MTN, Airtel’s profits jump as appetite for data consumption rises

Telecom giants, MTN Nigeria and Airtel are reaping more gains from data services as it is fast catching up with voice, which used to be the major revenue source for telecom operators.

For instance, in the 9 months that ended September 30, 2022, MTN Nigeria recorded a 4.4 per cent growth in voice revenue to N753.7 billion, whereas its data earnings jumped by 49.1 per cent to N549.6 billion.

Airtel also posted a 26.7 percent growth in data revenue compared with an 11.9 percent increase in voice revenue for its half-year that ended September 30, 2022.

According to the telecom operator, data usage per customer on its network reached 8.3 GB per month compared with 5.4 GB in the prior period, with 4G data usage contributing to 79.5 per cent of total data usage.

MTN and Airtel attributed the growth in data revenue to the rapid expansion of their 4G network across the country. With a faster 4G network as opposed to 3G, subscribers can stream high-quality videos and make video calls, which consume more data and prompt them to spend more.

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Explaining its data revenue growth, Airtel said: “The enhanced 4G network and ample data network capacity to provide high-speed data have helped us to grow our data customer base. As we continued our 4G network rollout, nearly all our sites in Nigeria (99 per cent) now deliver 4G.

The 4G data customer base increased by 20.3 percent with 45 percent of our total data customer base being 4G users, compared with 42.4 per cent in the prior period. Data usage per customer increased to 4.8 GB per month from 3.9 GB in the prior period of the second quarter of 23.

Reacting to the development, Chief Executive Officer of MTN Nigeria, Mr Karl Toriola attributed the jump to smartphone penetration in Nigeria which is driving data consumption and data revenue growth.

“The contribution of voice to total revenue has been coming down while the contribution of data has been going up. So, we will see their convergence soon. We expect that data will overtake voice at some point soon.

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“As of April 2017, voice contribution was 70 per cent, but today, it has gone down. Between the next 18 to 36 months, data will overtake voice in terms of revenue contribution and this will be driven by factors such as the increase in smartphone penetration and the uptake of 5G,” he said.

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MTN also pointed out that its data revenue growth was buoyed by “an aggressive 4G network expansion and enhanced quality and capacity of our network to support rising data traffic as we continue to drive the conversion of existing subscribers on the 3G network to 4G and drive smartphone penetration.”

Meanwhile, a telecom expert, Mr Adewale Adeoye highlighted some of the forces driving the data revenue growth for telecom operators.

“In the past, even though we knew that data revenue was growing, the whole amount of data revenue was low for the operators. But now it’s almost catching up with voice revenue. That tells you that sooner or later that data will catch up.

“In terms of lifestyle, many Nigerians are on Instagram, YouTube, Facebook, Whatsapp, Twitter, and so on, and through all these platforms they consume more and more data. There is a lot of online learning going on and people are doing a lot of video calls. All these will continue to push data revenue growth for the operators.”