Airtel Africa Aktie

Good day, ladies and gentlemen, and welcome to the Airtel Africa Q1 2027 Results. [Operator Instructions] Please note that this event is being recorded.

I would now like to hand the conference over to Sunil Taldar. Please go ahead, sir.

Thank you very much, and a very good afternoon, good morning to everyone, and welcome to the call. Thank you all for joining us on the call today. I'm joined on the line by Kamal Dua, our CFO; and Alastair Jones, our Head of Investor Relations.

We will shortly be answering your questions. But first, I would like to provide you with a brief overview of the quarter's performance.

I'm very pleased to report another strong quarterly performance, which reflects the continued underlying demand across our business and the sustained focused execution, enabling us to capture the opportunity. Key to this performance has been our focus on providing a best-in-class customer experience, and the results reflect the benefits of our long-term investment strategy, which continues to deliver value to all our stakeholders.

We delivered strong growth across voice, data and mobile money, supported by an acceleration in the customer base growth across all segments as adoption of digital and financial services continues to gather momentum. At the same time, we have accelerated investment in our network to strengthen coverage and capacity, ensuring we remain well positioned to capture the significant growth opportunities across all of our markets.

Group revenues reached $1.85 billion, growing by over 21% in constant currency despite no longer benefiting from the Nigerian tariff adjustments, which underscores the breadth of growth opportunities across our markets. With a more stable macroeconomic environment supporting an appreciation in most of our currencies, this translated into reported currency growth of 31%. This level of growth is not specific to just one segment. This is a broad-based trend reflected in the strong performance of both the Mobile Services and Mobile Money segments.

The Mobile Services segment recorded constant currency revenue growth of 19.1% as our customer base increased by 11.6%, an acceleration from the prior quarter. The ability to grow our customer base by this amount showcases the sustained demand and low levels of SIM penetration across our markets. Key to our strategy is driving increased digital adoption and one metric we constantly track is smartphone penetration.

We've seen smartphones on our network increased by over 24%, with penetration increasing by over 5% to 51%. This increased adoption of these smart devices continues to translate into strong data traffic growth across our network, driving data ARPUs up by 10.3% in constant currencies and data revenue increasing by 27.2% in the period.

The mobile money business remains a key pillar of group's existing and future growth potential. The quarter's performance was another example of the scale of the opportunity before us and of our team's ability to continue capturing this opportunity through strong execution, ongoing innovation and a relentless focus on the customer experience. In reported currency, annualized TPV exceeded $245 billion, increasing over 51% in reported currency as we continue to expand the ecosystem to drive more use cases, increased customer engagement and expansion of our digital offerings. Mobile money revenues grew by 25.8% in constant currency despite the ongoing impact arising from the intra-group agreement changes.

On a regional basis, the growth rates also read well. In Nigeria, revenues increased by 29.8% in constant currency and over 50% in reported currency. This quarter, the growth rates do not incorporate any benefit arising from the tariff adjustments, reinforcing our confidence in the long-term growth potential of the Nigerian business. East Africa revenues increased by 17.8% with robust trends across all segments and Francophone Africa growth of 18% continues to reflect the step-up in investment over the last few years and the strategic focus, which has helped sustain this high level of growth. While our strong revenue growth demonstrates the demand for our services, it is equally important to highlight how this growth is translating into profitability.

Let me now turn to our EBITDA performance and the factors impacting it during the quarter. In the quarter, we have maintained EBITDA margins of over 50% with EBITDA of $928 million, growing 24.4% in constant currency and 36.6% in reported currency. EBITDA margins increased by over 200 basis points over the prior year, which again reflects the strong revenue growth and the sustained focus on our cost optimization initiatives, which is translating into real savings across the group while not compromising on our ability to capture the revenue opportunity.

Our quarter 1 EBITDA margin of 51.1% was marginally below the 50.3% margin reported in quarter 4 of last financial year, but clearly showcases our ability to offset a large portion of the rising fuel costs through a continued focus on cost initiatives. As we noted at the time of full year results, the developments in the Middle East have resulted in a steep increase in fuel costs, which has impacted the margins during the quarter. However, we will expect to see a further increase in margin pressure as the higher energy costs are captured into many of our tower contracts in quarter 2.

While there may be some pressure on margins in the near term, we retain our relentless focus on further cost efficiencies, supported by continued revenue growth that should help moderate this effect. Despite our strong balance sheet and very modest leverage of 0.5x, we have continued to actively optimize our debt portfolio. Coupled with a more favorable interest rate environment and an improved currency mix of borrowings, our effective interest rate declined by 282 basis points to 10.1% at the end of the quarter, lowering our overall cost of debt and further strengthening our financial position. Excluding exceptional items, our earnings per share came in at $0.054, up 57% over the year, which reflects the success I've been discussing with basic EPS of $0.044 in the period, a growth of 27.3%.

One of the most important aspects of this set of results is our CapEx spends. We have reported CapEx of $389 million in quarter 1, a substantial increase from the $121 million in the previous year and reflects our increased CapEx guidance, which we set out at the beginning of the year. This accelerated CapEx spend is a very clear part of our strategy, where we continue to see a substantial opportunity for growth, and it is right that we accelerate spend in order to capture this growth. We have, therefore, purposely brought forward investments into quarter 1 as we proactively invest ahead of demand.

This CapEx is actively focused on the quality of network experience for customers with coverage and capacity remaining key components of the spend. Furthermore, new and emerging opportunities in enterprise, HBB and data centers continues to be a focus as well. We remain compelled by the opportunity to continue investing across our markets as we continue to see benefits accruing to our business. Importantly, despite the significantly higher CapEx spends over the year, we have maintained a similar level of operating free cash flow in the quarter compared to the previous period, reflecting the strong trends in both operating and financial trends.

I know many of you are interested in our IPO of the Airtel Money business. And so before handing over to the Q&A, let me give you a brief overview of where we are with the IPO. The first thing to say is we are progressing very well with our preparations and our intention remains to undertake the IPO during 2026, subject to market conditions. Following an extensive review of the major listing venues, we can confirm that London is our preferred listing location.

As many of you know, London provides access to a very broad international investor base with a strong experience of investing in emerging market assets, but also a strong understanding of the fintech and payment sector, providing a suitable platform for Airtel Money to be valued appropriately. Over the next few months, we will be updating the market at the appropriate time of the expected time line and structure of the IPO in accordance with our regulatory and disclosure obligations.

Before I hand it over to the Q&A, just to summarize a few key points. Firstly, these were strong results with constant currency revenue and EBITDA growing by over 21% and 24%, respectively, translating into 31% and 36.6% reported currency revenue and EBITDA growth. The structural demand for digital connectivity and financial inclusion remains very compelling. The foundation is expected to continue supporting the financial and operating momentum in the near to midterm. Airtel Money continues to scale with strong results reflecting the truly unique business opportunity, and we look forward to providing more detail on the upcoming IPO of Airtel Money later this year.

And finally, we have accelerated our investment to capture the significant growth opportunity that is available to us, and we believe this will put us in a much stronger position to showcase our ability to capture the structural growth potential. We are excited by the future, and we see a unique opportunity to sustain strong levels of growth going forward through the continued and consistent deployment of our strategy. We look forward to reporting on our successes in the future and continuing to generate value for all our stakeholders.

And with that, I would now like to open the line for questions, for which I'm joined by Kamal. Operator, I now hand over to you to facilitate the Q&A session, please.

[Operator Instructions] The first question we have is from Rohit Modi of Citi.

Congratulations on strong set of results. I have a couple, please. Firstly, Nigeria growth. Now that you're already lapped completely the price increases from last year and kind of 29% to 30% growth that you have reported. Is this the kind of run rate that you're expecting for the rest of the quarter, which is like pretty much similar to what you had before the price increase? So is this kind of trajectory that you see for the rest of the year? And then I believe there's also -- there might be some impact coming from the ban on airtime advances. So if you can just give a color on that, how much that impact was on the top line?

And second question is basically the impact from diesel cost. You flagged it last quarter given Nigeria diesel prices doubled in a few months, which remains -- oil prices remain still high. How much impact have you seen from diesel in this quarter? And what are your -- what kind of margin dilution that we can expect if the diesel remains at the same level right now for the next few quarters?

And lastly, sorry, coming back again from last quarter's question on capital allocation policy. I understand your leverage is like 0.5 now and your dividend policy is quite growth. But then are you looking at any other investment opportunities beyond the CapEx envelope, maybe in other markets or other segments? If you can give any color around that would be great.

Thanks, Rohit. Thank you for your questions and your comments.

First of all, let me talk about the Nigeria growth. Nigeria is the largest market in our portfolio and offers significant opportunities for growth. We see both opportunities. There is still a very large penetration opportunity in Nigeria and also an upgrade opportunity in Nigeria, and that seems to be driving growth. We also see opportunities with respect to home broadband is a significantly large opportunity. B2B is another opportunity. We have also announced a large data center, which -- where the construction at this point in time is currently on.

So from an opportunity point of view, we see a large opportunity in Nigeria, and we are -- we continue to invest very, very aggressively in Nigeria. While we don't comment on future guidance, but our efforts are making sure that we continue to maintain our investments to capture the big growth opportunity that Nigeria has to offer, and we should continue to see strong growth in Nigeria.

Specific to your question on ACS, as last quarter, according to -- as per the guidance from the regulator, which was applicable industry-wise, there were a certain selected set of vendors who provide airtime credit service, which are basically micro loan products were permitted. As a result, we had to disengage with a few vendors, which were not permitted by the regulator to provide these services. The revenue impact for the overall group at Airtel Africa was very minimal.

Now what we have done is in the last quarter, they were -- as -- according -- as per the regulators' guidance, we've onboarded the approved vendors and the services are back on track. So therefore, there is no impact that we expect in quarter 2 because of this slight disturbance that we had in the first quarter in Nigeria.

With respect to your question on capital allocation and other opportunities, we continue to explore inorganic growth opportunities. Right now, what we have identified is a big investment opportunity around home broadband, where we are scaling up our investments in Nigeria and across the group. The second is B2B data centers is another opportunity. A significant opportunity remains, as you kind of alluded to, on expanding coverage and adding capacity. One area where we're investing significantly now very aggressively is deployment of 5G sites, primarily to support our FWA ambitions in Nigeria and across the group.

Kamal, do you want to address the fuel cost?

Yes. Thank you, Sunil. Rohit, so as has been disclosed in the last quarter, the impact on the margin on the fuel price basis, the run rate at that time was roughly 2.5%, 3% on our EBITDA margins, of which roughly half of the impact has flown in this quarter and the rest will follow in the next quarter, subsequent quarter 2, you have seen a large portion of that impact had been mitigated through our volume-based program and the scale which we are getting it. Now in quarter 2, how much we would be able to mitigate it further is yet to be seen. But definitely, our endeavor would be to mitigate to an extent possible the impact, which will be coming up.

And to answer your question on if the fuel price continues at the current level, what would be the incremental impact? See, all are as per the contracts, the quarter 2 rates have already been locked basis the fuel price, which has already been recorded. We have seen some slight softening of the fuel price in Nigeria. And if it continues the way it is, we'll see some marginal respite, which will be coming in, in quarter 3, not in quarter 2 because of the way we have structured our contracts.

So I hope I've answered your question.

The next question we have is from Mollie Witcombe of Goldman Sachs.

Firstly, sorry to just come back on CapEx. Obviously, you front-end loaded your CapEx, and I understand that you're reiterating guidance at present. But is there any scenario where later in the year, stronger demand or competitive investment could push guidance out of the guidance range? Just a little bit of color on how you're thinking about that, especially against the backdrop of the diesel prices and the macro challenges that you're experiencing?

And then secondly, and apologies if I missed it, just to come back to Rohit's question, apologies if I missed the answer. I didn't hear if you said anything about exploring potential M&A options given the strength of your balance sheet and the current leverage.

So our CapEx guidance for the year continues to remain $1.1 billion, which is something that we highlighted last quarter. What we have done this year is we have actually front-loaded our CapEx and this kind of -- what it does -- about $389 million of CapEx in quarter 1 so that we continue to get the benefit of these investments over the next 3 quarters. So it's really a phasing more than anything else as we see it, but our guidance for the year remains at $1.1 billion.

On the other question that you asked, which is on other M&A opportunities, we have the strength of the balance sheet, which is there, and we continue to explore opportunities across other markets as well. As and when we see something which is very attractive and the right one for us, we will surely evaluate that and look at those, but it has to be a sizable opportunity for us.

Other than that, we continue -- as I said, we continue to invest behind the growth opportunity that Africa has to offer, which is across, as I said, B2C, whether it is in the mobile business or in the money business, B2B data centers and there are other opportunities in B2B and most importantly, on home broadband. But we continue to look at, explore opportunities, M&A opportunities. As and when anything appears, we'll surely look at that.

The next question we have is from John Karidis of Deutsche Bank.

Thank you for the additional disclosure of mobile money customer mix. I just wanted to ask you one question about satellite operators. You've addressed this a number of times in previous conversations. But a recent IPO has sort of rekindled investor concerns about the satellite operators potentially becoming bigger rivals or rivals to network operators such as your good self. Would it be possible, please, to advance what you've told us to date and maybe specifically address key asymmetries and things like network capacity, also network economics, device economics and distribution muscle?

Yes. Thank you very much for your question. We see satellite as a complementary technology, which especially in a continent like Africa and the markets that we operate in, can be accretive when it comes to delivering customer experience, acquiring new customers and by expanding our coverage. And that is the reason why -- and we formed this view after doing a full assessment of the entire technology and also after talking to our technology partners.

In our view, this technology is, as I said, is complementary in nature. And that is the reason why we signed 2 agreements. And I'm sure you're aware of the nature of the agreement that we signed with satellite. It's actually a 3-part agreement. One is to provide internet enterprise connectivity to our customers in areas where it is economically either unviable or difficult to lay down fiber. It allows us to offer enterprise connectivity to our -- especially the SME segment. And that's something as we started offering the services, the customers have responded very positively.

Second is for Africa, this technology allows us to address our backhauling concerns or issues that we have, especially in remote areas where we are not able to carry traffic. Now this is something that we have now started backhauling using satellite technology, especially SpaceX at a significantly lower cost. That is helping us to solve a big problem that we had in the past. And you will hear more about this as we start to roll out backhauling across more markets.

The third was with respect to direct-to-device. The way -- direct-to-device, there are 2 or 3 things that I want to highlight here. First and foremost, the direct-to-device, the service that we will offer, we've signed a contract with SpaceX, which covers all our 14 markets. Airtel customers in these 14 markets, once we launch the service, and this is subject to regulatory approvals, using their existing 4G or 5G devices, once they leave the terrestrial coverage, they will connect to the satellite coverage. And once they come back from the satellite into the terrestrial coverage, they will come back on our network. So that's how the technology works.

The customers will be able to use their existing devices, 4G or 5G devices. The service that they will get, which is the Gen 1 service that once we launch at this point in time, which is available from SpaceX, is text messages and OTT calling on certain apps on the satellite coverage. So customers will remain connected. It's a Gen 2, which will happen in 2028 and beyond. So the current time lines are in 2028 is when customers will be able to do the calling.

Now -- so that's how we see this. And obviously, there is a -- for the spectrum, the spectrum actually, the satellite operator kind of relies on our spectrum. The customer -- the entire customer experience, the onboarding of the customer, end-to-end process is managed by the mobile operator. So that's how the technology works. And as I said, that we see this as a complementary technology to enhance customer experience, and that is the reason we are -- we've signed this agreement to offer this service to all our customers across our 14 markets.

The next question we have is from [indiscernible] of 361.

Congrats on the results, Sunil and team. I've just got 3 questions. First, just focusing on Nigeria. We'll only know MTN's numbers next week, but just looking 2 quarters back, your effective data pricing seems quite attractive, yet your growth rate in Nigeria is still lagging that of MTN. I mean, is there anything that you guys are doing to actively try and close that gap? And what levers are you trying to pull? And how successful has that been?

The second question is around the oil prices. You mentioned the impact on diesel for your tower costs. But in the markets that you guys are operating, is the higher oil price not coming through in inflation that's impacting the demand for telco services. So basically, I mean, how has your top line been affected from the consumer given that oil prices are up and inflation is probably up?

And then your last question is, I don't know if you can share with us what percentage of your network uses IHS as a tower provider? And does the deal with MTN in any way affect your CapEx expansion plans given your CapEx envelope that you have for this year?

Thank you very much for those questions. While I will not comment on MTN's performance, we will surely talk about our own performance. If you look at our performance, we are very pleased with the way the business is tracking, while there is a significantly higher -- big opportunity that Nigeria has to offer. Our current data revenue growth of about 38% is in Nigeria is very, very satisfying. Voice revenue continues to grow at about -- in very strong numbers at 23%. We are seeing data consumption per sub also continues to grow. And there are efforts being made to capture more demand by very strong investments in network that we are doing in Nigeria at this point in time, both in terms of adding capacity to support this very strong data consumption growth that we are seeing. So business will continue to track as per expected lines is what we're seeing right now.

On your question on oil pricing, oil prices kind of impacting customer demand, it is actually evident that if you look at the voice usage per customer, while there is a marginal decline, but voice usage per customer continues to remain very strong. Data consumption per customer continues to remain very, very strong. We are seeing very strong upgrades, which is reflected in our smartphone customer base growth. Smartphone penetration has increased.

