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Power Tussle; MTN Airtime Sales Resume as Nigerian Govt Intervenes in Bank Feud

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MTN Nigeria - Investors King

MTN resumed airtime sales on banking channels Sunday after banks lifted a ban on the telco following an intervention by the Nigerian government.

Nigerian banks on Friday barred the Johannesburg-based firm from using their USSD platform to conduct business as both sides scuffled over airtime sales fees.

The three-day-long feud started after MTN, which has the biggest share of Nigeria’s telecoms market, reduced the rate it pays banks for each transaction from 4.5 per cent to 2.5 per cent.

The lenders removed the telecom giant from their platforms, disallowing MTN users from accessing their bank accounts to recharge their phones.

As subscribers expressed their frustration, MTN advised them to seek alternative ways of recharging. On Saturday, the firm announced alternative channels for its airtime sales, including a host of fintech platforms led by Flutterwave.

Service resumed Sunday afternoon after MTN agreed to revert to “status quo” at the request of the Minister of Communications, the Nigerian Communications Commission and the Central Bank of Nigeria while a permanent solution is being worked out, the news media gathered.

“The CBN Governor’s intervention is in line with our core values. We acceded to his request and that of our Minister. We will continue to live our values that ‘everyone deserves the benefits of a modern connected life’,” Carl Toriola, MTN Nigeria chief executive, said Sunday.

The telco told PREMIUM TIMES its firm’s pursuit has always found motivation in leveraging business to the fullest in the interest of customers and the Nigerian market.

“MTN’s intention has always been geared towards business optimization to the benefit of our customers and indeed the country,” Mr Toriola said.

“This is evidenced by the fact that through the USSD imbroglio, we never denied access to our customers. In the current case, customers have been denied access to services by the banks despite having monies in their accounts to purchase those services. MTN will naturally do all it can to minimise customer pain. It is not just about revenue for us. The good of our customers influence every decision we take.”

The Banks had said earlier that they were responding to check MTN’s “excesses”.

However, a source said, “the truth is that if MTN gets away with this, banks should expect further reduction if not checked. Over 60 per cent of airtime vending by telcos today are done electronically through the banks.” 

They argued that the percentage MTN pays is lower than that of other telcos, but MTN insiders, who also requested to speak anonymously, defended the network’s decision.

“We did a commission optimization which saw the banks commission reducing from an average of 3.5% to 2.5%. This reduction is standard because the volumes compensate for the reduction,” MTN source said.

“We reviewed our commissions downwards. Most of the banks are not connected to us directly but through a third party – our convenience channel partners and aggregators.

“Communication was shared with the partners who in turn wrote to the banks (the banks here are agents to the partner). Our contract with the partners allows us to do this;

“The channels were blocked yesterday midnight leaving our customers stranded. Interesting that the bank MDs met and quickly took a decision. This references our conversation around NCC standing in the gap for the industry. Subscribers to telecommunications are being denied services by the banks even when they have money in their accounts;

“Zenith Bank is connected directly to MTN – their earnings is at 2.70%. They are happy and have not blocked us;

“Banks on ‘MTN On Demand’ had an uplift in their commission from 2.0% to 2.75% yet have blocked services;

“Banks with direct connection to us through ‘MTN On Demand’ got a commission uplift.” The source explained.

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Telecommunications

NCC Sets Fresh Operational Fees, Spectrum Prices For Telecommunications Operators

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Nigerian Communications Commission

The Nigerian Communications Commission (NCC) has set up an annual operating regulatory levy to ensure that all licenses were properly and equitably assessed to meet statutory and regulatory expectations.

This was disclosed by the Executive Vice-Chairman of the NCC, Professor Umar Danbatta, during the Public Inquiry on two regulatory instruments draft held on Thursday, in Abuja.

Danbatta explained that the two key regulatory instruments were tailored to meet the challenges and to further strengthen the market structure of the industry.

The instruments include the Annual Operating Regulations and the Frequency Spectrum Regulations, which fees and pricing fall under.

He said “The first instrument will bring the regulations in line with current realities and sustain the enviable contributions of the communications sector to the country’s Gross Domestic Product (GDP)

“The second instrument is a vehicle that enables the commission to meet its role and exclusive mandate in Section 121 of the Nigerian Communications Act 2003 by assigning this scarce national resource in an equitable manner. The regulations also ensure that frequency spectrum are assigned and managed in a way that ensures fair pricing and efficient deployment of attendant services. The public inquiry is precursor to the commission’s current drive to ensure efficiency in spectrum management and unveiling of next-generation services through varied enablers.”

Deploying 5G
The NCC Boss informed that the Commission had commenced the process of deploying Fifth Generation (5G) technology in Nigeria, which largely depended on the appropriate frequency spectrum.

