Contrasting fortunes for two telecoms giants

Contrasting fortunes for two telecoms giants

Two of the biggest names in world telecoms – one a vendor and the other an operator – are looking forward to very different financial outlooks in the coming months.

The continuing uncertainty about Huawei’s business plans in the light of the recent (albeit partly suspended for a few months) US export ban has led to a much-lowered revenue prediction from chief executive Ren Zhengfei.

Revenues over the next two years are now estimated at US$30 billion less than forecast. There is also likely to be a reduction in production. Smartphone sales were down 40 per cent last month and the company is readying itself for a large fall in unit sales over the year as a whole. Huawei is also registering its own operating system in countries around the world as it prepares for a possible loss of access to Google's Android software. Huawei is on a US blacklist; American companies that want to sell parts to Huawei will need approval from the US Commerce Department.

There’s better news from the market for Airtel Africa, which is aiming for a valuation of up to £3.6bn as a London listing gets ever closer. The second-largest mobile operator in Africa, active in 14 African countries and owned by Bharti Airtel of India, has set a price range for its initial public offering at 80p to 100p. That’s a market capitalisation of £3.007bn to £3.623bn, excluding an overallotment option. The listing is part of a strategy to cut debt levels.

There’s going to be a two-week wait before the immediate success or otherwise of this strategy is confirmed; shares are expected to begin trading on 28 June.


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