So at this point in time, while we are seeing oil prices driven inflation, overall, we have not seen any softening in the demand, and I'm alluding more to the consumption across services, including our transaction value per customer on the money side. So at this point in time, we are not seeing -- we continue to see -- and there was a question last call, if I remember, on whether we will see softening on upgrades. We are not seeing -- we continue to see upgrades, and that seems to be fueling demand. And that's where we are right now from a customer demand point of view.

On the IHS, we continue to engage with MTN on -- first and foremost, the important thing is to make sure that our services remain uninterrupted. And MTN is right now in the process of completing this transaction. At the same time, the way we see it is, we see no reason to believe that owning and running their own infrastructure by MTN will have an adverse impact either on the performance of our network or on overall capital allocation from our side because I think what you're alluding to is primarily on sharing of sites because of sites are available, whether it is MTN or IHS, sharing sites should be available to us because our understanding is they have acquired this business to make sure that this business independently remains profitable.

And no tower company, whether IHS or any other tower company, will be able to run a profitable towerco business on single tenancy. And most markets have either 2 or 3 operators at least on our footprint. So we will continue to see interdependencies across each other. And therefore, we are less concerned about either any impact on our service levels or on cost or capital allocation at this point in time.

And then sorry, Sunil, just a follow-up on that. I mean, are you able to share like what percentage of your network is shared among the various tower operators?

We don't share that information, our share of towers across tower companies.

[Operator Instructions] The next question we have is from Maddy Singh of HSBC.

Congrats on strong numbers. I have a couple of follow-ups and a few points where I need some clarity. Follow-ups are very simple. On mobile money IPO, have you suggested any timing update? What's the time line as of now? And then second one, on the airtime advance impact in Nigeria. So you said that it is immaterial at the group level, but if you could also quantify at Nigeria level, that will be helpful. And then a follow-up on the M&A question. Would you be willing to participate in any in-market consolidation efforts in Nigeria fintech space, especially? So if you could give any comments there.

And then a couple of questions where I want your inputs. On the CapEx side, very interesting to see the front-loading of CapEx. But I was wondering whether this decision is also driven by, let's say, your demand actually running ahead of capacity. So if you could comment on your -- have you seen demand -- strong demand growth, but capacity not available to monetize that? And if that is what is driving this front-loading of the CapEx in Q1?

And then second one is on the -- we have seen that news about Indus Towers looking to get into Africa. So your incremental CapEx and site rollouts, have you already factored that into your strategy that some part of that probably you will do with Indus Towers or it is primarily going to be with the existing strategy? So any comments on the Indus Towers coming into Africa and any change in your strategy around that?

Thank you very much for your questions. Let me just respond to your first question, which is on mobile money IPO timing. Subject to market conditions, we are committed to IPO Airtel Money in 2026. So in the second half of this year, we are committed to doing the IPO. As I said, this remains subject to market conditions. On the ACS impact in Nigeria, the impact was mitigated. And therefore, we don't expect to see this continuing in the second quarter. As I said, it was a temporary kind of disturbance that we had in the business, and we have onboarded the new partners and the services are on.

On the in market, you asked about in Nigeria, are we open to looking at, say, for example, any fintech opportunity? As I responded to the question earlier that was asked to me, we are absolutely looking at acquisition opportunity or inorganic growth opportunity across mobile money and GSM both. As and when we have an attractive opportunity where we think it is synergistic to our business, there is no reason why we will not go after that, especially our balance sheet today is supporting us. Absolutely, we have a strong balance sheet today.

Then your question on this CapEx. The CapEx really is, as I said, it was -- if you look at the nature of our business, if you deploy CapEx upfront, there is always this opportunity for -- and there is a significant amount of work that went behind to make sure that we have a good start to the year. And that's the reason why we front-loaded with the CapEx. There is nowhere that our network is actually chasing demand. It's a very strong process that we run to assess where the demand will come from, given the long lead times that we have in terms of CapEx requirement. So it's very rare, very, very rare that it happens where your capacity comes under constraint. So it is not a situation of actually demand ahead of our capacity.

What we are actually doing is we are proactively investing in capacity to be able to service demand going forward because when you look at an aggregate level, 50% plus growth in overall data that we are carrying, that actually necessitates us to invest ahead of demand, and that's something that we are doing. And as we are investing, the market is responding and the customers are responding because we are also able to expand coverage at capacity and deliver a great experience.

On Indus Towers, just to give the full context, Indus has -- Indus Towers announced entry into 3 markets, which is Nigeria, Uganda and Zambia. We are currently -- we are starting operations in Zambia and operations in Indus Towers will soon start in the other 2 markets. We will -- what we have said is subject to overall commercials, we would be the anchor customer for Indus Towers. And there is -- with respect to the capital outlay, I don't see there is any difference because eventually, Indus Towers will be another tower company, which will meet our requirements.

The capital will be -- capital allocation will be a function of our need for expanding our coverage or investing in our capacity in the networks. So that's the way I see it. But the way we see it is Indus might bring in, for example, some new solutions given their expertise in a very large market that they come from, that is India. And we see some operational efficiencies to accrue to us. But from a capital allocation point of view, it should primarily be a need-based depending on the need for us to expand coverage of our capacity.

The next question we have is from David Lopes of New Street Research.

Actually, I have just one on your home broadband strategy. I was wondering if you could comment on maybe the proportion between fiber-to-the-home and fixed wireless access? And on fixed wireless access, it would be helpful if you could comment on how is the price of the equipment going? I mean is the price of the box still going down, or is it going up given some chipset shortages? Yes, any color on that. And maybe what's the cost of the equipment? That's more direct question.

Thank you very much. So let me just give you a little bit of a perspective on the home broadband business. It's a very large opportunity in our footprint. It is -- the current penetration of home broadband is circa about 2% or so. And there's a large customer base or high-value base, which is the addressable base for this opportunity. When we explore all options to offer the service to our customers, FWA, given the topology of -- in Africa and the current usage patterns, FWA is the right solution for us to offer -- is the right technology to offer the service to our customers for home broadband.

And for that, what we are doing is we are investing very aggressively on 5G network in our markets. And we started the service -- offering this service in most of our markets, and we're getting very good response. And we see this opportunity across both B2B as well as B2C. B2B predominantly is in the SME segment. But for some very selected clusters where we see high demand and high usage, what we are also doing is we are deploying fiber, but that number remains relatively much smaller. Primarily, the demand is being serviced through FWA, which is where we are right now. And we are -- as I said, we are rolling out 5G sites to support FWA and meet this demand.

With respect to the device, the cost of the device, I'll not be able to share the cost of the device, but the other question that you asked, yes, the global chipset pricing is putting pressure on the cost. For this year, we are by and large covered, the inventory and the contracts that we have. But over a period of time, this -- the cost as it is going up across the market, across the world will also be impacted by that. But given the nature of the business, this is something that we factored in the business plan and it meets our payback period requirements. So therefore, we continue to push behind this particular opportunity. And we remain very, very optimistic about the home broadband opportunity in Africa, especially on our footprint.

The next question we have is from Desmond Gabriel of WSTC Financial Services.

So during the presentation, I heard something about an IPO. So I wanted to ask what it is about? If I can get details about it.

Yes. Thank you very much. The IPO that I was talking about is the IPO for our Airtel Money business, which is something that we said that our preferred location is London, subject to -- and timing is about before the end of this year, subject to market conditions.

Ladies and gentlemen, we have reached the end of the Q&A session. And I will now hand the conference back to Sunil Taldar for closing remarks.

I would like to thank you all for joining this call, and I look forward to speaking to you again at the time of our half yearly results. Thank you once again.

Ladies and gentlemen, that concludes today's conference call. Thank you for joining us. You may now disconnect your lines.

Good day, ladies and gentlemen, and welcome to the Airtel Africa results for the year ended 31 March 2026. [Operator Instructions] Please note that this event is being recorded.

I will now hand the conference over to Sunil Taldar. Please go ahead, sir.

Thank you very much, and a very good afternoon, good morning to all, and thank you once again for joining the call today. I have with me Kamal Dua, our CFO; and Alastair, Head of Investor Relations.

Let me give you some brief highlights over the last year before running through our strategic and operational achievements, and how this has translated into a strong set of results that we have reported today. After that, I will hand over to Kamal to run through the financials.

Over the last year, our performance has been supported by a much more stable macroeconomic and currency environment. This has been a very welcome development and has allowed us to clearly demonstrate the growth opportunity across the region and how the deployment of our strategy has enabled us to capture a strong share of this opportunity. While this improved backdrop is supportive, it remains critical that we continue to sharpen our strategic focus to ensure the business remains resilient, but also that we continue to offer an attractive customer proposition.

Against this backdrop, we have delivered strong momentum across both the operational and financial performance. This resulted in very strong constant currency revenue growth of 24% for the year and almost 30% in reported currency as currencies appreciated in a number of markets. This strong revenue performance, combined with continued cost efficiency success translated into a 49.3% EBITDA margin with an all-time high margin of 50.3% in quarter 4. This performance would not have been possible without our continued focus on disciplined CapEx investment.

We delivered CapEx in line with our guidance, and given the scale of the opportunity, we will continue to invest at a deliberated level to future profile business.

Finally, the strong operating performance has translated into strong free cash flow generation, further strengthening the group's capital structure and enabling the Board to declare a further 9.2% increase in the dividend.

We are transforming millions of lives across Africa by delivering essential telecom and financial services. This slide serves to highlight the key components of our performance over the last year, reflecting how we have executed against the opportunity and offer across our markets. Firstly, the scale of our business is reflected in the 183.5 million customers we now serve across our footprint, an increase of over 10%. Smartphone penetration continues to rise, reaching 49.5% as digital inclusion becomes more widespread.

Secondly, our ambition to drive financial inclusion is clearly evident in the 21% growth in the mobile money customers, which reached 54.1 million. That growth, together with continually evolving ecosystem has been a key driver of annualized transaction value of $215 million, up almost 50% year-on-year. This operating performance has been the formulation of a strong financial performance, which I reflected on the previous slide.

Importantly, our capital structure remains strong, which gives us the flexibility to continue to invest across our network with these adjusted leverage down to 0.5x. We are in a strong position to accelerate network investments while also enabling shareholder returns.

This slide brings together what has been an exceptional year for the business and levering 3 important milestones, all of which reflect significant achievements. Firstly, reflecting on the strong demand across our markets and our ability to capture a higher share of the opportunity, we saw customer net additions reached 17.5 million. Secondly, we delivered very strong revenue growth, underpinned by strong momentum across both our telecom and mobile money business. And thirdly, our EBITDA margins increased 280 basis points to 49.3%, demonstrating our ability to transfer that growth into improved profitability and reflecting continued success in our cost optimization program.

These outcomes are clearly supported by favorable industry fundamentals including growing data demand and increasing digital adoption across our markets. However, just as importantly, they reflect the disciplined execution of our strategy. Our focus on network investment, customer experience, digital inclusion and cost efficiency is delivering tangible results, and we are seeing consistent benefits across both the top and bottom line. Taken together, this performance highlights not just a scale of the opportunity ahead of us, but also the capability of the organization to execute effectively and deliver sustainable growth since our listing in 2019.

Let me now spend a few minutes explaining the significant opportunities across our markets and how our strategy will enable us to continue executing on this opportunity. Many of you will recognize this slide, which sets out the key elements of our strategy. Our approach is designed to ensure we continue to advance the significant opportunities across our 4 markets while delivering sustainable and profitable growth that creates value for all our stakeholders.

The 6 strategic pillars focus our investment and the expertise of our talented people from the core activities that will unlock this opportunity. This is supported by a continued emphasis on cost optimization, progress against our sustainability objectives and ongoing investment in developing our people, and the center of our strategy are our customers. Our success is driven by offering them a great experience, which is why everything we do is designed with the customer firmly in mind.

Slide 8 brings together the key strategic achievements from the year and importantly shows how they are buying directly with the strategy I outlined in the previous slide. While every achievement on the slide matters, I would highlight 2 areas where we have been particularly focused. The first is delivering a brilliant network experience for our customers. During the year, we increased CapEx investments by over 13%, reflecting our continued commitment to network quality, coverage and capacity. Alongside this, we have also been very active on partnerships. In particular, our innovative partnership with Starlink is expected to further enhance coverage, especially in areas where our terrestrial network is not yet rolled out, helping us to exchange reach and improve service -- improve service resilience.

The second area of focus has been future-proofing the business to support sustained growth. This includes actively investing in new growth opportunities such as home broadband and data centers. These adjacencies leverage our core infrastructure and capabilities and position us well to meet evolving customer needs over the medium term. These initiatives reflect both our clear strategic focus and strong execution, and they have played an important role in delivering these -- the achievements I highlighted earlier.

Slide 9 gives a good overview of how we are using AI and technology across the business to support our strategic priorities particularly with regards to customer experience, securely enhancing growth -- security enhancing growth and driving efficiencies. At a high level, digitization is helping us. Both enhance the customer proposition and simplify the customer journeys. We're using digital tools and data insights to better understand customer behavior, personalized offerings and improve how customers interact with us, making experiences more intuitive and more relevant.

From a network perspective, we are increasingly deploying advanced analytics to inform where and how we invest. These network analytics, combined with on the ground insights help us prioritize site deployment and optimize performance, ultimately supporting coverage, quality and growth. We are also applying technology to drive greater efficiency across the business. In particular, AI enabled network optimization tools are helping us reduce energy consumption and manage energy costs more effectively, which supports both margins and our sustainability objectives.

Taken together, these initiatives illustrate how digital capabilities are becoming an integral part of how we operate, improving customer experience, strengthening the network and driving efficiency while remaining firmly aligned with our broader strategy.

The growth framework on this chart depicts how our operational success has been achieved and also explains how we intend to sustain strong growth momentum going forward. The growth in the customer base across all segments, combined with increased ARPU as increased usage is monetized translates into strong revenue growth. Operational leverage and cost optimization drives increased resources for investment to reinforce future growth, therefore, enabling continued customer base growth. This virtuous cycle will continue to sustain our growth operating momentum in the future.

As a group, we need to be very clear in how we aim to capture this growth, and our consistent focus on our strategy has helped unlock this growth, and we remain optimistic on the future outlook.

Let me now spend a few minutes talking about each of the business segments and the regional performance. Firstly, the mobile services business, despite the business growing by 18.5% CAGR over the last 5 years, this chart highlights why we still remain positive on the growth outlook. At a high level, we operate across a population of around 680 million people. And importantly, the demographics across our markets are highly attractive. The median age is under 20 years compared with over 42 in developed markets. This highlights the scale of the future customer base coming through our markets and supports our confidence in the long-term outlook.

This favorable demographic profile, combined with still relevantly low smartphone penetration continues to underpin strong growth in data customers. It also supports increasing data usage as both new and existing customers increasingly adopt a wider range of data and digital services often for the first time.

This slide is a snapshot of the growth we have achieved in the mobile services business over the last few years. Providing enhanced coverage and capacity and our investment into the distribution network is all fundamental to being able to provide a customer experience that will not only maintain loyalty, but also attract new customers to our -- to our network. This is all supported by the initiatives we have spoken about around digital innovation and simplifying the customer journey, driving accelerated data customer growth.

During the period, we saw data traffic increased by almost 50% as usage per customer continues to rise to 9 GB per month. The sustained data demand story has supported the 35% growth in data revenue, which has now become the biggest component of revenue for the group underpinning the future growth trajectory.

For mobile money, the growth opportunity is again very competitive. Many of you will be aware of the low levels of financial inclusion across our markets, with only 35% to 40% of adults owning a bank account compared to over 19% in more developed markets. Furthermore, as business scales and as we continue to enhance the ecosystem offering, we will see increased engagement on platform driving increased transaction value. Importantly, only around 30% of our customers are currently actively using the mobile money services, showcasing the amount of growth runway left as we continue to drive financial inclusion across our base.

What I mentioned in the previous slide -- what I mentioned in the previous slide is clearly playing out in terms of our operating and financial performance. The opportunity, the distribution reach and a scalable customer-centric platform gives us the ability to offer a range of different services, which is ably supported by deep loaded partnerships, which can unlock new growth opportunities and drive the business to new levels. This, combined with continued innovation and the rollout of digital offerings has seen an accelerating uptake in customers with annualized transaction value in quarter 4 over $215 million and ARPU is up 9% in constant currency terms. The result has been a strong 28% growth in revenues, which has once again been sustained over a number of years, indicative of the opportunity this business [ follows ]. Existing for the intragroup agreements which have been revised, the growth would have -- would have come in about 31%.

Let me briefly touch on how our mobile money business has evolved and is likely to continue evolving in future years. Our business mix has evolved meaningfully as we continue to [indiscernible] and introduce products that have been rapidly adopted by our highly engaged customer base. This is particularly evident in payments and transfers, which now account for 42% of revenues, up from 35% 5 years ago and have delivered a 5-year CAGR of 34%. We are also encouraged by the progress in our Financial Services segment, which reflects more recent innovations across areas such as bank wallet, lending, savings, wealth and insurance. This segment has grown at a 5-year CAGR of 55% with growth of 61% in constant currency over the last year -- over the last year.

Overall, this mix shift reflects maturing customer cohorts, adopting a broader range of use cases and supports our continued evolution towards a more diversified, resilient ecosystem with higher monetization for the user.

