Home Latest Insights | News MTN Nigeria Records 59% Increase in Internet Data Revenue in Q1

MTN Nigeria Records 59% Increase in Internet Data Revenue in Q1

MTN Nigeria Records 59% Increase in Internet Data Revenue in Q1

Internet services in Nigeria saw an increase following over a month lockdown that confined businesses to virtual space. The development resulted in a revenue surge for telcos and internet data service providers, as many companies went digital to stay in business.

MTN Nigeria is among the top gainers with a double-digit surge in data revenue in the first quarter of 2020.

Nigeria recorded its first case of novel coronavirus in February, and in March, the federal government put the Federal Capital Territory (FCT), Lagos and Ogun States on lockdown to prevent further spread of the outbreak. Many companies resorted to remote work as a result, depending on virtual platforms to perform day-to-day tasks.

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With a staggering 68.5 million subscribers, MTN took the lion share in revenue generated through data services. Data revenue makes up 22.6% of service revenue (N328.5bn), growing 59.2% year-on-year in the quarter, and 12.3% from Q4 2019. The growth in data traffic was spurred by 1.7 million active data users and increased 4G users to stand at +130.4% year-on-year in the first quarter of 2020. Additional 4.2 million subscribers were added within the period to up the voice revenue by 7.4%.

There was a notable increase in digital revenue as well as fintech. Services like MoMo recorded significant increases as the number of its network agents jumped from 108,000 to 178,000 nationwide.

Airtime vending yielded 80% of over 5.6 million transactions processed by MoMo agents.

EBITDA grew 15.3% to N173.5bn with EBITDA margin moderating by 0.6% points to 52.7%.

Profit before tax rose 8.9% to N76.3 billion and profit for the Q1 has an increase of 5.6% to stand at N51.146bn.

Year on year, fintech recorded an increase up to 36.1% due to Xtratime, its airtime lending service.

MTN Nigeria’s CEO, Ferdi Moolman, said the gains had scaled some hurdles which included the VAT increase from 5% to 7.5%, and exchange rate adjustments that resulted in increase in the cost and charges for services. The lockdown also disrupted supply chain and affected the operational services, and induced extra cost to service delivery.

The telco giant noted that while there is growth in data services, there has been a significant drop in voice calls due to the number of businesses affected by COVID-19 lockdown; that has drastically reduced the purchase power of many subscribers.

Government imposed restrictions especially on movement has apparently immobilized business growth in the telecommunication sector, affecting the growth projection of every player in the sector. But MTN said it is strategizing to beat the challenges by rolling out measures to minimize the impact of the disruption. The telco said it is upgrading the capacity of its network to have a wider coverage and also diversifying funding strategies to have a free flow of cash and approved loan facility to meet its financial obligations.

It is expected that after May 4 there will be an increase in voice communication following the ease of the lockdown. Many businesses will resume and commercial activities will return to spur patronage for airtime and voice calls. However, the number of people who will continue to work remotely will remain high as companies aim to cut costs, and that will require efficient data service from telcos.

The Chief Executive Officer, Internet Exchange Point of Nigeria (IXPN), a center point for local traffic exchange between network operators and Internet Protocol Providers, Muhammadu Rudman, said there has been a significant surge in internet usage recently, which requires upgrade of capacity by the service providers.

“We noticed an increase in traffic and we are trying to encourage our members to upgrade their ports. For Lagos in particular, we have seen an increase today. We started noticing an increase like a week ago, about 10 percent increase in traffic. As more people start learning online, we expect the traffic to be much higher,” he said.

The federal government has approved e-learning platforms for primary and secondary learning as schools remain under lock, despite the ease of the lockdown. Tertiary institutions are working to resume school activities online too, meaning there will be further increase in internet usage.

Given that subscribers will go with the telcom with better service, MTN Nigeria stands a chance to further increase its revenue if it upgrades its capacity to accommodate the anticipated surge.

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1 THOUGHT ON MTN Nigeria Records 59% Increase in Internet Data Revenue in Q1

  1. Still less than $1B, coming from a company which is perhaps the poster child of the ‘boom season’, according to our taxman. A data subscription base put at 1.7 million, out of 68 million subscribers, and we are not alarmed? Let’s not even analyse how the data subscription was consumed, because it’s likely to be depressing too.

    If MTN Nigeria is posting these figures, and we think they are great, it then means that we have a hopeless situation in other sectors of the economy. The best of the pack couldn’t post $1B in three months, think about it!

    This country is grossly underperforming in all facets of its economy, and bunch of uniformed Nigerians still have time to envy any entity here? Nothing is happening in this economy yet, if we want to be objective here.

    We want best hospitals, best schools, world-class transportation infrastructures, abundance of energy, and one of biggest corporations in the land is posting these figures as quarterly earnings? We joke a lot in this country.

    I am not encouraged by these earnings, not good enough!

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