The history of telecommunication began with the use of smoke signals and drums in Africa, Asia, and the Americas. In the 1790s, the first fixed semaphore systems emerged in Europe. However, it was not until the 1830s that electrical telecommunication systems started to appear.
The COVID-19 pandemic drove the higher demand for internet access which scaled up data consumption. People transitioned to working from home, use of zoom meetings ahead of physical meetings and virtual events began to thrive. Hence, there was a need for more data consumption by network users.
While 2022 came with macroeconomic challenges which ranged from inflation, foreign exchange volatility, and supply chain disruptions among others. Network service providers ride on the need for data to thrive on these macroeconomic challenges.
Airtel Nigeria’s data customer base grew to 22 million in December 2022, up 15.8 percent from 19 million in December 2021.
“In reported currency, Airtel Nigeria’s revenue grew by 15.6 percent to $1,585 million and 20.9 percent in constant currency. Strong growth in both voice and data contributed to revenue growth, driven mainly by overall customer base growth of 13.0 percent and data customer base growth of 16.0 percent.
The annual financial results for Airtel Africa revealed data customer base subscribers grew to 51.3 million in the nine months period ended December 2022, a 13.7 percent increase from 45.1 million in the nine months period ended December 2021.
MTN Nigeria reported an increase in data subscribers to 39.5 million in the full year of 2022, up 15 percent from 34.3 million in the full year of 2021.
“Data revenue rose by 46.9 percent on the sustained growth of our active data users and increased data usage. This was supported by our 4G network expansion drive and enhanced quality and capacity of the network to support the rising data traffic. Our 4G network now covers 79.1 percent of the population, up from 70.3 percent in December 2021,” MTN Nigeria said in a note.
MTN Nigeria added that “Data traffic rose by 66.6 percent, of which 79.5 percent was carried on the 4G network. Usage (MB per user) grew by 47.4 percent. In addition, we added over 5.5 million new smartphones to our network in 2022, bringing smartphone penetration to 52.4 percent.
Airtel Nigeria
Airtel Nigeria’s revenue grew to $1.58 billion in the nine months period ended December 2022, up 15.3 percent from $1.37 billion in December 2021.
Data revenue to $653 million in December 2022, 21 percent year-on-year increase from $539 million in the nine months period ended December 2021.
Airtel Nigeria’s voice revenue to $791 million in December 2022, a 10.3 percent increase from $717 million in December 2021.
According to Airtel, voice revenue increased by 15.4 percent in constant currency, largely driven by customer base growth of 13.0 percent supported by voice average revenue per user growth of 2.2 percent.
“The barring of outgoing calls for customers who had not submitted their NINs had an adverse impact on voice revenue,” Airtel said.
Airtel said “a total of 13.6 million customers was originally barred, out of which 6.2 million customers (46%) have subsequently submitted their
NINs and 3.2 million customers (23%) have been fully verified and unbarred.
“We estimate that this resulted in the loss of approximately $87m of revenues in the nine-month period ended 31 December 2022, providing a drag on revenue growth of 6.4 percent in Nigeria.
Revenue for Airtel Africa surged to $3.91 billion in the nine months period that ended December 2022, a 12.1 percent increase from $3.49 billion in the same period of 2021. In constant currency, revenue growth was at 17.3 percent.
Airtel Africa said in a note that revenue growth in constant currency was 17.3 percent driven by double-digit growth across all reporting segments.
“Mobile Services revenue in Nigeria grew by 20.9 percent, in East Africa by 11.9 percent, and in Francophone Africa by 11.8 percent (and across the Group by 15.9 percent, with voice revenue growth of 12.7 percent and data revenue up 22.3%).
Airtel Africa said, “Capex increased 5.8 percent to $457 million, in line with our guidance, as we continue to invest for future growth. Additionally, we acquired spectrum in Nigeria, DRC, Tanzania, Zambia, and Kenya over the nine-month period.
“Operating free cash flow was $1,459 million, up by 14.9 percent, as higher EBITDA more than offset increased capital expenditure. Capital expenditure during the period was higher by $25m related to planned network expansion and investment in PSB opportunities in Nigeria.
Airtel Africa’s reported currency revenue grew by 12.1 percent, with constant currency revenue growth of 17.3 percent partially offset by currency devaluation.