Let me now briefly run through the regional performance, which includes both mobile money and mobile services. We've continued to see strong operating momentum in Nigeria with customers increasing around 10% and ARPUs growing by almost 37% in constant currency terms. We are very encouraged by the macro stability that has returned to the Nigerian market, which has enabled us to report these strong trends. While the tariff adjustments supported by the regulators have certainly benefited our performance, we have seen sustained usage growth, particularly in data, drive strong constant currency revenue growth performance of 47.5% in the period.

EBITDA margins have increased by almost 8 percentage points as a strong revenues, improved macro, stable diesel prices and execution of our cost efficiency measures have taken hold, translating into a 70.5% growth in EBITDA in constant currency.

In East Africa, our largest region, trends remained strong with constant currency revenue growth of around 18% despite the high base. What we have also witnessed in the region is some appreciating currencies, which resulted in reported currency growth of 24% for the range. Once again, the strong subscriber growth and increased usage of our services, which has driven rising ARPU has been the foundation of this strong growth with EBITDA margins rising to over 53% in the period.

And finally, in the Francophone region, performance has remained strong despite the stronger comparables. We have been seeing a clear turnaround in the performance in the region driven by consistent focus on driving base level growth through the relentless focus on our strategy. This, combined with increased adoption of services has contributed to an ARPU increase, strong revenue growth of 17.1% in constant currency and EBITDA margins rising to 44%. Currencies also benefited from a depreciation, resulting in reported currency revenue growth of 21.5%.

Before handing over to Kamal, let me briefly touch on the opportunity in enterprise and home broadband and what we are doing to capture this. Starting with home broadband, penetration across our markets remains very low at around 2%, which provides a clear and long-term runway for growth. Importantly, this is not just a theoretical opportunity. There are more than 13 million households across our footprint that can afford a broadband connection and our innovative home broadband offerings are resonating strongly with customers.

Turning to enterprise. The opportunity is equally attractive. During the year, we continued to build out data center capacity at scale in Nigeria, Kenya and DRC given the structural growth opportunity across our markets. Furthermore, the rollout of fiber to almost 18,000 kilometers provides the resilient, high-capacity connectivity that enterprise customers increasingly require supporting mission-critical applications, improved reliability and secure access to global networks. Overall, these opportunities play directly to our strengths, leverage our existing infrastructure and capabilities and reinforce our confidence in the long-term growth potential across both segments.

Hopefully, this clearly summarizes our position across the market and reflects the performance we have achieved over the period. Importantly, we believe in our strategy and the execution of the strategy is integral to capturing these opportunities.

Let me now hand over to Kamal to run through the financials.

Thank you, Sunil. Good morning. A very good afternoon to all of you. I'll start with the key financial highlights. Overall, we have seen a very strong years performance in revenue growth and EBITDA margin, which was also supported by a relatively favorable macroeconomic in most of our markets. Revenue for the year crossed $6.4 billion, which have grown by 29.5% in the reported currency and 24% in the constant currency. The reported currency growth has been benefited from the currency application in most of our markets. But the strong growth in constant currency reflects our continued strategic success as outlined by Sunil in the earlier part of the presentation.

For the quarter ended March, the constant currency revenue growth of 22.3% was lower as compared to the prior quarter as we partially lapped that idea tariff benefit during the quarter. EBITDA at [ $3.16 billion ] in the reported currency grew by 37.2% during the year. EBITDA margin at 49.3% improved 280 basis points in the reported currency as a result of continued operating momentum, sustained benefit from our ongoing cost efficiency program and a relatively stable macroeconomic environment.

EBITDA margin peaked at 50.3% in quarter 4, which was an increase from 47.3% in the prior period. The business generated $803 million of free cash flow during the year, which is nearly 4x higher than the prior period. The strong performance was achieved despite delivering on the increased CapEx guidance, which was communicated in the H1 results. The lease adjusted leverage at 0.5x to improve from 1x largely due to higher EBITDA. Similarly, our reported leverage at 1.8x improved from 2.3x. The result of the strong growth, strong macroeconomic backdrop and continued focus on our costs helped deliver a 128% increase in EPS before exceptional to 18.6%.

The Board has recommended a final dividend of $0.026 per share, which is up 9.2% versus last year, in line with our current dividend policy is combined with the interim dividend of [indiscernible] per share, makes a total of $7.01 dividend for the full year.

The next slide runs through the top line development. In the constant currency terms, the revenue growth of 24% was supported by the strong rent across all our business segments, we continue to see double-digit growth in voice revenue while data revenue, which is now the largest contributor to the group revenue increased by 35.2% as we have continued to see strong smartphone adoption across all our markets.

In our mobile money segment, the business remains supported by the continued focus on the expansion of our ecosystem with customer addition and ARPU driving growth of about 28% for the year.

In reported currency, the growth rates came in at the premium to the constant currency in mobile money as well, which reflects the currency appreciation we saw across our long markets during the year.

Now coming to the EBITDA margin side during the year. We have been relentlessly focused on our cost optimization program. We have actively taken steps to reduce our cost, which -- without impacting our strong growth trajectory. This program, alongside continued operational leverage and a more stable macroeconomic environment has helped us deliver very strong EBITDA margin of 49.3%, which peaked at 50.3% in quarter 4. Our margin increased by 280 basis points and [indiscernible] basis points, respectively.

Consolidated EBITDA came at $3.16 billion in absolute, an increase of 37.2% in reported currency and 30.4% in the constant currency. Our finance cost which reflects a key component of finance cost movement from the last year. There are 2 key takeaways that are worth noting in this slide. The first one is related to an increase in our lease interest. We saw [ $148 million ] increase over the last year as we continue to increase our site rollout. Furthermore, the full year impact over the contract renewal that took place in the prior year impacted lease interest by $86 million.

The second is our success in our ability to lower the cost of our debt. The average cost of our debt declined by 60 basis points to 12.1% for the full year. Importantly, as at the end of the March 2026, the average cost of our debt has declined to 10.6%, which reflects our ongoing focus on optimizing our portfolio of the debt while also benefiting from the lower interest rate environment.

With regard to the losses of ForEx in the prior period, we have $179 million of derivative and ForEx exchange losses. Whereas in the current year, we reported foreign exchange gains of $127 million given the currency appreciation in many of our markets.

Moving to the EPS slide. Our EPS before the exceptional item was up 128% to USD 0.186 in the current period as compared to $0.82 in the prior period. The increase in EPS clearly reflects the success we have talked about it over the year, with revenue and EBITDA trends remain very strong, which drove a very strong performance in our operating profit.

If we were to exclude the impact of ForEx devaluation in the prior period, and the gains in the current period. The EPS has increased from $0.098 to $0.162 again reflecting the strong underlying performance of our business.

For the normalized free cash flow, the business generated a free cash flow of $803 million in the current year as compared to $213 million in the prior period, which is an almost fourfold increase. This slide gives us a bridge between EBITDA and the normalized free cash flow for the current year. The biggest component of the cash flows below EBITDA relates to a cash CapEx of $875 million and interest payment of $816 million. We have discussed the increased interest costs earlier in the presentation. Our CapEx payments are largely in line with our balance sheet CapEx as we stepped up our investment over the year, which reflected our increased optimism around the business outlook.

OpEx came in line with our increased guidance, which we provided at the H1 results as we accelerate our ability to capitalize on the significant opportunity across our markets.

Now let me discuss our CapEx outlook for the next year. As you can see from the Slide #29, we increased CapEx in FY '26 to $884 million. There's a particular increase in CapEx intensity in the second half of the year. Given the opportunity and the initial success we have seen to date, we have provided CapEx guidance in FY '27 of $1.1 billion, reflecting our confidence in an underlying demand and our ability to create long-term value for our shareholders. Our investment will be focused on pre priority. The first one is on the coverage where we are increasing our site rollout and expanding into underserved rural markets. It is critical to drive deeper SIM penetration, extend 4G coverage across our footprint and advance our digital inclusion enter.

Second, enhancing our capacities on data. Our data demand continues to grow at a rapid pace. We have selected you rolling it out our 5G network, modernizing our network to unlock additional capacities and expanding our fiber to [indiscernible] transmission and improve network resilience.

Third are the new growth engines, where we are seeing a very big opportunity. We are seeing strong traction in our home broadband business. And so we'll begin scaling both wireless and the wireline, which will be supported by 5G to enhance our [ HPV ] proposition. In parallel, our data center investment will also accelerate during the next financial year as the construction across our key markets are gathering momentum.

Overall, these focused investments are designed to strengthen our market position, support disciplined growth and maximize long-term value creation while remain fully aligned with our strong cash flow generation and following our capital allocation framework.

I'll move to our capital structure slide. During the year, we have continued to focus on spending our balance sheet. Two extremely critical points to highlight from this slide are the first one is reducing our foreign currency debt exposure across our business. Holdco debt remains at 0 with 95% of our OpCo debt being in now local currency, an increase from 93% last year.

Secondly, leverage. The group leverage of 1.8x has improved from 2.3x compared to the prior period, primarily as a result of increase in EBITDA. Our lease adjusted leverage, our key financial metrics have also improved from 1x to 0.5x. This strong balance sheet position remain a key policy for our business and provide us the flexibility to increase our investment strategy, all within our capital allocation policy.

Our capital allocation policy remains aligned to our previous period -- our capital allocation policy remains aligned to the prior period. Our key priorities remain to continuously invest in the business, strengthening our balance sheet and return cash to our shareholders. Our first priority is to invest in the business and increased CapEx spend in 2026, and the CapEx guidance for 2027 reflects we remain focused on this [indiscernible].

The second pillar of our capital allocation policy is to ensure a sustainable capital structure with leverage having fallen to 0.5x and a low level of dollar debt in our balance sheet, I'm extremely pleased with the state of our current capital structure.

Finally, the third pillar is all about returning the cash to shareholders through our progressive data policy. This policy has been extremely consistent over the years and is again reflected in the Board decision to pay a final dividend of [indiscernible] per share, growing 9.2%, which remains at the top end of our dividend policy, which aims to grow the dividend by mid- to high single digits. Shareholder returns have also been complemented by the $100 million share buyback program, which was completed during the year.

In summary, our capital allocation priorities remain here, continue to invest to strengthen our competitive position, maintain a strong and resilient balance sheet and returning cash to our shareholders, all underpinned by the strong generation and the disciplined execution.

Let me now hand over the call to Sunil for his concluding remarks.

Thanks, Kamal. Finally, on Slide 33, we -- just a few words on summary and outlook. As you have seen from our results, our strategic focus has consistently driven positive momentum across the business and reflects our strong track record in execution. Our focus will remain on investing in our network and on further expanding our distribution to be closer to our customers, whilst at the same time, investing in new fast-growing areas.

Over the year, the macro backdrop has been supportive for our business. However, more recently, as you know, there has been increased geopolitical uncertainty, which has had a direct impact on our -- on energy costs, in particular diesel. Diesel is a key component of our cost base, given our exposure to unreliable grid infrastructure across a number of our markets. As a result -- as it stands currently, we will expect to see increased cost inflation from rising energy costs impacting our EBITDA margin in the near term. The outlook remains uncertain, but we will enhance our focus on cost efficiencies to try to limit the overall impact these higher costs will have on our business.

We are exposed to a region which offers a fantastic growth opportunity. We have shown a very strong track record of execution. And we have a capital structure that will allow us to continue execution of our strategy. This puts us in a very strong position to drive significant value for our shareholders, and we look forward to reporting on these successes in the future.

I know many of you will want to have an update on the [indiscernible] operating money given the geopolitical uncertainty, particularly in the Middle East, The current market conditions are not supported for an IP operating money in the first half of this year. We do, however, we made committed to undertake a listing of [indiscernible] money as market conditions allow, and our intention is to undertake the IPO in the second half of 2026. We have made very good progress on our preparations, and we continue to see this as an important strategic initiative for the group.

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

[Operator Instructions] The first question we have is from Ganesh Rao of Barclays.

Congratulations on the results. I have a couple of questions. My first question is on the Nigeria market. So in Nigeria market, the growth has slowed during the quarter as we had the pricing overlap. But looking ahead, how do you see the trends specifically for the growth rates? Do you see them moderating from the current level? Or are you seeing any strong underlying demand in the market so that can really support these high growth rates even in the current year? So any color on the Nigeria would be helpful.

My second question is on the -- your remark on -- related to the potential cost headwind. So could you quantify the impact that you expect -- in the current year on the margins if the energy prices remain elevated. So I'm just trying to understand like how big the energy cost is a percentage of your OpEx? And what are the mitigation measures that are already underway. So any color on this would be helpful.

Ganesh, thank you very much for your compliments and your questions. Let me just take the first question, and I'll hand over to Kamal for your question on the potential cost impact. Nigeria remains a very attractive market for us, offers a huge opportunity for potential and opportunity for growth going forward. What we have seen, as you rightly pointed out, in quarter 4 compared to quarter 3, there is a slight slowdown in growth rates because we are overlapping the price increases of last year.

But having said that, we remain very positive about our growth prospects in Nigeria because all the underlying metrics, if you see, there is still -- the underlying metrics are very strong. There is still a pretty significant headroom for growth -- customer acquisition growth in Nigeria. The penetration has still remain slow and there is an upside opportunity there.

There is also an opportunity to -- or upgrading customers from feature phone to smartphone, which drives significant growth. We've seen very strong data consumption. If you look at data consumption, but usage in Nigeria remains very, very strong. And that growth, we expect to continue. We also see other opportunities in Nigeria, especially with respect to home broadband, which is an emerging market. And Nigeria offers us a very large opportunity, and our initial -- when we have launched the service in Nigeria, the response from the customers has been very, very promising.

Enterprise remains a rather very large opportunity in Nigeria. And given over the last about 6 quarters or so, what we have done is we have developed very strong product solutions that we have to offer to our enterprise customers. And we have now -- we've made significant investments in building our go-to-market for reaching out enterprise customers across all segments. And on that's another area of growth.

The last opportunity that I will touch upon very briefly is also money. While the scale of that opportunity remains strong. It's very small today -- the opportunity is very large, our business remains small today. But we are seeing very, very meaningful progress in even on the money business, and we see that this while over a long period of time, may not be a big impact in the short term, but we are seeing continuous progress on increasing our customer base and customers engagement with our money business. And so from an opportunity point of view, we remain very optimistic and very positive [indiscernible] Nigeria.

Thank you. Coming to the question on the margins, the fuel price remain volatile given the geopolitical impact in the Middle Eastern side. It all depends on where all the fuel price will get settled. But the sensitivities, which I need to give you a number at a weighted average level, if the fuel price moves up by 10% across Africa, the impact on our P&L is roughly $35 million to $40 million at the current consumption of the diesel.

We have already seen a significant movement in terms of the diesel price moving upward in Nigeria, more than 100% in the last 60 to 90 days. All other markets, we are seeing the fuel price moving up somewhere between 20% to 40%. Given the fuel prices, where they are today, if you were to simply assume the fuel price will remain at this level throughout the next year, on the quarter 4 revenue, the impact is roughly 2.5% to 3% on our EBITDA margin, though a part of this will get mitigated through our ongoing cost efficiency program. As you have seen our cost efficiency program and the scale benefit, what sort of EBITDA margin they have given us in the last year. Now what sort of compensation will be able to get it through our ongoing cost efficiency program and scale, very difficult to quantify at this stage, but this is where we are as we speak. Thank you.

The next question we have is from Rohit Modi of Citi.

Congratulations on results again, and I have a couple, please. Firstly on the home broadband opportunities, as you mentioned and also allocating a bit more capital there. If you can guide us, are there specific markets you are seeing this opportunity to be more broadly, more lucrative and where you want to invest more? And what kind of CapEx allocation you can have going forward into this area. Also, what -- how much -- if you can give us a bit of a split into $1.1 billion guidance for next year, how much goes to the home broadband opportunity in this.

Second question is on the margin development and particularly in Nigeria. And I believe the part of margin upliftment this quarter was also coming from the VAT, which you have mentioned in the last quarter. I'm just trying to understand if you remove that, possibly margins is kind of similar to what you had last quarter. So is that kind of sustainable margins that you see in Nigeria, excluding any kind of fuel price impact going forward? Obviously, there could be a chance of further development, further improvement in Nigeria margins?

And lastly, the question is basically on your capital allocation. And given our leverage is moving [indiscernible] tax leases. I'm just trying to understand at what point of time you might want to go back, at what leverage levels you might want to go back and look at your dividend and shareholder return policy or any kind of events where you probably let's kind of putting you not going back and really looking at your dividend policy at this point of time.

Yes. Home broadband segment is a very attractive opportunity across our footprint. So the way we see it is there is a total of about 30 million households, which can afford today a home broadband connection. And the overall, if you look at the ARPU, is highly accretive. And that provides us a very, very strong revenue opportunity. The category penetration right now is only 2%. And therefore, this is a very attractive opportunity. And this opportunity we are seeing across all of our 14 markets that we operate in. Having said that, there is a massive SKU at this point in time towards the urban centers and especially in the top cities across our 14 markets. So that's where our focus is.

On your question on capital and allocation, how much capital are we allocating to home broadband. We will not be able to give you guidance on capital allocation or the amount that they're allocating, but primarily, the capital or the CapEx investment is going towards building our network for home broadband category to support the demand for home broadband. Second is home pass deployment, which is something that we're doing across our markets. And finally, on building GTM capabilities, go-to-market capabilities, so that we can acquire our customers, onboard our customers and most importantly, deliver great experience to our customers. So that's where our investments are going. On your Nigeria margin, I will hand over to Kamal to talk about the capital allocation.

