Data drives Airtel Nigeria’s quarterly revenue to $422m despite slow subscriber growth

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Airtel Nigeria Apologises to Subscribers Following Complaints on Prolonged Service Outage

Airtel’s telecom business in Nigeria is booming. According to the report released by Airtel Africa PLC, the company’s revenue in the country rose by 12% to $422 million for the quarter ended March. The telco recorded $377M during the same quarter last year.

The growth was driven by data revenue which rose by 26.4% from $120M to $152M. This accounted for about 35.4% of total revenue in the year, up 3.7 percentage points from 31.7% in the prior year.

The annual revenue spent on Data by Airtel Subscribers in Nigeria increased by 15.3% as data consumption rose from 1.9 GB per month to 3.2 GB per month.

In comparison, voice revenue only grew 2.9% from $234M in Q4 2020 to $240M during the quarter. The growth was driven by voice ARPU growth of 2.9% and supported by an increase in voice usage per customer.

Airtel Africa Suffers More Losses on the LSE Despite Recent Listing Among 101-350th Largest Companies

The total consumer base increased by 0.5% to 42 million during the quarter. Data contributed about 17.7 million. The reduced growth was due to the suspension of SIM Registration for the quarter. Airtel reported that the suspension led to a loss of 2.5 million active mobile customers.

However, the financial impact of the loss was minimal as revenue growth continued due to the significantly lower ARPU of the lost subscribers and increased usage by the active base.

Other revenues grew by 29.7%, with the main contribution coming from growth in VAS revenue led by airtime credit services.

https://technext.ng/2020/11/06/airtel-plans-to-sell-off-4500-towers-across-5-african-countries-to-offset-3-5bn-debt/

Airtel Africa Profit Doubles

Across Africa, Airtel’s revenue increased by 15.4% in reported currency during the quarter. The report shows that the telco generated a total of $1.038 billion up from the $899 million recorded a year ago.

Despite the growth, the revenue was affected by currency devaluations, mainly in the Nigerian naira (10%), Zambian kwacha (34%) and Kenyan shilling (5.7%). However, it was in turn positively affected by the appreciation in the Central African franc (7.1%).

Foreign exchange had an adverse impact of $171m on revenue. On a 12-month basis, the company estimate that a 1% Nigerian naira devaluation will have a negative $14m impact on revenue, $8m on underlying EBITDA and $6m on finance costs.

The revenue also benefitted from a one-time exceptional gain of $20 million relating to a settlement in Niger.

The growth in revenue resulted in a net profit of $154 million after-tax. This is more than double the $77 million recorded last year. The profit was primarily driven by a combination of 6.9% customer base growth to 118.2 million, and 7.7% ARPU growth.

A breakdown shows that underlying revenue growth was recorded across all regions; Nigeria growing by 12.0%, East Africa by 15.4% and Francophone Africa by 20.9% during the quarter.

Double-digit revenue growth was also achieved across all service segments with voice growing 7.2%, data 24.2% and mobile money 32.7%, all in reported currency.

Data revenue contribution reached 29.8% of total Group revenue, up from 27.2% in the prior year.

Basic EPS was 9.0 cents, lower than the 10.3 cents from the prior year, largely a result of the lower number of average shares in the previous period (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

An in-depth analysis of the segments shows that mobile services, including both Voice and Data, grew 13.1% to $955M from $844M in Q4 2020. The company attributed the increase to the growth in both voice and data revenue.

Of the $955M generated, voice revenue contributed $547M after growing by 7.2% during the quarter. Similarly, voice subscribers increased 6.9% to 118.2 million and voice usage per customer increased 16.4% to 234 minutes per customer.

Across the regions, Nigeria contributed $422M, East Africa $358M and Francophone Africa $260 million.

The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.

While voice contributed the most, Data saw the most growth during the quarter. The business grew 24.2 % to $315 million. The growth was driven by an increase in the data customer base to 40.6 million and data usage growth.

“Data usage per customer per month was 2.6 GB, up 44.2% year on year, largely driven by our 4G network expansion and increasingly popular data bundle offerings,” the report says.

Across the regions, Nigeria contributed $152M, East Africa $92M and Francophone Africa $70 million.

The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and The Seychelles.

Mobile money

Mobile money continues to be one of the fastest-growing service segments of Airtel Africa, accounting for 10.6% of total revenue. The segment saw revenue growth of 32.7% to $110M from $83M during the quarter.

The growth in revenue was driven by the 6% increase in average revenue per user to $1.7. The higher contribution from merchant payments, cash transactions, P2P transfers and mobile services recharge through Airtel Money also helped.

Customer base growth was largely driven by the expansion of our distribution network, as mobile money agents by 30.7%, kiosks by 68.8% and mobile money branches by 95%

Airtel

Across regions, East Africa has the largest mobile money users. The region generated about $79 million up 36.4% from $58 million. Francophone Africa comes second, after growing 24.1% to $31 million during the quarter.

Mastercard and Rise Invest in Airtel’s Mobile Money

Another major highlight of the report is the investment of MasterCard and The Rise Fund in Airtel’s mobile money business. Airtel Africa has signed agreements with both TPG’s The Rise Fund and Mastercard who will invest $200m and $100m respectively into Airtel Mobile Commerce BV which handles its mobile money operations.

These transactions value Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis. The new investors will each hold a minority stake in AMC BV upon completion of the transactions, with Airtel Africa continuing to hold the remaining majority stake

Airtel Africa aims to explore the potential listing of the mobile money business within four years

Alongside the investment, the Group and Mastercard also signed a new commercial framework agreement and commercial arrangements across card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions.

Summary

Airtel revealed that Covid-19 had no adverse impact on the business during the quarter despite the surge in cases. It added that it’s working on a sustainability framework to drive the creation of a sustainable future.

The company says it will release its first sustainability report in 2022.

https://technext.ng/2021/02/02/mobile-money-contributed-10-of-2-87bn-revenue-generated-by-airtel-africa-in-2020/


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