Subscribers to mobile telecommunications services in Nigeria spent about N767.23bn on airtime purchase from November 2018 to January 2019, investigations have revealed.
This figure is based on the number of subscribers in the three months under review, which was obtained from the Nigerian Communications Commission, and the industry’s Average Revenue Per User provided by network operators.
In November 2018, the monthly subscriber data from NCC showed that there were 168.73 million active GSM subscribers from MTN, Globacom, Airtel and 9mobile.
In the following month, the data indicated that the number of active subscribers rose to 172. 63 million while in January 2019, the country had 173.63 million active GSM users.
With the telecommunications companies’ ARPU amounting to $4.87 (N1490.22) per month, Nigerians spent N251.44bn on airtime in November 2018. Based on the same estimated monthly revenue per user in the industry, expenses on airtime purchase increased by two per cent to reach N257.04bn in December 2018.
In January this year, about N258.74bn was expended by active Nigerian subscribers on airtime, giving a total of N767.23bn in the three months under review.
Sales of airtime remain the core revenue earner for telcos and generate income for operators via voice calls, SMS, data subscriptions and value-added services.
Nigerians purchase airtime through various platforms such as physical recharge card, the virtual top-up via USSD code, subscribers’ bank accounts domiciled on mobile devices, vending on web-based platforms and on Automated Teller Machines.
Despite predictions by analysts that voice and messaging revenue would decline due to the proliferation of instant messaging apps, revenue from airtime continue to rise.
A market research firm, Ovum, had predicted that there would be a drop in spending on traditional communication services offered by the incumbent telcos by 36 per cent in the next 10 years.
Ovum noted that services offerings of messaging apps were built on innovative business models and offered a much lower price than traditional telcos were offering.
However, the wide use of these messaging apps whose services are driven by data and strong Internet connection have encouraged the network providers to invest massively in broadband infrastructure and upgrade their Internet network across the country.
Airtel Nigeria in its 2018 third-quarter report stated that in the last one year, it had doubled its number of broadband base stations from 5,652 it had in December 2017 to 10,369 base stations as of December 2018.
The telco also reported $223m capital expenditure in Nigeria mainly for network upgrade and expansion.
Last year, MTN upped its capital investment when it secured N200bn medium-term loan from 12 Nigerian banks mainly to drive Internet expansion and rural telecoms devices.