Thank you, Sunil. So on the margin of Nigeria, if you were to assume that there would not be any impact on the ongoing fuel prices in the world, Nigeria would be able to hold margin at the current level very comfortably. So we don't see any risk except for the fuel price in the Nigerian economy and our ability to maintain the margin.

Now coming back to the leverage point on our capital allocation policy. Our capital allocation policy has been extremely consistent over the last few years. Wherein, as I said it, our first priority is always to invest back into the business for growth. And in line with that, we have enhanced our guidance last year as well and in the current year, which is '27 also, we have improved guidance to $1.1 billion.

Balance sheet. As I said, we are comfortable at [indiscernible] and on our decision to change our dividend policy and are returning cash to shareholders, we will come back to you and when the Board will approval and change the dividend policy. But for the time being, we are sticking to our existing progressive dividend policy, which is an increase of mid- to high teen in green every year.

The next question we have is from Mollie Witcombe of Goldman Sachs.

I have 2, please. You talked about the potential macro impact on margins. But I'd just like to dig in a little bit into potential impact on CapEx. Could there potentially be an impact on the required CapEx to hit your network expansion goals if the situation persists? And are you seeing any difficulties in equipment acquisition and project costs?

And then certainly just on mobile hardware supply difficulties, I've heard there's been a large decline in mobile hardware shipped. And I'm just wondering, are you concerned that this could pose a headwind to smartphone penetration and growth across your markets?

Thank you very much for those questions. So on your first question, the macro impact on our CapEx investments. See despite the geopolitical developments that have happened recent past, we remain very, very confident of the opportunity that we see in Africa across our markets, especially as we stepped up our CapEx investments in the last year, which is FY '26, our original guidance to about $884 million is finally where we ended up. We've seen a very good response to our -- to the investments, and we have seen a lot of -- we're seeing a lot of momentum in the business at this point in time. And we remain positive that this momentum will continue because currently, we have not seen any let up on the demand side from -- for all our services. Because if you look at the data consumption per user continues to grow at about 27%, 28%. We are also seeing very high usage of -- increasing usage of our mobile money transactions per customer.

So demand remains strong, and we will continue to invest in expanding coverage and also adding capacities, and we spoke about the 2 additional opportunities. At this point in time, we remain very, very confident of the opportunities that Africa has to offer, and we will continue to invest behind these opportunities given the momentum that we have, which is also reflected in a very strong customer base that we've seen in Africa, which means there are more customers who are coming into the category and using more of our services.

On your additional question on any impact of this -- the geopolitical development on supply chain. Currently, we have not seen any impact of any -- of supply chain on the availability of our equipments -- or our requirements. Having said that, if this conflict continues over a longer period of time, it is very difficult to say, but right now, we are not seeing any disruption whatsoever. On the mobile hardware, in Africa, we don't get industry data. But so far, all our engagements, what we've seen is there is a price increase that have happened. Supply chain disruptions are not causing the availability at this point in time.

Africa is also a very large market, which operates on hand me downs. And therefore, the secondhand phones also fuel a lot of upgrades that we see. So we are currently not seeing any stoppage in the -- a slowdown in our upgrades. But over a period of time, and this is probably not only caused by geopolitical disturbances, it is also caused by overall price increase that has happened in the market because of chipset prices have gone up. So it's very difficult to ascertain at this point in time to say what is causing this price increase in mobile hardware or mobile handset prices to go up. But in Africa, currently, we are not seeing any slowdown in upgrades. We'll see numbers in quarter 4. So we remain very optimistic.

The next question we have is from John Karidis of Deutsche Bank.

I've got 2 questions, please. One has to do with Enterprise Services. Given that Airtel Africa operates mainly mobile networks in Africa, what are the enterprise services that you can offer? And what are the services that you cannot offer?

And then secondly, on group capital expenditure, I would like to understand whether there's going to be a disproportionate increase in CapEx for new businesses versus coverage and capacity. So on a best case scenario, it would be nice to get what -- to understand what the mix between the 2 was in the year to March '26 and how that's likely to change in the year to March '27.

Thank you very much for your questions. On your question on enterprise service. So right now, a bulk of our business from enterprise needs to come from our connectivity business, which is mobile services. In the recent past, what we have done over the last 1.5 years, 2 years, we've built significant capabilities and product solutions, working closely with our business in India to develop other product solutions for our enterprise customers across segments, whether it is enterprise, government, banks or SMEs.

So right now, the solutions that we offer to our customers are fixed data, network as a service, communication plan, CPaaS, IoT, security. And as we roll out our data centers across the 3 markets, that's the other service that we will start to offer to our enterprise customers. So therefore, what we have right now is a full suite of services that we can offer to our customers so that they can manage their -- and grow their business more effectively. So that's the -- on the enterprise side.

On the capital expenditure, increase in CapEx, while our total CapEx is guidance, as Kamal spoke about, is $1.1 billion for FY '27. And as he said, there are broadly 3 areas. So one is coverage expansion [indiscernible] capacity. And third is in the area of our new businesses, which is home broadband and enterprise, and enterprise also includes data [indiscernible], but we will not be able to, at this point in time, we view a split, which is what I guess you're expecting because how much are we investing across the other segments.

But we can definitely tell you that on coverage and capacity, we are not slowing down on either covering us footprints or adding the capacity. I think on an absolute basis, the spend on coverage capacity, you can see if you assume would be higher than what we have spent in FY '26.

The next question we have is from Tracy Kivunyu of SBG Securities.

Congratulations to you for a great set of numbers. Two questions from me. First, in Uganda, if you could just talk about the dilatory environment there with relation to geographical coverage targets and trade reforms that seem to have changed how agents can position themselves in market. So have you seen any impact on your fourth quarter performance on that in East Africa? And how do you expect mobile money revenue to perform in the market inside of that? And maybe when you're talking to geographical coverage targets, is part of the CapEx improvement we are seeing this year also directed to achieving those geographical coverage target requirements?

And then second question is on Nigeria, and it's related to airtime credit lending. If you could just give us some detail on how much of Airtel Africa service revenue in Nigeria is attributed to consumption of asset and credit lending facilities and how you're seeing usage going into the second quarter now that you've suspended the services. And if maybe there is a chance for you to sort of reinstate the services within the quarter? Or you think this is going to be a sort of a long-term issue?

Thank you very much for your questions. Let me address your question on Uganda first. The first question -- the first part of that question is with respect to our coverage obligation in Uganda. So we are currently not meeting our coverage obligation. Having said that, we are engaging with the regulator and the authorities. And we've shared our plan of our capital investments and our coverage expansion in Uganda and authorities are very satisfied at this point in time. We've submitted our proposal to them, and we are engaging with them and we look forward to working very closely with the authorities and to fulfill and meet our coverage obligation in Uganda.

So from that point of view, at this point in time, the engagement is very strong. We have plan in place. And in due course of time, which is something that we would align to meet our obligations.

Mobile money business continues to perform very, very effectively in Uganda. We don't share numbers at operating market level. So I'll not be able to share numbers for Uganda specifically, but our business continues to perform normally without any disruptions.

Your question on Uganda -- sorry, Nigeria [indiscernible] credit lending. I'll not be able to share numbers on what percentage of our revenue passes through the airtime credit, but the question that you asked about disruption, as per the FCC PC guideline, we had to disengage with the -- with one vendor, which is something that the entire industry did, and we followed the directions issued by the authorities. At this point in time, we are actively engaged with other authorized vendors of credit lending in Nigeria. And we are in the process of integration, and this should not have any disruption to our business in Nigeria and we will be back in -- back on track, offering lending services within the next few weeks to our customers in the area.

The next question we have is from Maddy Singh of HSBC.

Congrats on very strong set of results. I have a few and so please bear with me. The first question is on Uganda. If you could share there was any impact on your performance because of the Internet shutdown around elections. And did your mobile money business also see any impact? So that's the first one.

Then the second one is, there was no comment on continuation of share buyback. So has that concluded? Or is that something which can still happen, if you could give any comments there.

Then the third is a clarification on your comment. I think I heard you said mid- to high teens growth in dividend. But I think the policy is mid- to high single-digit growth in dividends. So can you please clarify? And the final one is on probably a technical one, but post to the mobile money IPO, is there any changes in revenue or other financial consolidation related to that, which will happen, I mean I understand the sales part, but I'm not talking about that, that any potential revenue impact because of consolidation changes?

Thank you very much for your questions and your compliments. Let me answer the Uganda question first. So we had -- there was a suspension of our services or banners on services for a short period of time, which did have an impact on our revenue across both GSM as well as mobile money in Uganda.

And on your other question, which is on the share buyback, I'll just hand over to Kamal and we will very quickly talk about and offer you clarification that you start on the dividend policy.

I think I'll address the dividend. You're right. Actually, this is single digit. I think if you would have said it mid- to high single team, probably that would have been [indiscernible]. Thanks for clarifying and correcting me.

On the buyback, as of now, we have concluded the last allowance buyback of $100 million. At this stage, the fold has not given a go ahead or approved any further buyback. But nonetheless, we will keep you posted on -- in case the Board approval, another tranche of buyback.

On the entire group agreements on an impact on revenue, so all these agreements are bases mark-to-market and what has been going in the market dynamics. In the market dynamics are changing in our [indiscernible] where the transaction needs to reassess what is on length, which is not the case at this stage because at this stage, all our agreements are at [indiscernible] then definitely, we will see a change because all our group [indiscernible].

So cannot say that like this will remain at this level or change that? It all depends on what's happening in the market. If tomorrow, like there is other transaction which has been going at a lower or higher rate, the rate will change accordingly what has been going in the market. I hope this is answering your question.

And just...

At this time, ladies and gentlemen, I will hand over to Alastair for any webcast questions submitted.

Thank you. Yes. So a couple of questions that come through on the website just to address, -- firstly is just on the Francophone markets. Very strong performance there in the Francophone, I think, record net adds. So could you discuss what's going on there? What's the outlook for that? Is that momentum sustainable?

Second question is on the home broadband. Obviously, a great opportunity. But how do you see the competitive threat arising from Starlink in terms of pricing coverage, service quality, et cetera. And then a quick question on the put option. Has the put option been extended beyond August 2026?

[indiscernible] Francophone question first. Francophone office, a very, very large opportunity for us to grow. It still remains -- it's a high ARPU market with very low penetration. Smartphone penetration significantly very large opportunity. It's a very large opportunity for us for data consumption. The other opportunities that we have, which is something that I spoke about in home broadband and enterprise, given the high ARPU on the data side, home broadband actually is an even more attractive opportunity in Francophone markets. And given this opportunity, the results that we have seen in the Francophone market is a function of first risk or increased investments. We have made significant investments in expanding our coverage, making our network more resilient, and that seems to be helping us to deliver better customer experience, which has repeated in a very strong customer base growth in Francophone market.

Our teams have done a fabulous job in executing and [indiscernible] focused on executing our strategy. So we remain very, very positive of our growth momentum -- sustaining growth momentum in Francophone markets.

The second question was on home broadband. On the home broadband side, as I said, it's a very large opportunity, 30 million potential home broadband customers and 2% penetration. So this market, from a competition point of view, the question was with respect to Starlink. Starting right now, we see Starlink as a complementary service. Wherever our networks have not been, we will definitely go and we ourselves are offering Starlink connectivity to our enterprise customers, especially the SME customers. And that itself has seen a very strong -- a very good positive response from the customers.

So any competition at this point in time will only allow us to expand the market and grow the market and develop the market. That's the way we see it. There is a very large land grab opportunity across all our markets. So -- and our experiences as we continue to -- we have an advantage to service pricing. And over a period of time, as we expand our [indiscernible], nothing to replace fiber, especially as the consumption goes up, and which is something that we are seeing across all of our markets, the consumption at home, outside home, work, and for play and for money [indiscernible] cases is significantly increasing.

So Starlink is a complementary service, a large opportunity, and we have structural advantages for us to grow the market. And we remain -- it's a large land drive opportunity. So we remain very, very positive about our opportunity on the home broadband side for both domestic as well as small and medium enterprise that there's an incremental opportunity that we see.

The last point was on the put option liability. So on put option, we are well prepared for the IPO. We are having a very constructive and transparent engagement with our minorities who are also our strategic investors. We have not received any formal return extension from my minority, but they are fully supportive, and they are absolutely involved and engaged in all our IPO discussion. So there's a shared understanding on how well the business is doing. You have seen the business we've been doing -- continues to do extremely well. Our PAT has [indiscernible] improved from $280 million to $350-odd million. And we all are aligned on the IPO time lines. But on a formal basis, we are yet to receive a formal extension of the adoption liabilities.

And two more questions, just 1 on East Africa, competitive intensity. How you see that playing out? How has the development been over the last quarter and looking forward? And then a quick question in terms of the listing given the situation in the Middle East, would you consider London as one of the venues you invested?

Okay. So on East Africa, East Africa is our largest market. And so we have a very strong presence across all our markets with both GSM as well as the money business. Last quarter, we spoke about the competition intensity and where the competition intensity remains high in East Africa. Having said that, if you look at some of our underlying metrics are very, very strong. If you look at our data consumption per customer is amongst the strongest. Our data customer growth in East Africa is also at [indiscernible] 15.7% if we have to be precise. Overall, we saw about a 15.8% growth in quarter 4. And part of that was also impacted by [indiscernible] because of election in one of our key markets. If we normalize for that, quarter 3 and quarter 4 will look very similar to each other.

But we have a great set of -- we have very strong network in East Africa with strong brand presence. We have strong deals and a very, very stable system in East Africa to accelerate growth, and we remain very positive about prospects in East Africa.

On your second question on the listing venue. As we've previously communicated, we continue to evaluate all major listing options. And we are close to finalizing our preferred location and will provide further updates to market with respect to the selected venue and the advisers [indiscernible].

We hand back to the operator.

We have a question from [indiscernible] Coronation Securities Limited.

Perhaps I can hand over to Sunil for closing remarks.

Thank you for joining the call today and for your questions, and we look forward to our continued engagement with you all. Thank you. Thank you once again.

Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa 9 Months 2026 Results. [Operator Instructions] Please note that this event is being recorded.

I would now like to hand the conference over to Sunil Taldar. Please go ahead, sir.

Thank you very much. A very good morning, good evening to all of you, and thank you for joining on today's call. I'm joined on the line by Kamal Dua, our CFO; and Alastair Jones, our Head of Investor Relations. We will shortly be answering your questions. But first, I would like to provide you with a brief overview of the recent performance at Airtel Africa.

I think these results speak for themselves. We have continued to produce a strong operating and financial performance with reported currency revenue growth of 28.3% and almost 36% growth in EBITDA over the last year. Constant currency revenues and EBITDA, a reflection of the underlying performance saw encouraging growth of 24.6% and 31%, respectively. The outstanding feature of this performance, in my view, is the continuing scale of opportunity across the business. We operate across African continent with a combined population in excess of 650 million people, where the -- whereas the penetration of both telecom and financial services remains low. We have a broad portfolio of services that are in high demand, spanning data, home broadband, enterprise solutions, mobile money and merchant payments to name a few. As digital adoption and financial inclusion continues to rise, this positions us to sustain strong growth rates over the coming years.

Our refined strategy is working to capture this opportunity as we attract customers and build loyalty in order to sustain this industry-leading growth. These results underscore the substantial work we have been undertaking over the last few years to embed this customer-centric strategy across the group. The result has been increased adoption of our digital services, which allows customers to access them with ease, alongside the launch of transformative offerings such as the AI spam alert, which protects our customers from fraud, and the recent partnership with Starlink, which will enhance connectivity to our customers across the footprint. These are strong examples of innovation -- innovative initiatives that differentiate us from competition and solidifies our position of being able to capture the significant opportunities across our markets.

To deliver an outstanding customer experience, we have accelerated investment to increase capacity and coverage across our footprint. We've increased our sites by approximately 2,500 and expanded our fiber network to over 81,500 kilometers, as we focus on enhanced coverage and data capacity to further improve the customer experience. This investment remains the cornerstone of our ambition to capture a larger share of the opportunity on offer across the continent and is reflected in the strong operating and financial results we have reported this morning. In summary, our primary focus remains delivering an exceptional customer experience essential for creating value for all our stakeholders.

Our revenues reached -- let me now briefly run through the financial performance in quarter 3 specifically. Our revenues reached $1.69 billion, which was 24.7% growth in constant currency, an acceleration from 24.2% in the previous quarter. Given the recent foreign exchange developments, this translated into a growth of almost 33% in reported currency. On a regional basis, a key highlight was the performance in Francophone Africa, which saw its constant currency growth accelerate from 15.8% in quarter 2 to 18.7% in quarter 3, as our investments and strategic focus has helped drive a strong recovery over the last few years. In Nigeria, strong demand and tariff adjustments contributed to a further acceleration in growth to 53% in constant currency. While in East Africa, constant currency growth of 16.1% remains robust despite evolving market dynamics over the quarter.

Moving on to our two primary business segments. Our Mobile Services business continued to see strong trends with operating momentum and customer growth, usage and ARPU driving revenues 23.6% higher in constant currency. Customers of 179.4 million grew by double digit with data customers rising almost 15% to 81.8 million. Smartphone penetration increased almost 4 percentage points, reaching to 48.1%, but this also reflects the scale of the potential for further smartphone opportunity and takeup in our footprint. Data traffic increased by almost 47% as data usage per customer reached 9.3 GB per month in quarter 3, up 25.6% from the previous year and an 8% increase from quarter 2 levels. It is clear that underlying fundamentals, combined with our strong execution are enabling the sustained level of demand.

