EXCLUSIVE: Airtel locks in Madagascar future with $32.5M, 15-Year license

Airtel Madagascar, a key player in the nation’s telecommunications sector, has secured a 15-year global operating license, signalling a long-term commitment to expanding its services in the East African island nation. The deal, valued at $32.5 million in local currency, will be settled in five annual instalments in March 2025, the company confirmed in its annual report.

This strategic investment underscores Airtel’s intent to solidify its footprint in a market characterised by a robust and growing ICT sector, despite Madagascar’s broader economic challenges. Mobile penetration reached nearly 80% in 2024 and is projected to climb to over 90% by 2034, largely fueled by prepaid subscriptions. While the uptake of 3G and 4G services is gradual, the long-term growth potential is significant, particularly as Madagascar increasingly positions itself as a hub for call centres and business process outsourcing, benefiting from its low-cost, high-quality labour and relatively strong internet infrastructure.

Airtel Madagascar, the second-largest operator with an estimated 4.9 million subscribers, is navigating a competitive landscape dominated by Telma (over 5 million subscribers) and Orange Madagascar. The latter has aggressive expansion plans, aiming to boost its population coverage from 56% to 90% by the end of 2024.

The new license positions Airtel to capitalise on the anticipated demand for data and broadband. . This investment follows Airtel Africa Plc’s earlier strategic move to divest its tower assets in Madagascar and Malawi to Helios Towers Plc, a deal announced in March 2021. The sale of the Malagasy tower portfolio to Helios Towers was completed in November 2021 for a gross consideration of approximately $52 million, with proceeds intended to reduce group debt and fund network and sales infrastructure investments.

While economic vulnerabilities often define perceptions of Madagascar, its ICT sector tells a different story of dynamism. The government has been actively promoting digital transformation, aiming to increase the digital sector’s contribution to GDP. The availability of skilled labour and improving connectivity have attracted international BPO firms.

As the country pushes for greater digital inclusion and network coverage expands, the battle for subscribers and data dominance among Telma, Airtel, and Orange is set to intensify, promising a dynamic future for Madagascar’s telecommunications landscape. The long-term payment plan for the license also suggests a phased investment approach, aligning with the country’s expected gradual maturation of advanced mobile services.