A big change came to Nigeria’s stock market this weekend. Airtel Africa has dethroned Dangote Cement as the most capitalized company listed on the Nigerian Stock Exchange, a big move that highlights the growth of the Nigerian telecom sector.
Airtel Africa, like Dangote Cement, is a member of the SWOOT (Stocks Worth Over One Trillion). Since 2021, the second-largest telco in Nigeria has made big moves geared at boosting its growth. These include divestment to payment service with SMARTCASH Payment Service Bank Limited and approval in principle by the Central Bank of Nigeria for Airtel Commerce Nigeria Limited’s super-agent license.
Supported by covid-induced shift to digital life, which ensured stable growth for the telecom industry at the peak of the pandemic, these moves by Airtel are believed to have spurred its leap at NSE, beating other telcos to it.
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Airtel Africa crossed the N5 trillion mark on Friday as the stock gained 9.9% to close at N5.4 trillion, marking the first time any Nigerian company has surpassed N5 trillion in Market Capitalization.
Per Nairametrics, the new development came as a result of up and down stock movements for both Airtel Africa and Dangote Cement. Airtel Africa first surpassed Dangote Cement as the most capitalized stock on Thursday after it gained 10% closing at N1,271. Dangote Cement in contrast fell on Thursday by 8.53% from its 52-week high of N284.90 to close the trading session at N260.60, on profit-taking by investors. This saw Dangote’s market capitalization fall by N414.1 billion, from N4.86 trillion to N4.44 trillion. It remained flat on Friday, January 28.
Whereas Airtel on Friday gained another 9.9% taking its share price to N1,390 as it continued its bullish run. Airtel’s share price has now gained over 46% this year on the back of improved operational performance, share buybacks, and investor sentiments, according to Nairametrics.
Nigeria’s telecom industry has remained the best performing sector of the economy despite the SIM registration policy that has hampered its growth, cutting off millions of telecom subscribers. As of October 2021, the telecom industry has lost 9.6% internet subscribers, representing 14.5 million in one year, according to data from Nigerian Communication Commission.
The drop is as a result of the federal government’s directive to telcos to halt sales and activation of SIMs, which took effect from December 2020. Although the government lifted the ban on sales and activation of SIMs in April last year, it mandated the use of National Identification Numbers (NINs) for new SIMs’ registration. That has also impacted the number of telecom subscribers in Nigeria as many potential subscribers are yet to get their NIN.
For internet subscription, MTN recorded the biggest loss of 7.5 million subscribers, representing a drop from N65.76 million in November 2020 to N58.32 million in October 2021. Airtel was also hardly hit, recording a N4.6 million drop in internet users. Subscribers dropped from 41.52 million in November last year to 36.89 million in October 2021.
The Twitter ban which took effect in June last year and lasted until January 2022, was also blamed for the drop in internet usage in Nigeria.