MTN and Airtel Generate N367tn Amid Surging Demand for Data and Airtime

2025-02-04

In the first half of 2024, MTN Nigeria and Airtel Nigeria collectively earned approximately N3.67 trillion from their voice and data services. This impressive figure reflects the significant rise in demand for digital services in the country. While MTN recorded strong growth driven by its data services, Airtel faced challenges but still managed to achieve notable revenue. The growing digital economy in Nigeria has been the key catalyst for this surge in demand, despite the hurdles telecom operators face with rising operational costs, particularly due to the fluctuating naira and escalating diesel prices.

Summary:

MTN Nigeria recorded a total revenue of N1.27 trillion in the first half of 2024, driven by data service growth. Revenue from data increased by 55%, amounting to N726.6 billion. Voice services also grew by 14%, reaching N541.3 billion.
Airtel Nigeria, with over 60 million subscribers, reported revenue of $229 million for the quarter ending June 30, 2024, including $117 million from data services. Data revenue showed a 41.3% increase in constant currency terms despite a 48.6% drop in USD.
Combined, both companies earned around N3.67 trillion, with Airtel contributing N2.4 trillion and MTN N1.27 trillion. This represents the growing demand for telecom services in Nigeria.
Despite their financial success, both companies face rising costs due to the weakening naira and expensive diesel, pushing them to explore renewable energy alternatives to reduce operational expenses.
Industry experts highlight the continuing need for telecom tariff hikes amid the escalating operational challenges.
The Nigerian Communications Commission (NCC) has introduced new guidelines to improve customer service at telecom companies, aiming to reduce wait times at service centers.

What Undercode Says:

The remarkable financial success of MTN and Airtel in the first half of 2024 clearly illustrates the rising demand for digital services in Nigeria. While MTN’s dominance in the sector, with over 80 million subscribers, allowed it to lead the revenue chart, Airtel has proven its resilience with consistent growth despite facing challenges in currency fluctuations and operational costs.

Growth Driven by Data Services

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However, it’s important to note that Airtel’s voice revenue experienced a drastic drop. This 55.8% decline in voice revenue highlights a significant shift in how Nigerian consumers engage with telecom services. As mobile data becomes more integral to daily life, the demand for traditional voice services is diminishing. Despite this, Airtel still managed to maintain solid data revenue growth in constant currency terms, underscoring the resilience of data services in the Nigerian market.

Telecoms in a High-Cost Environment

Despite these impressive numbers, both MTN and Airtel are grappling with rising operational costs. The weakened naira and rising diesel prices have been major contributing factors to the higher cost of doing business. Experts estimate that telecom companies are consuming over 50 million liters of diesel per month to power their networks, a significant drain on their finances.

This economic pressure has driven both companies to invest in renewable energy sources like solar power and wind energy. This pivot towards sustainable energy solutions is not only cost-effective in the long run but also aligns with global trends toward reducing reliance on fossil fuels. However, the financial pressures remain, and telecom companies must balance maintaining growth with controlling operational expenses.

The Role of Regulatory Bodies

The Nigerian Communications Commission (NCC) has introduced new guidelines aimed at improving customer service. Telecom providers are now required to attend to customers within 30 minutes at service centers. These efforts are part of a broader strategy to improve the customer experience in an increasingly competitive market. As Nigeria’s digital economy grows, customer service has become a crucial differentiator in the telecom sector.

However, this new directive could place further strain on telecom companies already dealing with cost inflation. As they push for tariff hikes, telecom companies like MTN and Airtel must find ways to maintain profitability while keeping customers satisfied.

Tariff Hikes and Market Response

The growing demand for digital services, coupled with rising costs, has led telecom companies to call for tariff hikes. This issue remains contentious, as consumers continue to resist price increases. The National Association of Telecommunications Subscribers (NATCOMS) has consistently pushed back against the price hikes, citing the economic hardship faced by ordinary Nigerians.

The telecom companies argue that these hikes are necessary to maintain service quality and to cover the rising operational costs. However, the balancing act between profitability and customer retention will be a challenge, especially in a country where economic conditions are volatile and customer loyalty is low.

In conclusion, while the telecom giants in Nigeria continue to thrive amidst a rapidly expanding digital landscape, their success is not without challenges. The need for sustainable energy solutions, strategic pricing models, and regulatory adherence will play a pivotal role in their continued growth. These companies must navigate rising costs, evolving consumer needs, and regulatory pressures while maintaining their market position.

References:

Reported By: https://www.legit.ng/business-economy/technology/1619058-mtn-airtel-rake-n367tn-nigerians-demand-data-airtime-soars-6-months/
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