In addition, data ARPU remains supported by these operational trends with a 16.2% increase in quarter 3, leading to a data revenue growth of 35.5% in constant currency terms. With data revenues now being the biggest component of revenues, the performance in this segment is key to sustaining a strong overall group revenue performance.

Now on to another very significant growth engine for us, the mobile money business. Airtel Money crossed two thresholds in the last quarter. Firstly, it exceeded the 50 million customer mark with 52 million customers at the end of quarter 3. The second milestone was seeing the annualized total process value, or TPV, exceed $200 billion, reaching over $210 billion, a growth of 36%. Both these achievements reflect not only the significant market opportunity, but also the structural competitive advantage and scalable platform, which has driven increased customer engagement as ecosystem continues to expand.

With only 52 of our almost 180 million GSM customers using the service, the ability to sustain this strong customer growth momentum remains intact. This, combined with continued uptake of new services and increased engagement on the platform, highlights a very compelling growth narrative. In the quarter, revenue growth of 28% in constant currency and EBITDA margins of over 50% reflect best-in-class financials, where growth, profitability and strong cash conversion enables the continued scaling of this very attractive business.

The strong growth across all businesses has also benefited the profitability of the group, with EBITDA margin continuing to expand to 49.6% in quarter 3, up from 49% in quarter 2 as cost efficiencies, a more stable macro backdrop and operating leverage continues to benefit. Notable mentions are Nigeria, where margins increased to 57.8% and a further increase in Francophone margins to 44.3% on the back of strong operating results. At a group level, this has driven a very pleasing 31% increase in constant currency EBITDA, which when combined with currency tailwinds has resulted in a 40.8% increase in reported currency EBITDA.

Within finance costs, aside from the more stable FX environment, the group's effective interest rate has declined by 200 basis points. We have seen the interest rate cycle turning more supportive with policy rates moving lower and the increased free cash flow generation, enabling us to pay off higher rate debt. Leverage remains very comfortable with these adjusted leverage declining to 0.7x, down from 1.1x in the prior year. Adjusting the extraordinary items in the previous year and all foreign FX gains or losses, we have seen the underlying EPS increase from $0.074 in the prior period to $0.116 in the current 9-month period, an increase of 57%. Basic EPS has increased to $0.131 from $0.044 in the prior year.

Underpinning this performance has been our CapEx investments. As we communicated at the H1 results, we've announced CapEx guidance of between USD 875 million to USD 900 million for this financial year. This is a significant step-up from the previous year, reflecting continued confidence in the outlook for the growth and scale of the opportunities available for us to capture. In this 9-month period, CapEx increased over 30% to $603 million, and we are on track to deliver according to our guidance. As I highlighted earlier, the prospects for multiyear growth remains very apparent, and this accelerated investments will provide the platform necessary to capture a higher share of this growth, while also enabling us to unlock additional growth opportunities in areas such as data centers, but also the home broadband space where we have seen strong momentum.

Before I hand it over to the Q&A, just summarize a few key points. Firstly, there were strong results with constant currency revenue and EBITDA growing by almost 25% and 31%, respectively, in quarter 3, translating to a 33% and 41% reported currency revenue and EBITDA growth. Operating momentum remains intact with strong customer base growth and usage growth across our telecom business. Airtel Money continues to scale with strong results, reflecting the truly unique business opportunity. And we are seeing strong progress in the preparations for the IPO, which remains on track for the first half of 2026. We have accelerated our investments to capture the significant growth opportunity that is available to us, and we believe this will put us in a much stronger position to showcase our ability to capture the structural growth potential.

We're excited by the future, and we see a unique opportunity to sustain strong levels of growth going forward through a laser-like focus and strategy of putting the customer at the heart and center of everything we do. We look forward to reporting our successes in the future and continuing to generate value for our shareholders.

And with that, I would now like to open the line for questions for which I'm joined by Kamal. Operator, I'll now hand over to you to facilitate the Q&A.

[Operator Instructions] The first question that we have today is from Rohit Modi of Citi.

Congratulations on the results. I have three, please. Firstly, on EA, as you mentioned higher competitive intensity in some of the markets. Can you give more color on which of the markets where you're seeing this higher competitive intensity and how you think that's going to -- how we should model our numbers for future quarters? Do you think that this is more short term that you're seeing or a bit more long-term impact from this?

Second is on Nigeria. You'll be lapping the price increases this quarter. Just trying to understand how you see the growth in Nigeria beyond this quarter. I mean I think fully you'll be lapping in the next quarter, particularly and can you give us more color on that? And third question is, if you can please remind us in terms of your leverage targets, given leverage has come down to 1.9x, at what leverage do you really look at the capital allocation policy?

Thanks, Rohit, for your compliments and the question. Let me just take the first question first on East Africa. See, if you look at East Africa, it is our largest market segment, and this is one market where we've been consistently performing over the last few years and many quarters. It's a very, very robust business that we manage in East Africa. First, let me talk about the underlying metrics of the business so that we are clear that there is no structural underlying issues in East Africa.

Let me start with our base growth. If you look at our base growth, it is about -- the business is growing at about 9.5% in terms of our customer base growth. Smartphone growth, which is another very important metric that we look at, is growing at about 19% or so. So in terms of our underlying metrics performance, the business remains very, very stable and strong. The opportunity in East Africa remains very, very compelling. It's a very strong business for both money as well as for GSM for us. And as I said, we have over the quarters and years, demonstrated our ability to execute very, very beautifully and delivered strong results.

In the last few quarters, there is one thing that we've experienced is a significantly higher competitive intensity. And if you remember, this was the same story on Franco Africa about 6 or 7 quarters ago where we had said that Franco, there is a significantly higher competitive intensity and -- but our underlying metrics, which is customer base growth, smartphone penetration, et cetera, et cetera, were all looking all right. So there is -- because of this competitive intensity in few markets, we've seen a temporary challenge, but we've rolled out action. And I'm fairly confident because of our very strong team and their ability to execute plus the capability that we've added that we will be able to accelerate growth in East Africa as well.

There is just one more thing that I would like to highlight. In the last 1 quarter, in the quarter 3, there were certain regulatory challenges that the business faced, which are very temporary in nature because of which there were certain -- the Internet outages were called out for certain security issues, which is not only specifically to us, but for the market, which temporarily impacted the growth of the business. And hopefully, because this is now behind us, that was a temporary issue. We are fairly confident of our prospects in East Africa. We don't give guidance with respect to our future quarters. So I'll not be able to give you guidance, but I want to offer confidence that we remain confident about the opportunity that East Africa offers, our ability to execute brilliantly and that is demonstrated capacity that we've shown over the past few quarters and years, and the actions that we've rolled out should start to see results in the coming quarters.

Moving to your second question on Nigeria pricing. Nigeria, first, let me just give you a context as to how this price adjustment has benefited the entire industry. This price adjustment was very, very badly needed by the industry. What this has done is it has provided a lot of stability in the industry. And industry has responded very, very positively because our investments in Nigeria have gone up -- overall at the industry level has gone up significantly. What that is doing, it is actually -- is fueling demand in Nigeria. If I look at it from a customer point of view, the price adjustment has been very well accepted by customers because while we see some titrating when it comes to voice consumption, but from a data point of view -- but from a data point of view, we've seen very, very strong acceleration in data consumption numbers. So our base growth has improved, which means there are more customers are coming into the industry. The consumption has gone up, which is obviously a great news, which basically goes to see that the customer has accepted the price adjustment very positive.

We've made a lot of investment in improving the quality of service as an industry, and Airtel has done a lot of work in improving the quality of service. We have implemented a lot of digital capabilities so that we continue to accelerate our growth in the coming quarters as well.

Coming to your question specifically on pricing, we -- about 40% to 50% of last year growth came from tariff. And we see that -- as you said, we will be overlapping this tariff period. With the growth completely slowed down, we have -- given the current momentum in the business and the investments that we've made, we remain very confident about our growth prospects in Nigeria. The real results will be visible to us in the next 3 to 4 months from now as we start to report the quarter 1 performance, which should be a full overlap of the pricing numbers in Nigeria.

And as far as your third question is concerned regarding the leverage target for the company, I think we are fairly comfortably placed at 1.9x of leverage. Our lease-adjusted leverage has been coming down gradually and is standing at 0.7x. So financially, I think we've been pretty comfortable. We per se do not have any target in my mind -- our mind to say that like we have taken a target. But nonetheless, I think from a balance sheet point of view, I think we are in a good shape and in a great health.

The next question we have is from Tracy Kivunyu of SBG Securities.

Congratulations to Airtel Africa for the results. A few questions from me. The first question on Francophone region. Again, congratulations, very strong acceleration this year. I just want to understand which are the key regions in Francophone that drove that for data? And if you could give us an update on how -- if you could give us an update on how mobile money is growing, particularly in countries like Guernsey, which is one of your largest there. What sort of levers are you unlocking? Is it your basic remittances? Or are you seeing it across the business?

My second question on Francophone is on voice. I can still see it in declining territory, albeit at a lower base. So do you think we've lapped the effects of voice declines and will be returning to growth in fourth quarter? The next question is on Nigeria, which is the last question is on Nigeria. So on VAT lease reforms that would allow Nigerian companies to claim input VAT, have you done any sort of analysis that you could share on the impact of that on your future EBITDA margin and CapEx estimates for Nigeria? And lastly, on Nigeria, what is your 4G population coverage at the moment?

Thank you very much for your compliments and your questions. Let me first address your question on Francophone Africa. If you look at Francophone markets, Francophone markets offer massive opportunity for growth and both in terms of the -- for GSM as well as for the mobile money. There is a massive opportunity for growth for category penetration as well as upgrade opportunity for moving our customers from 2G to 4G. And what we have done is given this opportunity, we've stepped up our investments in Francophone Africa. So that's one thing which is driving growth in Francophone Africa. We've stayed very, very true to our strategy. Our strategy is very focused, which is focused on making sure that we deliver great experience to our customers. And we've made massive amount of investments both in our network, which is on the radio side and also on the transmission side to ensure that we provide seamless experience to our customers.

Our teams have done a fabulous job on staying true to our strategy, and that's what is driving growth across markets. What we have done is -- and there's a significant investment, as you pointed out, that voice is actually the -- across all the regions, Francophone markets have the lowest voice usage per customer. And therefore, what we've been -- and we have seen this usage also decline because the voice ARPUs in these markets are high. And what we see is customer moving to OTT. And therefore -- and that leads to also very high data consumption, the data ARPUs are also very high.

What we've also done is we have significantly expanded our 4G coverage in our 4G sites in Francophone markets. And today, 90% of our sites are 4G sites. And this number used to be about 85%, 86% about a year ago. And this is resulting into a very strong smartphone customer growth of about 25%, and that is driving our data revenue growth of about 34%, and that demand we see continue to increase. This is a customer behavior. And right now, what we are doing is we are making sure that we continue to provide seamless experience to our customers.

You were asking about some color with respect to market. We don't provide market level information, but I've just painted the picture for the overall Francophone Africa. And we remain very, very positive about our prospects in this market, and we see a massive opportunity for both GSM as well as mobile money for the Francophone Africa. Do you want to talk about the Nigeria, Kamal?

Yes. So Nigeria, as you're rightly saying, the Nigeria VAT is claimable effective 1st of January. And our estimate is roughly that will give us a margin increase of 1.5% in Nigeria starting from quarter 4 of this financial year.

So one other question on population coverage, yes.

So you had asked another question on Airtel Money, the Airtel Money growth and why have we divided this into various segments that we've offered. I think that was your question. So what we've done is we have divided our Airtel Money total revenue into wallet services and financial services and merchant services. Now what we have done is in the past, the business was primarily focused on driving cash in, cash out and peer-to-peer revenue. And as the business has achieved scale and we're seeing very strong traction in our business, what we -- while this is our strength, which is driving our -- leveraging our go-to-market and accelerating customer base, which has been driving business for us.

What we now want to do is we want to make sure that our payment and transfer business and financial services business starts to trade with a higher focus. And this is being led through our efforts, which is digital efforts, which is driving app penetration and making sure that we drive engagement on the app and drive multiple use cases, and that's driving and accelerating the growth for our Airtel Money business. Very quickly on the other question that you asked on Nigeria. Nigeria covered -- sorry, 4G pop covered is about 82% for us.

[Operator Instructions] The next question we have comes from Mollie Witcombe of Goldman Sachs.

I just have one actually. It's about the Starlink Direct-to-Cell partnership that you announced recently. I was wondering if you could give us some color, perhaps time line to launch, the potential upside that you see from this and just whether it's customer demand driven or fitting a business need, that would be great.

So if I heard you correctly, there was a slight disturbance in the audio. Your question is on Starlink?

Yes, that's correct.

All right. So I'll just give you a little bit of a context on what we -- the agreement that we signed with Starlink. This is the second agreement that we announced with Starlink. The first was -- the first agreement that we announced, I think, 2 quarters ago was with respect to offering enterprise connectivity solutions to our customers across our 14 markets and also for backhauling. The recent, which is agreement that we signed on 16th of December that we announced, what it covers is offering Direct-to-Cell services to our customers across the 14 operating markets that we have in our footprint.

I'll tell you how it works. The way it works is we'll be offering through the Gen 1 as SpaceX refers to it as Gen 1, which is SMS and light data services. Using these services, all our customers, Airtel customers across our 14 markets, once we launch this service, subject to approvals from our regulators, using their existing 4G and 5G phones will be able to remain connected anywhere across these 14 markets. In their respective markets, each time when a customer goes out of our terrestrial coverage, the customers will fall on to the satellite coverage and which is offered through Starlink.

The face of the service remains Airtel. So as long as the customer has an active Airtel SIM, the customer will be connected even if the customer goes out of our terrestrial coverage using their existing 4G or 5G devices. So that's how the service works. What it does is, as I said, because we are the face of the service for the customers, we control end-to-end experience for the customers and also for the security, the entire system moves through our operating systems. What we are doing right now is we are in the process of -- because we announced this partnership on 16th of December, we are in the process of seeking regulatory approvals across all our markets, and we are fairly confident that very soon we'll be able to also tell you where we are launching the service.

We are the first operator to offer this service to our customers in our -- in the 14 markets that we operate. And so there's a little bit of time that it is taking us to seek this approval. Both us and the SpaceX teams are working with the regulators to ensure that we get these approvals in time. It's a great service for a continent like Africa where still there is a huge coverage gap. And therefore, what we will do by offering this service, one is pitch the digital divide by -- and make sure that we are driving digital and financial inclusion by offering this service. And as I said, as we are the first operator to offer, at this point in time, if you look wherever we launch this service, it also gives us some amount of competitive advantage to deliver best experience to our customers and showcase that this is -- this service, we believe, is very, very complementary in nature when we start offering this service across our footprint.

That's very clear. Can I just follow up? Since if you're going to launch this Direct-to-Cell product, does this mean that you will scale back your coverage ambitions longer term in some markets?

See, it doesn't compromise -- the way we are looking at it is this is a complementary service, and we don't see this as replacing. So wherever as we -- so till the time we expand our terrestrial network, this service is a complementary service in any area where we don't have -- there is no telecom coverage, this service ensures that our customer remains connected with the network. And this ties in actually very beautifully with our core strategy of making sure that we provide the best experience to our customers, and that has been the driving force behind us signing this agreement with SpaceX. It is not to either save our capital investments to say that we will offer this service because customer will need an Airtel SIM, an active Airtel SIM to be able to access this service.

So we would like to -- our primary this thing is -- and this service is actually a great benefit for the customers, especially in far of rural areas. In the metro areas or the urban areas, the customer will remain on our terrestrial network unless there is any disturbance on the network, that's when the customer falls on to the satellite network. So customers will not lose connectivity has been the underlying and the driving force behind us signing this agreement with Starlink.

The next question we have comes from David Lopes of New Street Research.

Congrats on the results. A couple of questions, please. The first one is on margins. I know you don't give guidance on margin, but I was wondering if you can talk how much confident are you for next year for margin improvement? And could you comment on the cost structure? I think with the macro improving and also the Dangote Refinery being at full capacity, how is that going to play on your margins? And the second question is on the network sharing with Vodacom and the one with MTN. Could you comment on maybe the time line when are we going to see a benefit from these agreements?

Thanks, David. Let me take your first question on the margins first. See, what we have seen is about 240 basis points improvement on constant currency over last year. And this entire improvement has happened primarily because of, I would say, so three areas because of three things. First is there is a very stable and improving macroeconomic environment where we are seeing currencies have remained stable, inflation is coming down, growth is improving. And overall, the fuel prices have remained stable. So that's been the one area.

The second is we've also seen acceleration in our revenue growth that is also helping us to improve margins. And finally, there's a very, very strong, and this is something that we announced about 6 or 7 quarters ago, a cost efficiency program that we had launched. And it's a combination of these three factors, which has helped us to improve our margins by 240 basis points.

Now on the cost efficiency side, we remain very, very focused. And the entire organization is very focused on identifying costs -- from the idea of eliminating waste and not attacking any growth enabling costs. So that program continues to run, and we are very fairly confident that this program will continue to give us and it will continue to yield benefits to us.

