Data Drives Airtel Nigeria’s Quarterly Revenue To $422m Despite Slow Subscriber Growth
In Nigeria, Airtel's telecom business is booming. According to Airtel Africa PLC's quarterly report, the company's revenue in the country increased by 13% to $422 million in the quarter ended March. Last year, the telco earned $377 million in the same quarter.
The increase was fueled by a 26.4 percent increase in data revenue from $120 million to $152 million. This accounted for approximately 35.4 percent of total revenue in the year, an increase of 3.7 percentage points over the previous year's 31.7 percent.
In comparison, voice revenue increased by only 2.9 percent during the quarter, from $234 million in Q4 2020 to $240 million in Q4 2021. The increase was fueled by a 2.9 percent increase in voice ARPU and a corresponding increase in voice usage per customer.
During the third quarter, the total consumer base increased by 0.5 percent to 42 million. Around 17.7 million were contributed by data. The slower growth rate was a result of the quarter-long suspension of SIM Registration. Airtel reported a 2.5 million active mobile customer loss as a result of the suspension.
However, the financial impact of the loss was negligible, as revenue growth continued as a result of the lost subscribers' significantly lower ARPU and increased usage by the active base.
Other revenues increased by 29.7 percent, primarily due to growth in VAS revenue, led by airtime credit services.
Airtel Africa Profit Doubles
Airtel's revenue increased by 15.4 percent in reported currency across Africa during the third quarter. According to the report, the telco generated $1.038 billion in revenue, up from $899 million a year ago.
Despite the growth, revenue was negatively impacted by currency devaluations, most notably in the Nigerian naira (10%), Zambian kwacha (34%), and Kenyan shilling (5%). (5.7 percent ). However, it was benefited by the Central African franc's appreciation (7.1 percent ).
Additionally, the revenue was boosted by a one-time extraordinary gain of $20 million related to a settlement in Niger.
Revenue growth resulted in a $154 million after-tax profit. This is more than double last year's total of $77 million. Profitability was primarily driven by a 6.9 percent increase in customer base to 118.2 million and a 7.7 percent increase in ARPU.
Underlying revenue growth was recorded in all regions during the quarter, with Nigeria growing by 12.0%, East Africa growing by 15.4%, and Francophone Africa growing by 20.9 percent.
All service segments experienced double-digit revenue growth, with voice increasing by 7.2 percent, data by 24.2 percent, and mobile money by 32.7 percent, all in reported currency.
Basic earnings per share were 9.0 cents, down from 10.3 cents the prior year, primarily due to a lower average share count (EPS impact of 0.5 cents), an increase in tax charges due to higher operating profits, and withholding tax on dividends by subsidiaries.
Mobile Services rakes in $955 million
According to an in-depth analysis of the segments, mobile services, which include both voice and data, increased 13.1 percent to $955 million in Q4 2020, up from $844 million in Q4 2019. The company attributed the increase to increased revenue from both voice and data.
Voice revenue contributed $547 million to the $955 million generated, growing by 7.2 percent during the quarter. Similarly, voice subscribers increased 6.9% to 118.2 million, while voice usage per customer increased 16.4% to 234 minutes.
Nigeria contributed $422 million, East Africa $358 million, and Francophone Africa $260 million across the regions.
While voice was the most significant contributor, data saw the most growth during the quarter. The business increased by 24.2% to $315 million. The growth was fueled by an increase in the number of data customers to 40.6 million and an increase in data usage.
“Data usage per customer per month was 2.6 GB, up 44.2% year on year, owing largely to our 4G network expansion and growing popularity of data bundle offerings,” the report states.
Nigeria contributed $152 million, East Africa contributed $92 million, and Francophone Africa contributed $70 million.
Mobile money
Mobile money remains one of Airtel Africa's fastest growing service segments, accounting for 10.6 percent of total revenue. Revenue increased 32.7 percent to $110 million from $83 million during the quarter.
Revenue growth was fueled by a 6% increase in average revenue per user to $1.7. Additionally, the increased contribution from merchant payments, cash transactions, peer-to-peer transfers, and mobile service recharge via Airtel Money aided.
East Africa has the highest number of mobile money users across all regions. The region generated approximately $79 million, a 36.4 percent increase over the previous year's $58 million. Francophone Africa is ranked second, with revenue increasing by 24.1 percent to $31 million in the third quarter.
Mastercard and Rise Invest in Airtel’s Mobile Money
Another significant finding in the report is MasterCard's and The Rise Fund's investment in Airtel's mobile money business. Airtel Africa has signed agreements with TPG's The Rise Fund and Mastercard to invest $200 million and $100 million, respectively, in its mobile money subsidiary, Airtel Mobile Commerce BV.
Airtel Africa's mobile money business is now valued at $2.65 billion on a cash and debt-free basis as a result of these transactions. Following the completion of the transactions, the new investors will each own a minority stake in AMC BV, with Airtel Africa retaining the remaining majority stake.
Along with the investment, the Group and Mastercard agreed to a new commercial framework and commercial arrangements spanning card issuance, payment gateway, payment processing, merchant acceptance, and remittance solutions.
Conclusion
Airtel stated that despite the surge in cases, Covid-19 had no adverse effect on the business during the quarter. Additionally, it stated that it is developing a sustainability framework to guide the development of a sustainable future.
According to the company, its first sustainability report will be published in 2022.
Courses and Certification
Internet Marketing Course and Certificate
Email Marketing Course and Certificate
Computer Networking Course and Certificate
Broadband Networks Course and Certificate