“Revenue growth was impacted by the effect of some voice customers being barred in Nigeria and the loss of tower-sharing revenues following the sale of towers in Tanzania, Madagascar, and Malawi in H2’22. Excluding these, the growth would have been around 20.6 percent in constant currency.” It said.
“Net finance costs increased by $228 million largely due to higher foreign exchange and derivative losses of $184m mainly comprised of a 40 million loss on derivatives and higher foreign exchange losses arose from the restatement of balance sheet liabilities (a loss of $70 million on devaluation of the Nigerian Naira, and other devaluation losses of $53m mainly arising from the Malawian Kwacha, Ugandan, and Kenyan shilling).
On 9 January 2023, it was announced that Airtel Networks Limited (‘Airtel Nigeria’), had purchased 100 MHz of spectrum in the 3500MHz band and 2x5MHz of 2600MHz from the Nigerian Communications Commission (NCC) for a gross consideration of $316.7 million paid in local currency.
“This additional spectrum will support our investments in network expansion for both mobile data and fixed wireless home broadband capability, including 5G rollout, providing significant capacity to accommodate our continued strong data growth in the country and exceptional customer experience,” Airtel said.
Airtel stated that ”the penetration of data customers in Nigeria remains low, providing significant opportunity for future growth. The acquisition of 5G spectrum will underpin our growth strategy by enabling the launch of higher-speed connectivity to enhance customer service and accelerate digitalisation for consumers, enterprises, and the public sector.
“The key benefits of 5G will include higher speeds, lower latency, significant network capacity as well as an improved user experience. Furthermore, the deployment of 5G will accelerate the availability and efficiency of fixed wireless access products across the country, contributing towards Airtel Nigeria’s progress in meeting the National Broadband Plan targets,” Airtel said.
MTN Nigeria
MTN Nigeria, in its audited results for the financial year ended 31 December 2022 reported total revenue of N2.01 trillion, up 22 percent from N1.65 trillion in December 2021.
Data revenue grew to N764.82 billion in December 2022, up 47 percent from N520.54 billion in December 2021.
“Data revenue rose by 46.9 percent on the sustained growth of our active data users and increased data usage. This was supported by our 4G network expansion drive and enhanced quality and capacity of the network to support the rising data traffic,” MTN Nigeria said.
MTN Nigeria added that “active data subscribers grew by 5.2 million and benefitted from our efforts to drive data conversion in new and existing subscribers. We accelerated the coverage and capacity of our 4G network in response to the rising data traffic, bringing 4G population coverage to 79.1 percent (up by 8.7pp).”
Karl Toriola, CEO of MTN Nigeria said, “2022 was challenging due to global macroeconomic and geopolitical volatility, resulting in higher inflation, supply chain uncertainties, foreign exchange volatility, and availability.
“In Nigeria, Inflation reached a 17-year high of 21.5 percent in November before moderating slightly to 21.3 percent in December, bringing the average for the year to 18.8 percent and putting pressure on consumer spending.
“To curb rising inflation, the Central Bank of Nigeria increased interest rates four times in 2022, bringing the Monetary Policy Rate to 16.5 percent – up by five pp during the year. This was further raised by 1pp in January 2023 to 17.5 percent,” Toriola said.
MTN Nigeria said “Following the commercial launch of our 5G network, we deployed 5G routers, delivering higher speeds and lower latency and creating experiences that position MTN as the broadband service provider of choice. “
Voice revenue increased to N1.03 trillion in December 2022, up 6 percent from N970.84 billion in the similar period of 2021.
MTN noted that “voice revenue maintained a steady recovery as more customers were reactivated and gross connections ramped up. This was backed by our customer value management initiatives through which we managed churn and drove increased usage from the existing base.
“As a result, voice revenue rose by 6.8 percent, bucking the slower growth trend of general voice traffic as data traffic continues to increase,” It said.
According to MTN Nigeria, capital expenditure was N504.3 billion, up 23.5 percent, due to an acceleration in coverage expansion focusing on the 4G and 5G networks and our rural telephony program.
“We deployed 9,027 4G sites, 588 5G sites and 778 rural sites. 4G accounted for approximately 76 percent of the total sites deployed during the year. Core Capex, excluding the right-of-use assets, increased by 18.6 percent to N361.0 billion, slightly above plan to enable us to capture growth
Opportunities,” MTN said.
MTN Nigeria noted that “our accelerated Capex investments allowed us to capture growth opportunities in the data space while mitigating foreign exchange and supply chain disruption risks and the impact of rising inflation.”
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