• Friday, July 12, 2024
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Telcos reap rewards on huge infrastructure bet

Rising data revenues suggest that telecommunication firms are reaping the benefits of their significant investments in network infrastructure.

MTN Nigeria and Airtel Africa, the country’s two publicly traded mobile network providers, have seen a consistent increase in their service revenues over the years. This success comes after substantial investments. MTN invested N1.78 trillion in its network infrastructure between 2020 and 2023, while Airtel invested $1.14 billion during the same period.

These investments have resulted in a surge in their subscriber base, translating to more revenue. The focus was primarily on improving 4G and 5G coverage, which significantly increased data usage per customer.

Read also: Telcos reap rewards on huge infrastructure bet

Airtel Nigeria’s data revenues grew from N28.81 billion ($80 million at N360.06/$) as of the three months ended June 2019 to N151.15 billion ($116 million at N1,303/$) as of the quarter ended March 2024. Average data usage per customer also jumped from 1.63GB to 6.3 GB per month on Airtel. Similarly, MTN’s average data usage per customer rose to 10.1GB as of the end of Q1, 2024.

MTN reported its 4G network now covers 81.6 percent of the population as of Q1 2024, with 5G reaching 12.4 percent coverage in its Q1 2024 result. Airtel Nigeria boasts a nearly 100 percent 4G network presence across its sites.

Olusegun Ogunsanya, Chief executive officer of Airtel Africa, said, “Our continued investment in the network and expansion of 4G network infrastructure helped us grow both the data customer base and usage levels.”

“We achieved significant growth of 53.4 percent in data revenue, with data revenue surpassing voice. The increase in data was led by our improved data bundle offerings, our wide network coverage and enhanced capacity,” said Karl Toriola, chief executive officer of MTN Nigeria.

Read also: Streaming swells monthly internet spend to N216bn

Data from the NCC shows MTN Nigeria maintained its lead with a subscriber base that grew from 54.1 million in December 2019 to 81.7 million in March 2024.

Airtel Nigeria grew from 34.5 million subscribers in December 2019 to 63.3 million in March 2024. Smartphone penetration, the primary gateway to the internet for many Nigerians, has also grown tremendously/ MTN reports that smartphone penetration on its network is now at 55.2 percent.

The telecom sector is one of the pillars of the Nigerian economy, powering the country’s digital economy aspirations. In 2022, Umar Danbatta, former executive vice chairman of the Nigerian Communications Commission, said the sector has attracted $70 billion for investments.

According to GSMA, telecom operators in Nigeria and across Africa are expected to spend $75 billion on their networks, especially 4G, from 2023 to 2030. This move is primarily to meet the growing demand for internet services, improve service quality, and expand to unserved and underserved communities.

Nigeria’s monthly internet consumption has skyrocketed by over 500 percent since 2019. This growth has been fueled by the growing appetite for streaming services and other online activities. According to data from the NCC, monthly internet usage grew from 125,149.86 terabytes (TB) as of December 2019 to 753,388.77 TB as of March 2024.

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