Airtel Nigeria Posts Impressive $445m Quarterly Revenue Despite 4% Drop In Subscribers
Airtel Nigeria posts impressive $445m quarterly revenue despite 4% drop in subscribers
Airtel's telecom business in Nigeria is growing despite a drop in subscriber numbers of 4 percent. According to Airtel Africa's results for the three months ended June 30, 2021, revenue generated in the country increased by 30.5 percent to $445 million, an increase of 30.5 percent year on year.
This represents a significant increase over the 12 percent growth recorded in the previous quarter, as well as a significant increase over the $341 million generated during the same quarter last year.
According to the report, the telco's revenue growth was aided in part by a weak performance in the first quarter of the previous year, which coincided with the peak period of Covid-19-related restrictions in the country.
However, if the Nigerian naira had not devalued by 6 percent, the rate of growth would have been even higher (YoY).
Data sees the highest growth
A breakdown reveals that voice is the most profitable revenue generator for the telco, with revenues increasing by 28.0 percent to reach $238 million. The increase in voice usage per customer, which corresponded to a 29.3 percent increase in average revenue per user, was the driving force behind this development (ARPU).
Additionally, data contributed significantly to the revenue growth recorded during the quarter, which increased by 48.8 percent to reach $171 million. This is the highest percentage growth rate recorded by any segment of the telecommunications industry.
It was the 41.5 percent increase in average revenue per user (ARPU) for data that fueled the data boom, which was accompanied by a 42.2 percent increase in data consumption per customer. “Airtel subscribers used an average of 3.8 GB per month, which is an increase from 2.7 GB per month in the previous quarter.”
Other revenue increased by 70.9 percent, with the majority of the increase coming from an increase in value-added services revenue, which was led by the growth in airtime credit services.
4% drop in subscribers
In the first quarter of its fiscal year, Airtel lost approximately 1.6 million active mobile customers in Nigeria, according to the company. This is in addition to the 2.5 million customers who were lost in the first quarter of this year as a result of the effects of the sim registration ban.
Although the company suffered a loss, its revenue increased, as shown in the chart above, primarily as a result of the significantly lower ARPU of the churned base and the increased usage by the active base.
The National Communications Commission (NCC) lifted the ban on sim sales and registration in April, allowing new customer enrolment to resume from authorized outlets. As a result, the total number of data customers increased by 2.5 percent, to 17.8 million.
Airtel Nigeria has a total customer base of more than 40.9 million people at the time of writing. The report, however, is lower than the National Communications Commission's June figures for Airtel, which put the company's customer base at approximately 50.6 million, making it the country's second-largest telco.
Airtel Africa profit doubles to $142m
During the third quarter, Airtel's revenue in Africa increased by 30.7 percent to $1.1 billion in reported currency. This represents a significant increase over the $851 million raised during the pandemic the previous year.
Revenue growth across the continent benefited from a weaker quarter in the previous year, which was similar to what happened in Nigeria.
Nigeria experienced the greatest increase, with a 38.2 percent increase. East Africa came in second with revenue growth of 32.8 percent, followed by Francophone Africa, which experienced double-digit growth of 24.9 percent in the third quarter of 2018.
Despite the increase in revenue, the revenue was negatively affected by currency depreciation, which was particularly severe in the Nigerian naira (6 percent) and Zambian kwacha (14 percent) (24.2 percent ). This was partially offset by an increase in the value of the Central African franc (6.6 percent) and the Ugandan shilling (6.6 percent) (5.3 percent ).
In general, the increase in revenue resulted in a net profit after tax that more than doubled to $142 million, representing an increase of 148.7 percent over the previous year. The increase in profit was primarily due to higher operating profits combined with stable net finance costs, which more than offset the increase in tax charges as a result of the increase in profit.
Mobile Services rakes in $955 million
An in-depth examination of the segments reveals revenue growth in the double digits. Mobile services, which include both voice and data, saw a 27.6 percent increase in revenue to $918 million from $719 million during the same period the previous year.
Voice revenue contributed $562 million to the total revenue of $918 million, representing a 23.8 percent increase over the previous quarter. In a similar vein, the number of subscribers increased by 8.4 percent to 120.8 million.
Within the regions, Nigeria had the highest contribution in terms of voice revenue with $238 million, followed by East Africa with $178 million and Francophone Africa with $146 million.
Data's share of the market increased by 34.5 percent to $356 million. The increase in the number of data customers to 42.4 million, as well as an increase in data usage, were the primary drivers of the growth.
Nigeria contributed $171 million, East Africa contributed $105 million, and Francophone Africa contributed $80 million.
Mobile money
Mobile money has continued to be one of Airtel's fastest-growing service segments in Airtel Africa, accounting for 11.15 percent of total revenue in the quarter ended December 31, 2014.
The segment's revenue increased by 52.8 percent percent to $124 million for the quarter ended June 30, 2020, from $81 million for the previous quarter and $110 million for the previous quarter.
Growth in the customer base contributed to the 24.6 percent increase in revenue, while ARPU increased by 25.4 percent, with the highest percentage increase coming from a 34.2 percent increase in transaction value per customer.
The expansion of the company's distribution network was a major factor in the increase in its customer base (kiosks and mobile money branches).
East Africa has the highest proportion of mobile money users across all regions. The region generated approximately $91 million, an increase of 57.6 percent from the previous year's $58 million. Francophone Africa is ranked second, with sales increasing by 41.3 percent to $33 million during the third quarter of the year.
Investors have flocked to Airtel's mobile money arm, which has raised more than $500 million in capital as a result of the rapid growth of the service. Investors include Mastercard ($100 million), TPG's Rise Fund ($200 million), and most recently the Quartar Holding LLC with a $200 million investment in the company.
Summary
Despite continuing negative net additions in Nigeria, the growth of Airtel's customer base has begun to recover, with an acceleration in East Africa and Francophone regions, according to the company.
Airtel claims that since the relaxation of restrictions in late April, it has been able to add even more customers. This is demonstrated by the NCC's June numbers, which show that the telco gained approximately 600 thousand new customers.
Generally speaking, the telco will continue to place emphasis on the modernisation and expansion of its network, as well as on streamlining products and improving distribution, according to the report.
The company says it is taking into consideration the potential impact on local economies and consumers in the wake of the third wave of the pandemic and the addition of lockdowns and restrictions in Sub-Saharan Africa, according to Airtel.
