Airtel Ghana’s Chief Executive Officer Philip Sowah says the biggest challenge to the telecom company’s operations this year is depreciation of the cedi.
Mr. Sowah told the B&FT that since the company reports to its mother company Bharti Airtel in dollars and imports a lot of its inputs, any drastic depreciation of the cedi against the dollar affects its finances.
“The cedi’s depreciation has affected our operations because a lot of our inputs are dollar-denominated, so our cost has risen and the value of the money we make has also dropped,” he said.
Ghana’s cedi has overtaken the South African rand as the worst-performing currency in Africa this year against the dollar, according to Ecobank Research. It has lost 17 percent to the US dollar on the forex market, compared to 16.2 percent depreciation by the South African rand.
This has happened in spite of the US$1.5billion Cocobod syndication loan and the Eurobond sold by government -- both of which have boosted the Bank of Ghana’s reserves. Analysts say the currency will remain under further pressure from large fiscal and current account deficits.
Since Airtel will not close its books until March 2014, Mr. Sowah said he could not give figures on how the depreciation has impacted its financials.
But the Chief Executive, who was speaking at the presentation of a third BMW car to the latest winner of the company’s “Supa Star” promotion, remained optimistic about prospects for next year, saying the company will target expansion in two critical areas -- data and mobile money -- which are seen as the future of the business.
“Moving forward, for us, we are quite excited about the business. Our data business is doing really well, and we are really putting a lot of investment in there and beginning to see some returns.”
He said Airtel is testing higher data speeds of 42 megabits per second, which will help to boost its already high speeds of 21 megabits per second.
“Another area of focus is Airtel Money,” he said. “We believe that Airtel Money is very important to the future of our business, so we are pushing it aggressively.”
Twenty-five year old Gladys Baffour, a native of Kintampo in the Brong Ahafo Region who resides in La, Accra, won the third BMW car in the “Supa Star” promotion.
Several Airtel users also won Samsung phones, cash, shopping vouchers, and trips to Brazil.
Airtel has extended the promotion by eight more weeks into the festive season to give its customers a lot more to celebrate, Mr. Sowah said. “We have over the years had one promotion or another during the yuletide, and we don’t want this year to be any different.”
