Airtel Earns $1.03 Billion In Q3 2021, Driven By Data Revenue Growth That Outpaces Voice And Mobile Money Growth
Airtel earns $1.03 billion in Q3 2021, driven by data revenue growth that outpaces voice and mobile money growth
Airtel Africa, a subsidiary of India's Bharti-Airtel, has maintained its outperformance in terms of profit and revenue margins compared to the previous quarter.
It generated $1.03 billion in revenue in the first quarter of 2021, an increase of 21.7 percent over the previous quarter's $899 million.
According to the third quarter financial report released on Thursday, October 28, 2021, the company experienced yet another significant increase over the same period in 2020, according to the report.
Before currency fluctuations, the telecom company's revenue in the third quarter of 2021 was $1.160 billion, an increase of 22.7 percent from $965 million in the third quarter of 2020. (constant currency). Taking into account exchange rate fluctuations (reported currency), the increase is 20.1 percent, a difference of 2.6 percent from the previous year.
While voice continues to reign supreme, data is not far behind
Voice generated the most revenue, $578 million, as has become customary, followed by data and mobile money, which generated $377 million and $135 million, respectively, in the quarter.
However, while voice continues to be the dominant technology, its revenue increased by only 11.6 percent — or $60 million (reported currency) — from the previous quarter's $518 million. Data increased from $283 million to $377 million over the same period, representing a 33.0 percent — or $94 million — increase.
During the same period, mobile money transactions increased by 34.6 percent, from $100 million to $135 million.
The same pattern was observed in the second quarter of 2021. Voice revenue led all other revenue sources with $562 million, followed by data revenue with $356 million and mobile money revenue with $124 million, respectively.
Airtel's voice, on the other hand, is not the only king. For the third quarter of 2021, voice revenue was the highest at $234.3 million, followed by data revenue, which totaled $137.68 million, according to MTN Nigeria's financials. In the third quarter of 2020, the telecommunications company reported a similar revenue trend.
According to Airtel, the company is concentrating its efforts on increasing smartphone ownership and, as a result, data consumption. In order to accomplish this, the company will enter into OEM partnerships as well as expand its network of retail locations that sell smartphone devices.
Sub-Saharan Africa's 4G connectivity is expected to reach 28 percent by 2025, according to the Global System for Mobile Communications Association (GSMA). This could lead to an increase in data consumption, which would elevate data to the status of the new king of revenue.
Airtel now has 43.9 million data subscribers, an increase of 10.9 percent from the previous quarter's figure of 39.6 million.
When comparing the third quarters of 2020 and 2021, the number of mobile money customers increased by 19 percent, from 20.1 million to 23.9 million, respectively.
Airtel's customer base in the 14 African countries where it operates has increased by 5.4 percent, from 116.4 million to 122.7 million, according to the company.
During the quarter under review, Airtel's profit before tax increased by 81 percent to $308 million, compared to a profit of $170 million in the same quarter the previous year.
Profit after tax, on the other hand, amounted to $192 million, representing an impressive increase of 118.6 percent over the previous year's $88 million.
In contrast, the year-on-year (YoY) growth rate falls short of the 148.7 percent recorded in the second quarter of this year. Moreover, the company's year-over-year revenue growth rate of 22.7 percent falls short of the previous quarter's rate of 33.1 percent, which the company continues to attribute to COVID-19 2020 restrictions.
"Weak performance in the prior year's first quarter, during the peak period of Covid-19-related restrictions across the region," the company explains as the cause of the decline.
Nigeria's economy continues to be a cash cow, and data revenues are growing at an exponential rate.
Nigeria's telecom company saw a significant increase in revenue over the previous year, according to the company. In constant currency terms, revenue increased by 27.1 percent.
However, revenue for the telecommunications behemoth increased by 38.2 percent in the previous quarter.
According to tradition, Nigeria generated the most revenue out of the 14 countries in which Airtel operates. The country's revenue in the third quarter of 2021 was $450 million, an increase of $73 million from the third quarter of 2020.
The country's revenue exceeded the total revenue of all East African countries combined by $22 million, for a total revenue of $428 million.
In Francophone Africa, the company earned $285 million, placing it $165 million behind the leader, Nigeria.
Interestingly, Nigeria's data revenue increased 41.5 percent year on year, rising from $139 million to $179 million in constant currency, a 41.5 percent increase from the previous year. The growth rate in reported currency, on the other hand, was 33.1 percent.
When measured in constant currency, voice revenue accounted for the lion's share of total revenue growth, which increased at a rate of 14.6% compared to 7.7% when measured in reported currency. From $216 million in the third quarter of 2020 to $233 million in the third quarter of 2021, it has increased significantly.
The increase in data revenue, according to Airtel, is due to an increase in data usage per customer. The amount of data transferred each month increased from 2.7GB to 3.9GB.
Nigeria's total customer base has shrunk to 40.4 million, from 44.1 million in the third quarter of 2020. The customer base has also shrunk from 40.9 million in Q2 2021 to 40.9 million in Q2 2022, according to the company. Customer acquisition has been halted, resulting in a reduction in the total number of customers in the country.
For its part, Airtel claimed that the decrease in its customer base had no discernible impact on its revenue..
The company asserts that its financial results for the third quarter of 2021 demonstrate that its strategy has been successfully implemented and executed. Segun Ogunsanya, the CEO of Airtel Africa, stated that "all of our service segments are outpacing our FY'21 revenue growth trends, which are all in the high double digits in reported terms."
