company operated 37,579 sites with over 79,600 km of fibre deployed, including in underserved rural and peri-urban regions. This suggests network quality may continue to improve but possibly at a more measured pace due to the lower immediate capex.
Reduced spending intensity could slow the pace of network expansion, which may temporarily hamper efforts to close the digital divide in the most underserved areas where infrastructure costs are high and returns slow. However, initiatives like network energy efficiency (e.g., Nigeria's push to reduce diesel use for powering telecom infrastructure through renewable energy) might help offset some costs, allowing sustainable expansion without proportionally higher investment.
In Nigeria, Airtel Africa's biggest and most profitable market, the company invested just $39 million during the quarter, slightly up from $38 million a year ago. Despite the relatively low investment, Nigeria generated $332 million, or 24% of the group's total revenue in Q2 2025.
Airtel added over 2,300 new sites and expanded its fibre network by 2,700 kilometers in Q2 2025. The company's data users increased by 17.4% to 75.6 million, and smartphone penetration improved from 41.6% to 45.9% during the same period. Average data use grew by 47.4% in Q2 2025.
Airtel attributes the latest drop in spending to "timing differences," suggesting that some projects may have been delayed and that higher spending could come in later quarters. The company's full-year capex guidance remains stable at $725-750 million.
In summary, Airtel Africa is prioritizing financial prudence and risk management by controlling infrastructure spending amid strong revenue growth. This strategic choice may slightly slow network expansion and affect how quickly the digital divide shrinks, but the company continues investing in key areas to maintain and improve network quality in its markets.
The strategic choice of financial prudence by Airtel Africa in Q2 2025 involves controlling infrastructure spending, thereby redirecting resources towards targeted infrastructure investments in its business operations. This decision has resulted in a decrease in capital expenditure (capex) but has also led to an increase in finance costs due to the company's strategy of debt localization.
In the technology sector, Airtel Africa continues to invest in selective infrastructure expansion, with a focus on energy efficiency and network quality improvement, particularly in underserved regions. Despite the lower immediate capex, the company is optimistic about sustaining growth and closing the digital divide through cost-offsetting initiatives like reducing diesel use for telecom infrastructure through renewable energy.