The only thing that the currency environment and the macroeconomic environment, the specific thing that you spoke about with respect to Nigeria, we are seeing currently the currency is improving. It's down to about NGN 1,380 is the last number that we've seen. The actions which have been taken by the government seems to be helping us. The inflation is down, the growth is improving. So the current outlook remains -- economic outlook in our largest market remains very positive. The macroeconomic environment is supporting. There's no reason why our efforts are there to constantly continue to find opportunities to eliminate waste in our business and continue to improve margins.

As you said, we don't give guidance. I'll not be able to provide guidance, but I just wanted to paint a picture for you to say our cost efficiency program, we are very, very focused on that. Macroeconomic environment, every indicator today across our large markets because we've seen currency improving across all our markets, barring maybe one. So that environment remains fairly positive from now. And therefore, we remain fairly confident that things should continue to improve.

On the network sharing agreement, what we did was we announced a network sharing agreement with MTN for Nigeria and Uganda a few quarters ago and very recently with Vodacom in Tanzania and DRC, and also for -- Tanzania and DRC was coverage expansion duplicate and also for sharing the fiber networks. This was -- this is being done to eliminate -- fundamentally, if you look at in a continent like Africa, there's a huge opportunity for us to expand our coverage, which is the ask. And each time when we expand coverage, we increase our baseload and overall revenue for the industry goes up. To eliminate duplication of investments in infrastructure is the reason why we reached out to all of -- other partners, and we've signed these agreements.

The other challenge that we have in our markets is making sure that our networks remain resilient. And that resilience also drives growth. And because if one network goes down, we fall on the other network, and those are agreements that we've signed with our partners. So from the point of view of avoiding duplication and ensuring our -- expanding coverage and ensuring that our networks remain resilient. These benefits have already started accruing to -- some of the benefits have started accruing to our business. From a cost point of view, we will be able to share maybe at a later date. But yes some of these agreements are in play as we speak, and there is more needs to happen. And we will share a little more texture to what benefits are we accruing in the coming quarters.

But as I said, the benefits are at three levels. First is additional coverage, which allows us to acquire -- accelerate our base growth and therefore, accelerate our revenue. Resilient networks reduce outages, better experience, continuity improves and it improves our revenue. Avoidance of CapEx, that's something that helps us to expand coverage. And it also reduces our operations and maintenance and some amount of operating expenses comes down. So there are benefits which happen across the growth line and the cost lines, which is the benefit that we are seeing of signing lease agreements with our partners.

[Operator Instructions] The next question we have comes from Samuel Gbadebo of CardinalStone Partners.

Can you guys hear me?

Samuel, can you speak up, please so that we can hear you?

Congratulations on your impressive performance. It's much expected, right? But my question is on a few things I just need clarity on. Number one is we saw a lower print in effective tax rate. That's despite the higher profit before tax in the period, right? So I'm just trying to understand what brought about that? And why is the number for your effective tax -- hello?

Sam, we can't hear you. Is it something about profit after tax?

Yes. So I'm saying why did you -- why was there a lower print in your effective tax rate despite profit before tax being higher -- effective tax rate was lower in the period despite a higher print in profit before tax. So I just want to understand what drove that, and why is the number for effective tax rate in your earnings release different from the breakdown you have in your IR pack? And my next question is in the period, there's also a line that says your group effective interest rate is lower for 9 months, right? But when I did a glance -- a rough, a surface level check on your cash flow, and particularly the financing activities, there was a higher net borrowing in the period. So I'm just trying to understand why you have a lower effective interest rate in the period despite that.

And lastly, Dangote recently announced that there's going to be like an increase in PMS price by about NGN 100 thereabout. And effectively, we've seen first stations do the same here in Nigeria. My question to that effect is, is there a cause for concern with respect to how margins has been recovering, right? So do you guys have a concern? And if there is any concern, how are you moving ahead of that headwind? Did you guys get all my questions, please?

So our effective tax rate is reported at roughly 39.6%. See, it's -- there are too many moving parts in calculation of this effective tax rate. One is the mix of our profit-making OpCos and loss-making OpCos. So technically, our profit-making OpCos, the weighted average effective tax rate is roughly 32.5%. Then there are a few loss-making OpCos where we haven't triggered this recognition of the DTA. And there's a lot of upstream, which has been happening from OpCos by the way of dividends. So all this WHT, which eventually has been paid for repatriation of dividend also gets accounted in the tax line.

So it's a combination of multiple things which eventually is resulting into a higher tax rate of 39.6% versus a corporate tax rate of 32.5% in the profit-making OpCos. On a year-on-year basis, this is coming down from 41% to 39.6%. This is primarily a denominator impact because our profits are rising, hence the WHT, what we are paying for the repatriation as a percentage to the profit, which has been reported is declining. So this is at a very macro level, why the ETR is higher than the corporate tax rate and what are the broad reasons for a reduction in the ETR, the effective tax rate. But if you have any specific questions, I would request you to just drop a note to Alastair, then we can come back to you on that specific question on the ETR.

The next question we have comes from John Karidis of Deutsche Bank.

Let me add my congratulations to -- for the results that you printed today. I've got three questions, please. The first one is what are the key considerations driving your decision of where to IPO the mobile money business in which stock exchange? So what are the key considerations driving that decision? Secondly, in the statement, you talk about closer integration of the GSM and the Airtel Money services. It would be really nice to add a little bit more detail to that. What do you mean by that? And what are the consequent benefits? And thirdly, did I hear you correctly that customers with their existing handsets can access Starlink? I didn't know that was possible. Could you sort of help me out there to help me understand why that is?

Thanks, John. Let me answer your third question first because the other two are related to money and I'll take it. On the Starlink, the Direct-to-Cell service, customers can access because we have signed up -- we have signed this agreement, and we allow those customers to access the satellite service through our network. And that's how the service works. And you're right that customers with their existing handsets, 4G or 5G handsets, will be able to use the Gen 1 services offered by Starlink, which is SMS and light data. So they'll be able to make calls, voice calls on certain OTTs once we roll out these services, subject to the regulatory approvals from the respective office, and we are, at this point in time, engaged with -- along with the SpaceX teams to get regulatory approvals from the markets.

Moving on to your other question. As we've communicated even in the past, we continue to evaluate all major listing venues, and we are very close to -- we are close to finalizing the preferred location. And we will provide further updates to the market regarding the selected venue and the advisers in the due course.

The other question that you had with respect to -- see, if you look at the mobile services and money services are interdependent and hence, these services are exchanged in the ordinary course of business, which includes having money providing services to GSM like recharge, collections and disbursements. And the GSM business provides services to Airtel Money like SMS, USSD, IT support and the go-to-market services. And then additionally, Airtel Money provides added services for improving the customer stickiness for which GSM pays remuneration to Airtel Money.

So for all this, there's a value or a cost attached to it. As both businesses are gradually maturing and also the -- so all these are governed by an IGA. And this IGA is what pretty much guides all these activities. What we've seen is as the businesses are gradually maturing and also the expiry of the existing lock-ins that we had, the dependencies on each other is coming down. Accordingly, the prices have been revised considering the effect of changing market dynamics and while ensuring that they continue to be at arm's length. So that's what the interdependencies and the IGA is. What we are making sure that these -- both these businesses are intertwined, as I said, but they are all governed by an intergroup agreement that we have. And these are the services that each business provides to the other.

The next question we have comes from Linet Muriungi of Absa.

Congratulations on your strong set of results. Two questions from me. The first is regarding Nigeria's renewed leases. Could you please share details on some of the terms that you can disclose, whether there are any changes to USD indexing on the lease agreements and any fuel adjustments? And what does this mean for the new average life term of leases in Nigeria? By how much have they extended?

The second question is regarding mobile money business. Could you please share the revenue breakdown from basic services, that's cash in, cash out and airtime advance vis-a-vis the advanced services tied to ecosystem transactions? And in ecosystem transactions, could you give us a breakdown, if possible, between payments, micro lending, micro insurance, et cetera?

Sunil, can you hear us, sir?

Operator, can you hear us?

Yes, sir, we can hear you now.

Yes, okay. Sorry, there was some technical glitch in between. So I was saying there are two primary tower companies which we have within Nigeria. The first one is ATC and the second is IHS. So the contract with ATC, if you recall, has been renewed in September 2024. And the term was until, I think, it was 12 years of contract which we renewed. So that is the first element of the renewals. And the second is the IHS. And the IHS contract has been renewed till 2031. So these are the renewal terms from Nigeria to tower companies.

And related to your second question, which comes to the breakup of our revenue of Airtel Money. We do not disclose the one which you've been asking for, like what's the revenue of cash in and cash out. What we disclose is the services which are wallet services, payment and transfer and the financial services. So it will be difficult for us to give you the breakup of this one. Thank you.

Thank you, sir. Ladies and gentlemen, we have reached the end of our question-and-answer session. I will now hand back to management for closing remarks. Please go ahead, sir.

I would like to thank you all for joining this call, and I look forward to speaking to you again at the time of our full year results. Thank you very much once again.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa Half Year Results for the year ended March 2026. [Operator Instructions] Please note that this call is being recorded.

I would now like to turn the conference over to Chief Executive Officer, Sunil Taldar. Please go ahead, sir.

Thank you. Hello, everyone, and a very good evening, good morning to you all, and thank you once again for joining us today. I have with me Kamal, our CFO; and Alastair, who is Head of our Investor Relations. Let me give you some brief highlights over the last 6 months before running through our strategic and operational achievements and how this has translated into a strong set of results we have reported today. After that, I will hand over to Kamal to run through the financials.

We have seen our performance over the last 6 months supported by a much more stable macroeconomic and currency backdrop. This has been a very welcome development, and I believe enables us to clearly showcase the scale of growth that is available to us across the region and the ability of our team to execute against the opportunity. Not only is it positive for us and our business, but the most stable environment is really encouraging for our customer base as well as given the significant volatility that they have faced in the last few years.

While this most stable environment is supportive, it is also extremely important that we really double down on our strategic focus to ensure that we can capture the opportunity that is available to us. We have seen strong growth momentum in both our operational and financial performance, and this has left our constant currency revenue growth to 24.5% for the first half of the year with reported currency growth of almost 26% as currencies appreciated in many markets. This strong growth combined with continued cost efficiency measures have helped drive EBITDA margins to 48.5%.

Importantly, we have seen another sequential increase in EBITDA margin to 49% in quarter 2, reflecting the sustained momentum we have seen across the business. Importantly, the overall performance we have reported today would not have been possible without a continued focus on CapEx investment, which is the foundation of our ability to sustain the revenue performance. The strong backdrop and strong operating performance gives us increased confidence in the outlook, and it is this that has driven our decision to increase our CapEx guidance for this year, which Kamal will talk through later in the presentation.

The strong performance has driven free cash flow generation, which has further enhanced the capital structure of the group, enabling the Board to declare another 9.2% growth in the dividend. Our purpose is to transform lives across Africa by bridging the digital divide and drive financial inclusion through the continued rollout of our mobile money services.

This slide serves to highlight the key components of our performance over the last year, which is facilitating our purpose across Africa. Over the year, we have seen a continued increase in smartphone penetration and an accelerating growth in our mobile money customer base to approximately $50 million. We will unpack this a little later on in the presentation, but we have been consistently expanding the ecosystem by offering more services, which have contributed to over 35% growth in TPV or transaction value to over $193 billion annualized.

The constant currency revenue growth of 24.5% for the group, again, reflects that we are a business that continues to see one of the industry-leading levels of growth in the global telecom industries, and we will continue to drive growth through the consistent deployment of our strategy. The revenue growth and cost efficiency measures have contributed to a further uptick in EBITDA margins, as I mentioned earlier, and we remain optimistic on our ability to realize further efficiencies. In addition, our capital structure remains attractive, which gives us the flexibility to continue investing across our network. With lease adjusted leverage down to 0.8x and 95% of debt in local currency, we are in a strong position to accelerate network investment while also enabling shareholder returns.

This slide serves as a snapshot of our financial performance over the last 6 months. Revenues of almost $3 billion for the last 6 months, growing at almost 25% is certainly a very strong performance. The EBITDA growth of almost 32% is once again a strong performance with improving margins, which has significantly contributed to the 10x increase in basic EPS. Importantly, FCF generation was very strong in this period as well. It's worth reminding you that it is not only this period's performance, which has been strong, even on a 5-year CAGR, revenue and EBITDA have increased by 20.6% and 24.8%, respectively, showing that this performance is not a one-off. It is a reflection of a sustained performance over the last 5 years.

Let me now spend a few minutes explaining the significant opportunities across our markets and how our strategy will enable us to continue executing on this opportunity. Many of you will recognize this slide, which summarizes the key components of our strategy. Our business strategy is designed to ensure we continue to address the huge opportunities in our 14 markets and deliver sustainable, profitable growth that creates value for all our stakeholders.

The 6 pillars of our strategy focus on our investment and the expertise of our talented people on the core business activities that will unlock the significant opportunity. It is underpinned by a continuous drive to keep optimizing cost, meeting our sustainability objectives and sustained investments in our talent. At the heart of the strategy are our customers. Our success is driven by enhancing their experience, and this is why everything is designed around the customer.

Now let me briefly touch upon a few initiatives, which showcase how our strategy is being embedded across the business, and how it is driving practical benefits for our customers to increase customer loyalty and drive an improved offering. Let me address a few of them very brief. The first is the Airtel AI SPAM alert, which was really designed to protect our customers and provide a solution -- and provides a solution to tackle our customers concerned about the high level of spam messages and calls they receive. We are receiving very positive feedback from our customers as the technology really provides a differentiated customer experience and increase loyalty.

Developing partnerships across our markets is key to strengthen our customer proposition and promoting digital inclusion by expanding access to reliable connectivity across our markets. We have partnered with Starlink to enhance our offerings and our network sharing agreements with Vodacom and MTN will also contribute to the accelerated rollout of services across our key markets. We're also seeing very pleasing progress as we scale HBB and enterprise with the continued growth in HBB customers and the recent launch of East Africa's largest data center. This is just a brief snapshot of key strategic initiatives across the business.

Let me now briefly reflect on the opportunity and the recent performance of our business. The scale of the opportunity across Africa remains substantial despite the strong operating performance we have reported of late. From a high level, we have a population of over 660 million people. But importantly, the demographics are very attractive with the median age of under 20 years, which compares to over 42 years of age in developed markets. This shows the scale of the population that will be the customers of the future, supporting the outlook for our customer base. This, combined with relatively low levels of smartphone penetration will continue to support data customer growth but also data usage as new and existing customers increasingly use more data services often for the first time.

Home broadband is an area which we are very focused on. And the chart on the bottom left reflects why we are encouraged by the potential. We have very low home broadband penetration across our markets, will inevitably increase as rollout of these services to a wider segment of the homes across the region. And then for our mobile money segment, many of you will be aware of the levels of financial inclusion across our markets. With only 35% to 40% of adults owning a bank account compared to over 90% in more developed markets, this is a key opportunity for us, and you will be able to see how we are executing against this opportunity.

Before running through the individual segments, this chart aims to show that our growth of almost 25% in constant currency at the group level is not only down to one segment, instead it is broad-based growth across both businesses with the Mobile Services segment growing by over 23% and Mobile Money by 30.2%. We continue to see this as a differentiating factor for us with both business segments delivering on growth opportunities.

Now let me first focus on the Mobile Services segment. We continue to see the onboarding of customers as a key priority. The focus remains on strengthening our go-to-market to ensure we remain accessible to our customers, a key strategic objective. But it is not all about our distribution. It is also maintaining network investments to ensure increased capacity and coverage and embedding digital services across our footprint to simplify the customer journey. The results speak for themselves with customer-based growth accelerating to 11% in the period and voice remains a key driver of our mobile services segment with ARPU continuing to expand as usage on the network continues to expand, translating into a 13.2% constant currency growth for voice services.

As many of you are aware, data remains a substantial opportunity for us given the scale of the demand across our footprint. With population coverage of over 81% and almost 99% of our sites being 4G enabled, we continue to prioritize investment into the network to facilitate this demand, providing enhanced coverage and capacity is all fundamental to being able to provide a customer experience that will not only maintain loyalty but also attract new customers to our network. This was all supported by the initiatives we have spoken about around digital innovation and simplifying the customer journeys, driving accelerated data customer growth.

We've also seen smartphone data customers continue to grow faster than the data customer growth as more customers migrate to smartphones, ultimately driving increased usage. During the period, we saw data traffic increase over 45% as usage per customer continues to rise to 8.2 GB per month. The sustained data demand story has contributed to 37% growth in data revenues and has now become the biggest component of revenue for the group, which we see as another support for our top line growth outlook.

Now turning to our mobile money business. The chart on the left and the chart shared earlier confirms our views that our mobile money business operates in a vast underpenetrated markets. We operate in one of the world's largest untapped financial services market, supported by powerful demographic tailwinds, rapid urbanization, rising smartphone adoption and surging demand for digital financial inclusions and solutions.

While the outlook for mobile money looks attractive, it is important to highlight our structural competitive advantage with a captive customer base with only 29% of our telecom customer base currently using the service. This, combined with our extensive on-the-ground infrastructure provides us with a unique opportunity for increased market reach and low-cost scalability providing a substantial differentiation versus our competitors.

