Millicom pushes for US$9 billion annual sales by 2017

Millicom, the telecom group with mobile operations in Africa and Latin America, repeated its goal of generating US$9 billion in sales by 2017 – spurred on by digital growth – which is a dramatic hike from the US$5.2 billion turnover posted in 2013.

The group is counting on increased sales of mobile data, broadband, pay-TV and mobile banking as it continues its transformation into a “digital lifestyle company”.

In a performance update the company highlighted that overall revenue (in local currency) is growing at an annual rate of nine per cent. Mobile is moving forwards by six per cent, cable 16 per cent, and mobile financial services up by 41 per cent.

The company says 23 per cent of its users now use mobile data services compared with 17 per cent a year ago.

“We began to convert the company into a digital lifestyle provider last year and now, with talented global and local teams, we are committed to the rapid implementation of this plan,” said Hans-Holger Albrecht, Millicom’s chief executive. “Millicom’s growth and transformation is well on track.”

A projected EBITDA margin of 35 per cent in 2017, however, is slightly lower than previously expected. “The lower EBITDA margin businesses are growing a bit faster than anticipated,” said Albrecht, referencing cable and digital services.

Coinciding with its performance update, Millicom unveiled two new digital music initiatives in Africa. One is Tigo Music, which is set to launch across Millicom’s African operations, starting in Ghana, in Q4. Bundled as part of prepaid data plans, the service will offer unlimited music streaming with instant access to a library of more than 30 million songs.

The other initiative is Africa Music Rights (AMR), a new venture in partnership with Africori (an online music licensing platform) to fund, acquire and manage music rights.

Key areas for AMR growth, according to the report, include South Africa, Nigeria, and Kenya, as well as Millicom’s six Tigo markets.