What I mentioned in the previous slide, is clearly playing out in terms of our operating and financial performance. The opportunity, the distribution reach and the scalable customer-centric platform gives us the ability to offer a range of different services, which is ably supported by deep-rooted partnerships, which can unlock new growth opportunities and drive the business to new levels. This, combined with continued innovation and the rollout of digital offerings has seen an accelerating uptake in customers and we are now approaching $200 billion of annualized transaction value with ARPUs up 11% in constant currency terms. The result has been a strong 30% growth in revenues which has once again been sustained over a number of years, indicative of the opportunity this business holds.

The strong performance of the top line should also put into context of the overall financial performance with EBITDA margins of almost 52% profit after tax for the period of $188 million and strong operating free cash flows.

Let me briefly touch on how our mobile money business has evolved and is likely to continue evolving in future years. The business mix has transformed as we have innovative products, which have been rapidly adopted by highly engaged user base. This is particularly evident within payments and transfers, which has grown to 42% of our revenues from 33% 5 years back. These revenues have been growing at a 5-year CAGR of 36% and continues to see strong growth. In addition, we are particularly excited about our financial services product segment, which captures our most recent innovation in the bank to wallet, lending savings, wealth and insurance sectors.

Over the last 5 years, these products have been growing at a CAGR of 61% with the last 12 months having seen the growth of 73% in constant currency. Overall, this mix shift reflects our maturing customer cohorts, adopting a richer set of use cases and illustrates our trajectory towards a diversified resilient ecosystem with high monetization per user.

Let me now briefly call out the key conclusions from our recent performance in each of the regions, starting with Nigeria. We have continued to see strong operating momentum in Nigeria with customers increasing around 10% and ARPU is growing almost 40% in constant currency. We are very encouraged by the macro stability that has returned to Nigerian markets, which has enabled us to report these strong trends. While the tariff adjustments made by the regulators have certainly benefited our performance, we have seen sustained usage growth, particularly in data driving a strong revenue growth performance of almost 15% in the period. EBITDA margins have increased by over 7 percentage points as a strong revenues improved macro and stable diesel prices and execution of our cost efficiency measures have taken hold.

In East Africa, trend remains strong with constant currency revenue growth of around 40% despite the high base. What we've also witnessed in the region is some appreciating currencies, which resulted in reported currency growth of almost 23% for the region. Once again, the strong subscriber base growth and increased usage of our services, which has driven rising ARPUs has been foundation of the strong growth with EBITDA margins rising to over 53% in the period.

The performance in the Francophone region has also been very encouraging. We've been seeing a clear turnaround in the performance in the region driven by consistent focus on driving base level growth through the relentless focus on our strategy. This combined with increased adoption of services has contributed to an ARPU increase resulting in strong revenue growth of 16.1% in constant currency.

Currencies have also benefited from appreciation resulting in reported currency revenue growth of 19.2%. This improved revenue growth -- revenue performance supported by a continued improvement in EBITDA margins over the year with EBITDA margins up 122 basis points over the year to 44%.

Before handing over to Kamal, let me briefly touch upon the opportunity in enterprise and home broadband and what we are doing to capture this. We are in a unique position to really drive the home broadband opportunity, utilizing our extensive 4G and 5G network. Home broadband services can capture a higher share of wallet by bundling premium connectivity with entertainment, smart home and mobile offerings that deepens customer engagement and drives increased ARPU.

We are already seeing a strong performance, and we look forward to reporting further successes. The growth of the enterprise segments and the scale of the SME sector also provides a real opportunity for us to capture the evolving needs of the enterprise and public sector, in particular, we announced recently the commencement of construction for a 44-megawatt data center in Kenya, which will run alongside the ongoing construction in Lagos of our Nigeria data center.

In conclusion, hopefully, this clearly summarizes our position across the market and reflects the performance we have achieved over the period. Importantly, we believe in our strategy and the execution of this strategy is integral to capturing these opportunities.

Let me now hand over to Kamal to run through the financials.

Thank you, Sunil. A very good morning and good afternoon to all of you. Let me start with the key financial highlights. Overall, this was a very good quarter and the first half of the year for us with a strong set of financial results, which was also helped by stable to positive macroeconomic environment in most of our geographies. Revenues for the first half at almost $3 billion, grew by 25.8% in reported currency and 24.5% growth in the constant currency. The reported currency growth was higher compared to constant currency growth due to the appreciation of currencies in few markets. For the quarter ended September, the reported currency revenue growth was at 29.1% against constant currency revenue growth of 24.2%. The acceleration in revenue growth was also supported by tariff adjustment in Nigeria, which we did it in quarter 4 of the last year.

EBITDA at $1.45 billion in reported currency grew by 33.2% in the half year. The EBITDA margin at 48.5% improved by 268 basis points in reported currency and 258 basis points in the constant currency. This expansion in margin is a result of our operating momentum, sustained benefit from our continued cost efficiency programs and stable macroeconomic environment.

Quarter 2 EBITDA margin reached at 49%, up from 46.4% in the prior period. The CapEx investment for the half year was at $318 million, which was similar to the prior period spend. Given the revenue growth momentum and stable macroeconomic environment during the period, we have revised our CapEx guidance upwards to $875 million to $900 million for the current year as compared to the previous guidance given of $725 million to $750 million. Resultant operating free cash flow at $1.1 billion in reported currency is up by 46.5%, primarily driven by the growth in EBITDA. Lease adjusted leverage at 0.8x improved from 1x again due to higher EBITDA. Similarly, our leverage at 2.1x improved from 2.3x.

Earning per share before the exceptional item at $0.083 in half year was up 70% as compared to prior period EPS of $0.049. Prior period also had an exceptional ForEx losses as a result of significant naira devaluation, and basic EPS for prior period was only $0.008 as compared to $0.083 in the current period. The EPS for the first half of this year is also helped by the derivative and foreign exchange given on account of appreciating currencies, the positive impact of which is $0.014. The Board has declared an interim dividend of $0.0284 per share, up 9.2% versus last year, in line with our current dividend policies.

Coming to the next slide. The overall revenue growth was at 24.5% in constant currency, while in reported currency, the growth was 25.8%. The reported currency revenue growth was also supported by the currency appreciations mainly in the Central African franc, Ugandan shilling and Zambian kwacha. In constant currency, our All Service segment grew double digit with voice revenue 13%, data up by 37% and mobile money revenue up by plus 30% on a year-on-year basis. With this, the absolute data revenue is now higher than the voice revenue in our GSM business.

The consolidated EBITDA at $1.45 billion is up by 33.2% in reported currency, while the constant currency EBITDA grew by 31.5%. The group EBITDA margin improved by 268 basis points in reported currency to reach 48.5% for the period. In constant currency, the margin improved by 258 basis points. As discussed earlier, the margin improvement was driven by flow-through from our accelerated revenue growth, continued benefits from our ongoing cost efficiency programs and further supported by the stable to positive macroeconomic environment in most of our markets.

Coming to the next slide. This slide reflects the key component of finance cost movement from last year. In prior period, we have derivative and foreign exchange losses of $260 million, of which losses on account of naira devaluation was $231 million, which was categorized as exceptional. However, the current period was supported by a derivative and foreign exchange gain of $90 million, especially on account of appreciation in Nigerian dollar, Central African franc and Uganda and Tanzanian shilling. Excluding the impact of derivative and foreign exchange fluctuations, finance cost increased by $126 million, largely driven by higher lease interest of $108 million, which was primarily related to the renewals of our tower contracts.

As communicated in the earlier periods, the increase in finance costs due to tower contract renewal is an outcome of application of IFRS accounting standard. However, the renewals have neutral to positive impact on the cash flows of the company. Higher interest on the market net was on account of our dedollarization program. As you all are aware that we have moved a significant portion of OpCo debt from low interest foreign currency debt to high interest local currency debt, which has shielded us from exchange rate volatility by reducing our foreign exchange exposure.

Coming to the EPS. EPS before the exceptional item was up 70% to $0.083 in the current period as compared to $0.049 in the prior period. Excluding the impact of derivative and foreign exchange fluctuations, EPS before exceptional items improved from $0.054 in the prior period to $0.069 in the current period. This increase was driven by higher operating profits during the current period which partly got offsetted by the higher finance charges, which was primarily due to higher lease interest on account of the renewal of the contract, which has been discussed in the last slides.

Coming to the normalized free cash flow. The business generated a free cash flow of $368 million in the current period as compared to a loss of $79 million in the prior period. This slide gives us a bridge between EBITDA and normalized free cash flow for the current period. The difference between the 2 other cash payments from the EBITDA in the current period will primarily include the CapEx payment of $356 million, income tax payment of $203 million, which also includes the dividend tax, the cash interest of $388 million and the other cash payments, such as lease repayments and the dividend distribution to the minorities.

We continue to focus on strengthening our balance sheet by reducing our foreign currency debt exposure across OpCos. OpCos foreign currency debt is now at 5% as compared to 11% last year, while HoldCo continue to be debt free. Our group leverage at 2.1x has improved from 2.3x compared to last year as a result of increasing EBITDA. The lease adjusted leverage has also improved from 1x to 0.8x. Our strong operational and financial performance has translated to a substantial return that we have given to our shareholders in the last few years. We have returned $1.3 billion in the last 5.5 years by way of dividends and the buyback of the shares.

On our capital allocation, our allocation policy remains the same and consistent as was in the last period. Our key priority remains to continuously invest in our business. strengthen our balance sheet and return cash to the shareholders. Our CapEx remained stable compared to the previous year with a notable increase in spending during the second quarter. With the stability in the macroeconomic environment and sustained industry growth, we believe this is a time for us to accelerate some of our CapEx investment to support and accelerate our business growth. Consequently, we have revised our CapEx guidance from the previous range of $725 million to $750 million to $875 million to $900 million. This additional CapEx will primarily be allocated towards network investment in expansion of 4G, 5G data capacity and the coverage expansions.

The second pillar of our capital allocation policy is to ensure a sustainable capital structure with leverage having fallen by 0.2x and a low level of dollar debt on our balance sheet. I'm very pleased with the current state of our capital structure. Finally, the third pillar is all about returning cash to shareholders through our progressive dividend policy. This policy has been very consistent and is again reflected in the Board decision to pay an interim dividend of $0.0284, a growth of 9.2%, which is almost consistent over the last few years now.

With this, let me now hand over the call to Sunil for his concluding remarks.

Thanks, Kamal. Finally, on Slide 30, just a few words on summary and outlook. As you've seen from our results, our strategic focus has consistently driven positive momentum across the businesses and reflects our strong track result in execution. Key to delivering value to our stakeholders is to drive continued growth across our base. Our focus will remain on investing in our network and on further expanding our distribution to be closer to our customers, while at the same time, looking at new opportunities for growth. Mobile money remains a fantastic business, and we look forward to the upcoming IPO in the first half of calendar 2026.

The recent macro backdrop has been supportive for our business of late, which has been very welcome. But this does not change our relentless focus on executing our strategy to maximize our value creation for all our stakeholders. We are exposed to a region which offers a fantastic growth opportunity. We have shown a very strong track record of execution, and we have a capital structure that will allow us to continue executing on our strategy. This puts us in a very strong position to drive significant value for our shareholders. and we look forward to reporting on these successes in the future.

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

[Operator Instructions] The first question we have comes from Ganesh Rao of Barclays.

So a couple of questions from my side. The first one on the CapEx guidance. So could you provide some color on the factors that are driving the increase in the CapEx for the year. So how much of this is one-off project versus the structural hike? And do you believe like this represents the peak in spending? Or how should we about CapEx trajectory heading into, let's say, FY '26, '27.

My second question is on the Nigeria market. So while the data consumption remained strong in the region, so the voice usage has seen like double-digit decline during the quarter. So how do you see the trends evolving in the market? And when do you expect overall growth to return to normalized level for the voice usage?

All right. Thank you for the question. Let me just respond to the first on the CapEx guidance first. See if you look at, there's been a significant improvement in the overall macroeconomic environment across most of our markets. And this is supported by a reduction in inflation and currencies are stable. The opportunity in Africa across our footprint remains very, very compelling and additional spend will only allow us to create a platform to capture further growth.

With the stability in the macroeconomic environment and sustained industry growth outlook, we believe this is the right bank for us to accelerate some of our CapEx investments to support and accelerate our business growth. Now the step -- what this does, this increase in CapEx, it actually demonstrates our confidence in the market and the opportunity that exist in the market. And as we execute our plans, we are very hopeful and confident that our customers will continue to support us and reward us.

The additional CapEx that we are deploying is predominantly going into 3 areas. The first is you've seen the numbers. There is a significant increase in our data consumption, overall data usage. The first is increase in data capacity across regions, which will further future-proof our growth initiatives and unlock additional revenues for our avenues for growth. This includes a particular focus on 5G services to enhance our network quality and speed across key areas in our larger markets. So that's the first area where the additional CapEx investments are going.

The other is, there remains an opportunity in Africa on expanding our coverage as we are seeing response to our investments. What we're trying to do now is to accelerate our network coverage and drive digital and financial inclusion across our markets. And this is the reason why we are significantly scaling up our capital investments in the second half. And as I said, what it does is it actually -- it reflects increased confidence that we have in the market, given the recent stable macro environment and the sustained demand that we've seen, which has also been reflected in our results. The acceleration in spend will enable us to further capture the share of the market. That's the reason why we are accelerating spends on CapEx.

Coming to your question -- second question on Nigeria. See if you look at Nigeria, the overall performance remains very strong. We have seen a significant improvement in our overall revenue growth, as you pointed out. There is -- the voice revenue growth has -- from our last quarter of 36% has come down to circa 33% -- 32%, 33% this quarter. There is predominantly 2 reasons that we ascribe to this. First is, there is some amount of seasonality that we see in the business, which is what has kicked in. The second thing that has happened is voice is very closely associated with the base growth.

We've seen that in Nigeria because of changes in NIMC platform, the entire industry acquisition got impacted in back half of June and some part of July. And this is something that is also getting reflected in our overall -- the voice volume that -- or revenue that you are alluding to. Lastly, there are certain -- they've also done tight rating on certain payments that we had in the business, which is getting reflected. Overall, the health of the business, underlying metrics, they remain strong. So that's how I would say is what's happening in the Nigeria business from a voice revenue point of view.

Can we have the next question, please?

The next question we have comes from Maddy Singh of HSBC.

Congrats for a great set of results. Just a couple of questions from my side. The first is a follow-up on the CapEx part. If you were to give some indication on the split of the incremental CapEx. Is the more of the new CapEx going into backhaul or radios? And what about the data center part? Because it seems like your data center ambitions are also going to cost decent money. So how much of the CapEx increment or overall CapEx for this year is going into data centers? So if you could talk about that.

And then secondly, on the -- your home broadband strategy, that is very interesting to see that you are talking about that in such -- I would say, increased passion. So I wonder, why do you think 4G is the right way to do that? Wouldn't 5G be a better fixed broadband, home broadband -- fixed wireless home broadband strategy from that perspective, 5G would be better? Or is that also part of the CapEx plan that you want to do more of that using this incremental CapEx. So if you could talk about that.

And just on the same topic, if you could also give some indication on which countries is the CapEx actually going into? Is it Nigeria? Because second quarter in Nigeria was apparently quite low on CapEx. So I wonder which countries the CapEx is also going?

Sure. Thank you very much for your questions and your comments. Let me just quickly try and address the 3 questions that you asked. On the CapEx, as I said, most of our CapEx are going into network, and this is predominantly in driving data capacity and coverage. We don't provide split between data capacity, transmission or the size, which is going into coverage. But net-net, this entire investment is going into making sure that we are delivering the best experience to our customers in the market as we see a significant increase in our usage or consumption of our services across both voice and data.

The second thing is with the improvement in the macroeconomic environment, we also felt that there is a need for us to accelerate our coverage expansion, and this is something that we are doing. And that's where the investment predominantly is going. When we look at addressing need for creating capacity for higher data consumption, it would actually mean addressing both radio as well as backhaul or transmission. So to answer your question very simply, it is radio transmission both and also capacity and coverage. That's how we're looking at our overall CapEx investments going.

On your question on data center, this increase doesn't capture any investment on the new data centers that we've announced, whether the investments that we announced for our data center in Nigeria or in Kenya that we recently announced. Most of those investments will come in the future. So these are all long gestation projects.

Moving on to the question that you asked on home broadband. See, home broadband, we see as a very, very attractive opportunity for Africa because the current penetration in home broadband in this category is very, very low. And that is the reason we said that this category needs a lot of attention and for us to make right investments, at the same time, build our capabilities within the business to be able to go and capture this opportunity.

The approach that we are taking is to first leverage our 5G investments in spectrum through the FWA rollout because that's where we are able to -- with respect to speed to market and also the current consumption in the market for the customers is relatively low, and we believe that we will be able to meet the customers' expectations, meet their consumption requirements and offer very good experience through the FWA. So it serves both the purposes for us to be able to leverage our 5G spectrum investments or the radio investments. At the same time, also deliver the right experience to our customers.

Having said that, we are also, at the same time, looking at selectively wherever we need to deploy fiber home buses in select geographies within our markets. So that's the work which is separately happening. But this is an evolving space. We have started this work. We're building a lot of capabilities, as I said, both in terms of our ability to serve our customers, our go to market and our ability to manage and deliver experience to our customers, and we'll continue to give you more updates on this front as we progress.

The third question was with respect to which countries that we are looking at from a home broadband point of view. This home broadband, we're looking at across our footprint. In most cases, the opportunity actually is in the urban markets. On the CapEx, the question that you asked, which countries? We don't provide country-level breakup. The breakup at the market segment is available in the results that we have declared. In Nigeria, there is also -- overall, if you look at in the first half, our CapEx is very similar to what we had last year at an overall level.

Quarter 4 of last year saw significant CapEx deployment in two of our market segments. And therefore, this is the highest EBIT, which saw some impact in the first half of this year, but we are seeing investments going across markets wherever we feel that there is a need. Because we have a very strong framework for determining our entire capital allocation and CapEx investments. And we are guided by that, and that's something that will decide, and this is something that is guiding our decisions.

So as I said, Nigeria, East Africa saw a significant quarter 3, quarter 4 investments, and you will see the rest happen across markets in the balance part of the year.

The next question we have comes from Rohit Modi of Citi.

[indiscernible] some of them has been answered. I have 2 follow-up on 1 question on margin. A follow-up again for CapEx part. Can you confirm like this is now the base CapEx level for future years? And given you said this doesn't include the data center CapEx that you allocated for Nigeria and that has been postponed a couple of times. That doesn't include so the CapEx should -- could I believe increase from these levels if we go ahead and build those centers as well. That's my first question.

Second, again, a follow-up on the Nigeria Voice [indiscernible]. I mean, again, you can just confirm like [indiscernible] normal way of voice continue to low [indiscernible] given you have seen all the [indiscernible] have now have gone in and you will see more growth from here kind of any color there.

And thirdly, on the margins, your commentary around improvements in margins. Just any color in which country [indiscernible] anything or margin improvement? And just particularly especially from Nigeria because you have [indiscernible] margins in Nigeria right now, which kind of [indiscernible]. Do you see more improvement in Nigerian margins? And what will be driving that? Is this the operational leverage or [indiscernible] margin?

Yes. So let me just try and address the questions that you asked. You were not very clear on your second question that you asked on voice -- Nigeria Voice. If you can just repeat that, that will be helpful.

Sure. On Nigeria Voice, [indiscernible] you mentioned last quarter that a bit of a last year such an impact that you see [indiscernible] on voice and that grew something in last quarter, but you have seen more decline. So I'm just trying to understand, is this a bottom in terms of voice you say when you go from here? Or is [indiscernible] where you see voice is declining and data is growing and there's a bit of [indiscernible]?

So -- okay, Let me just try and address the 3 questions that you asked. The first is on the CapEx for future. We don't give future guidance for CapEx. Right now, what we have done is given the, as I said, a very strong macroeconomic development and certain need that we felt and the response that we're getting to our investments is where we've increased our CapEx for this year. We will talk about our -- the CapEx for next year, when we -- at the end of this financial year. Data center, as I called out, is not part of, say, for example, this increase in CapEx that we have. That data center investment is we will see over the course of next 2 to 3 years, because as I said, it's a long gestation, and the 10-year data center we've just announced, and it will flow over a period of time. But we'll provide details for FY '27 when we meet at the end of this year.

On the voice revenue, the question that we asked -- that you asked, as I said, these are -- there are 2 reasons which is predominantly, as we said. The first is with respect to -- there is a base growth sequentially that we have seen -- there was an impact because of -- there was a NIMC correction. We expect the voice revenue to recover. At the same time, there is a little bit of seasonality that we've seen. And to separate what has been the real impact of these 2? And is there any drop in voice revenue that we see, very difficult to say at this point in time. As we start to pick up on our customer acquisition and our base growth accelerates, we should see uptake on the revenue.

Having said that, because we've also done some titrating of the minutes, and which is where we are seeing some amount of consumption change as well. So voice revenue on -- we remain confident that overall revenue growth for Nigeria looks very, very solid right now. But -- and there are 2 reasons, as I said, for the impact on voice revenue. Will it continue to hold? We should see because it's very difficult for us to split as to how much of this is being caused by removal of the minutes and how much is the base growth.

Coming on to your question on EBITDA margins that have reached almost 56.5%. See, on Nigeria specifically, which is where you were pointing to, the margin expansion is an outcome of first and foremost is a very stable macroeconomic environment. Because in Nigeria, in the past, we were seeing significant challenges because of inflation. The second was fuel prices. The fuel prices have -- are stable in Nigeria.

The second is inflation is coming down. And the third is we remain very, very focused on our cost efficiency programs, which has also significantly helped us to improve margins in Nigeria. And in macroeconomic environments remaining stable -- and we continue -- we remain focused to make sure that we continue to push for opportunities of cost saving and cost-saving initiatives in further opportunities for saving costs in Nigeria and across all our markets.

Yes. And just to build on Sunil's point, this is Kamal. We have recovered our margin from the last year of 45% to 49% now. With the stable macroeconomic conditions yes, and like this continued cost efficiency program and flow-through operating momentum, we are pretty hopeful that we will keep on working on the expansion of the margin. Subject to the stability in the macroeconomic environment, we will see the improvement in the margin, but the rate of increase in the margin may not be in line with what we have seen in the last 3 quarters.

[Operator Instructions] The next question we have comes from Cesar Tiron of Bank of America.

I have 2, if that's okay. They're both on Nigeria. The first one, I'd like to understand a little bit better why your service revenue growth rate is below that, which was reported by the market leader in the past quarter. We don't -- we're not sure for this quarter, right, because we've not reported yet. But what do you attribute this to when you look at the data? Is it a difference of pricing and how you increase prices a couple of months ago? Or do you think that actually relates to network availability, which actually explains why you had to increase the CapEx so much? That's the first question.

Second question, I wanted to ask about the potential for price increases in Nigeria in 2026. Do you have any opinion on it?

All right. So if you look at our overall growth in Nigeria, which is approximately 50%. So we are very happy with the growth, which has benefited following the adjustments of our tariffs, which is in line with the approvals that we received from the regulator. While I will not comment on the performance of the competition, the way we look at it is, we had 75% of our total portfolio, which is where we have applied our pricing. Was it similar or different for the competitor, we will not be able to comment on that. But the way we look at, Nigeria still continues to offer significant opportunities for us for growth.

We have seen strong execution of our strategy in Nigeria. We've also seen the overall pricing has settled down well with significant growth across all the revenue segment that we have. So that's where we are, and we continue to stay focused on -- and we are making significant investments in making sure that we have enough capacities in our network and our go-to-market to be able to accelerate our growth in Nigeria. So that's for So that's on your first question.

The second thing that you asked about our pricing for the future, which is for next year. There is no minimum period before which we can increase pricing in Nigeria. So we will assess when is the right time. Once -- we are right now seeing that the price -- the overall price adjustment of circa 50% has been kind of well accepted. The markets have settled. We will decide at the right time to approach the regulator and go for another price increase. Whether the extent of that is something that we will have to assess, but there is no minimum time or period before which we can take another price increase. Those options are absolutely available to the operators.

I just wanted to follow up. I just wanted to understand if the price increase that was implemented this year, was it part of a multiyear framework where we agreed with the regulator to pass on back to the customers some of the inflationary impact on the business? Or was it just a one-off? Did you agree on the framework? Or did you -- just on the one-off in 2025?

This was -- because given the inflationary conditions that were during the time when we reached the regulator for a price increase, that is a time that when -- there were 2 or 3 pressures in Nigerian economy at this point in time. This was a significant devaluation of currency, very high inflation, high fuel prices. To offset all of that, this was the price adjustment that the authorities have agreed to give to the industry. This, I don't think serves as the precedent or neither was there a time period, as I said. So we have the option to go back to the regulator and ask for another price increase at the right time. And this is something that we will surely assess. Yes. Thank you.

The next question we have comes from David Lopez of New Street Research.

I have 2. The first one is on mobile money in Nigeria. If you could give us an update on how long do you think you need -- how much time to fully build the base? And when should we see a step up in revenue there? And the second question is just on the spectrum auctions, if you could tell us what are the upcoming spectrum auctions across the group, please?

All right. So let me first address the Nigeria money opportunity. So if you look at Nigeria offers a very large opportunity for the mobile money business. At the same time, it is also relatively as compared to what we see on the other parts of our footprint, it's an evolved relatively more mature markets with significantly a large fintech operators as well as banks well entrenched in the ecosystem.

Having said that, we have a very clear opportunity because we currently enjoy an existing relationship with our customers. and with high smartphone adoption, this market offers significant opportunities for growth for us. So where are we focused right now is -- and I say this, I think almost I've said this even in the past quarters, that this market is going to take some time as long as we are doing the right things and building the right capabilities to be able to win with our customers.

So I'll tell you what we are doing right now, and we are seeing early green shoots of some of the work that we're doing. In terms of our key focus areas, we first is acquiring quality customers. In terms of our base growth, we now have about 2 million active customers in Nigeria. And most of these customers, a very large portion of these customers is engaged in our mobile money app, which allows us to engage with them very, very actively.

The second thing that we are doing is we're building capabilities to be able to meet all the asks and demands of our customers and match up to the functionalities that they get from other fintech. Whether it is a virtual card or a saving bank account, these are capabilities that we are rolling out in Nigeria. The way I see it, it's a big opportunity. Our teams are doing a fantastic job in building capabilities and acquiring customers.

And the only thing that I will say is, this is relatively a difficult market because it's a well entrenched market. It's going to take us some time, but this is one area where we are -- we have a massive focus and there is -- we're not leaving any stone unturned, neither are we saying no to investments to accelerate our business in Nigeria. As I said, we are already seeing some early green shoots, which make us hopeful that we'll be able to turn around this business in Nigeria.

Coming to -- Kamal, do you want to just talk about the spectrum auction business?

Yes. In 2027, I think Nigeria 10 megahertz of 900 is coming for renewals and Kenya, license for 2G, 3G will start coming for renewal. So these are the 2 large renewals, which is due in 2027. Thank you.

[Operator Instructions] I would now like to hand over to Alastair for any webcast questions. Please go ahead, sir.

Yes. Thank you. Just a couple of buckets of questions coming in from the website. I was hoping that Sunil and Kamal address. Firstly, just in terms of the mobile money, the intragroup agreements, there were some amendments made -- and just some clarity on what those renewed agreements would impact, how they impact revenues and sort of what is the retention revenue? What you sort of define as retention revenue? So that's on one point.

And then the second point, just coming back to cost efficiencies. Can you elaborate on any specific cost efficiency initiatives that you are looking at the moment? Could you just give some sort of color as to how -- what efficiencies we're looking at? And secondly, just associated with that, has there been any margin benefit from a drop in fuel prices or diesel prices in our numbers for this quarter?

Sure. So let me address your first question, which is on the IGA changes. See if you look at our GSM business and mobile money business, they are interdependent businesses. And in ordinary course of business, there are various services exchange between them such as Airtel Money providing services for -- to the GSM business like recharge collections and disbursements. Similarly, GSM providing services to Airtel Money like SMS, USSD and go-to-market, et cetera. So these -- all these agreements that we have, all these services are governed by long-term agreements that we have. And these agreements are very established, and they are also as per -- they're fully compliant with the regulation for both the businesses.

As these long-term agreements came up for -- as I said, they were agreed upon some time ago, and this was time for us to -- as they come up for renewal and in line with the market benchmarks, so we've kind of revisited these agreements and renegotiated the terms of intragroup agreements in line with the changing market dynamics between the mobile services and the mobile money businesses during the second quarter, while ensuring that they continue to be on arm's length.

These agreements are also discussed and aligned and agreed with the minority shareholders. So that's where we are. And the full impact -- and I must also add here, the full impact of these agreements or of these changes will come in phases over the next 8 to 10 quarters based on the current volumes. The current year impact will be circa about in terms of percentage EBITDA because Airtel Money is also a very high-growth business. In percentage terms, the impact would not be maybe more than 1 or 2 percentage points of EBITDA as we go forward. It will be in low single digits is the way I would put it, overall impact of the IGA changes on the Airtel Money EBITDA.

And coming to your second question on cost efficiencies. There are 3 or 4 areas that we look at from a cost efficiency point of view. The first is if you look at where our big cost components are? Our big cost is actually in network. The way we are looking at is, first is a big -- within network, a big cost component is our tower running expenses, which is energy. So what we're doing is we're working with tower companies to invest in more energy-efficient solutions, whether it is batteries or solar, invest in lithium-ion batteries or solar equipment, and this is one area that we're working on.

The second area that we are working on is, as we look at our new sites which are coming in either in rural or these are the infill sites in urban areas. So instead of having a full macro sites, do we have lean sites, which are relatively lower in terms of cost -- running cost is lower. The third area is moving sites from off-grid to grid. So these are 2 or 3 areas where we are working very closely to be able to generate certain efficiencies.

And as we said that the stable oil prices is one of the reasons for us not to see margin kind of deterioration we've seen some benefit because our oil prices have, by and large, been stable. We've not seen oil prices go down. We have seen oil prices remaining stable. So we're not adding to increase in costs, but at the same time, there is -- we're not seeing a significant cost reduction because of oil prices.

Thank you. Go back to the Q&A.

The next question we have comes from John Karidis of Deutsche Bank.

Is it possible, please, to explain the reasons for the nearly sort of 200 basis points reduction in mobile money EBITDA margin in the second quarter, I'm trying to figure out whether it's exceptional or not. And then secondly, regarding the CapEx, I'm sorry to come back to that. I know you don't give guidance for next year, I'm just sort of trying to figure out whether we should all go back to our spreadsheets and assume $150 million more CapEx per year going forward, from what you say in terms of coverage, once you get the coverage, you don't need to keep expanding. But for data capacity, you might need to keep adding capacity. So if I were to look at your CapEx envelope over more than 1 year, are you bringing forward capital expenditure? Or are you sort of increasing capital expenditure consistently over that period of time, just so that we know what to put in our estimates, please.

Okay. Thank you for your question. I'll take your first question first on the mobile money EBITDA margins. As Sunil had just spoken about our renegotiation of the intragroup agreement, the impact of those renegotiations is roughly $11 million on EBITDA of Airtel Money, and which has an impact of roughly 2.3%, 2.4% on Airtel Money. So if we normalize for that, intrinsically, the EBITDA margin of Airtel Money is flat to slightly positive. So there is no one-off exception which has been sitting in the EBITDA margin of Airtel Money.

I'll hand it over to Sunil to take the second part of the question, please.

Yes. Your second question was the future guidance of CapEx, right? Essentially, I'll be repeating myself...

I'm sorry, I'm just trying to figure out whether this is a sort of permanent increase in yearly CapEx or not? Because if I read what you're saying, if you're going just for coverage, you only spend it once. But for data capacity, you spend it yearly. So just sort of a steer would be good. And by the way, I'm sorry, I asked the same question about the margins. The line is not good. So I'm sorry about that.

Okay. Let Kamal repeat the response of the margin. Kamal, the line wasn't clear. So...

No worries. So this margin drop is on account of the new intergroup agreements, which came into effect effective first of July this year. The impact of that is the margin for mobile money is coming down. The impact on the mobile money absolute EBITDA is roughly around $11 million. And on year-on-year margin is roughly around 1.5%, 1.3%, 1.4% for the first half and 2.3%, 2.4% for the quarter, if you compare the same quarter of the prior period. So if you adjust for the impact of the renegotiation of the intragroup agreement between the group, intrinsically, the margin for mobile money is flat to slightly positive. So that was an answer on intragroup agreement. If you don't have any further question on mobile money margin, I'll hand it over to Sunil to answer the CapEx part of the question, please.

So I'm assuming that your mobile money margin question is answered. I'll respond to your question on CapEx investments. See, I'll be kind of repeating myself, but it is very -- we don't give future guidance on CapEx investment. Having said that, when we -- CapEx has -- when we did this exercise with the recent increases in data consumption and also a need for us to accelerate given the response that we are getting in the market. It's a very detailed exercise that happens to determine what's the real CapEx requirement for the businesses.

Now our next year client cycle actually has just about started and we will conclude this by December, and that's when we go to the Board because there are many moving pieces. With this investment that will go in how much of the population that we are wanting to cover that gets covered, how much capacity have we added? There is also some amount of changes, which is what I was alluding to the other question on margin, which is I spoke about, which is a mix of lean sites versus macro sites.

So there are a few -- and plus there are a few moving parts that we have, and therefore, it is very difficult for us to give any guidance to say whether this is a new normal or that we will go -- or this is a one-off. For this year, definitely, what it actually talks about is our confidence in the overall macroeconomic environment remaining what it is. And we felt that this is the right time for us to make investments, create capacities, deliver great experience, accelerate our growth and take higher share of the growth opportunity that Africa offers across our footprint, which is something that we've done.

We'll have a little more clarity once we have done our own workings to say whether this is going to be -- which is probably that you're trying to understand, same as next year or probably a new normal. But we are not in a position to help you to plug this in your worksheets, so to speak, which is something that you're trying to solve here.

Just to clarify quickly just on the commentary around the intragroup agreements amendments, just what Sunil was saying, the impact over the sort of medium term as a result of those agreements, given volume flows, et cetera, is going to be low single-digit impact on EBITDA margins. Just to clarify that.

Yes. The impact of these intergroup agreements on mobile money margins will be in low single digit.

Ladies and gentlemen, unfortunately, we have reached the end of our allotted time for today's question-and-answer session. Sir, would you like to make any closing comments?

Yes, I want to thank everyone for joining the call today and for all their questions, and we look forward to our continued engagement with you all. Thank you. Thank you very much.

Thank you.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.