With the explosion in technologies, Danbatta said there was also an attendant secondary reliance on different approaches to maximize frequency spectrum.

He noted that this led to the need for designation of several bands of frequency spectrum for communications services and a key illustration was the recent identification of some Spectrum frequencies for 5G deployment.

Professor Danbatta assured that the Commission was conscious of the expectations and the need to ensure that the required regulatory frameworks were in place to meet these challenges.

He noted that this had made the reviews, which the Commission was conducting an important milestone as the public inquiry is pushing the country to the front queue of this global efforts.

“We must be prepared on both ends of the industry to push the country forward for these remarkable changes; while the licensees continue to invest in deployment. The Commission will sustain its drive-by ensuring regulatory efficiency and excellence,” the NCC Boss restated

He expressed optimism that the review would ensure effective and efficient utilization of frequency spectrum and also ensure a fair approach to the management of finance in the industry in the near future.

Danbatta urged participants to make their contributions freely and raise issues that would assist the Commission in developing and issuing regulatory instruments that would continually contribute to the development of the industry and sustain its positive contributions to the nation’s economy.

Earlier, in her address, the Director, Legal and Regulatory Services of the Commission, Ms. Josephine Amuwa, said the objective of the public inquiry was to secure the buy-in of all stakeholders and ensure the efficiency of the regulatory instruments when implemented.

She explained that the Commission decided to review the Annual Operating Regulations 2014 and the Frequency Pricing Regulations 2004 to ensure that the regulatory instruments issued were abreast with developments in the industry.

According to Amuwa, the Annual Operating Levy Regulations review will look at the current licensing structure and ensure that all the spectra of licensees will be properly covered.

“Another key part of the review is to clarify and clearly outline the benchmarks for assessment. This will not only ensure regulatory certainty but further entrench transparency in the process. On the other hand, the review of the second regulation, the Frequency Spectrum (Fees and Pricing) Regulations is expected to provide more guidelines on the parameter for determination of proper fees and pricing of spectrum. This will also make adequate provisions for different spectrum licensing processes and their assessment parameters,” she explained.

Present at the event were the Executive Commissioner, Technical Standards, Engineer Ubale Maska, the Executive Commissioner Stakeholder Management, Mr. Adeleke Adewolu, Directors, Deputy and Assistant Directors as well as External Stakeholders.

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Airtel Africa Customer Base Rises by 8.4 Percent to 120.8 Million in Q1, 2022

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Airtel Africa Plc - Investors King

Airtel Africa Plc, a leading telecommunications company in Africa, grew its customer base by 8.4 percent to 120.8 million in the first quarter (Q1) of 2022.

The telecoms giant recorded strong revenue in Nigeria, up by 38.2 percent and posted 32.8 percent in East Africa while it achieved 24.9 percent in Francophone Africa.

Airtel Africa’s first quarter begins from April to June of the current year and the year ended in the first quarter of the following year. Hence, why it is quoted Q1 2022.

Airtel Africa Q1 Highlights

 Q1’22 Reported revenue grew by 30.7% to $1,112m, with constant currency growth of 33.1%. Revenue growth partially benefitted from a weakened quarter in the prior year during the peak of Covid-19 restrictions across the region. Even after adjusting for these effects, revenue growth rates for the Group, service segments and reporting regions were all ahead of Q4’21 trends.
 Strong revenue growth was recorded across all regions: Nigeria up 38.2%, East Africa up 32.8% and Francophone Africa up 24.9%; and across key services, with revenues for voice up 26.0%, data up 37.4% and mobile money up 53.7%.
 Underlying EBITDA grew by 42.4% to $534m in reported currency, while constant currency growth was 46.2%.
 Underlying EBITDA margin was 48.0%, an increase of 396 basis points(increase of 428 basis points in constant currency) led by both revenue growth and improved operational efficiencies.
 Operating profit was $352m, up 67.6% in reported currency and 73.9% in constant currency.
 Profit after tax more than doubled to $142m, up 148.7%, largely due to the higher operating profits along with stable net finance costs which more than offset the increase in tax charges due to increased profits.
 Basic EPS was 3.3 cents, an increase of 200%, as a result of higher profit and stable finance costs and foreign exchange. EPS before exceptional items was 3.2 cents.
 Operating free cash flow (underlying EBITDA less capex) was $428m, up 38.7%.
 Customer base grew by 8.4% to 120.8 million, with increased penetration across mobile data (customer base up 14.8%) and mobile money services (customer base up 24.6%). The slowdown in customer base growth was due to new SIM registration regulationsin Nigeria; excluding Nigeria the customer base grew by 15.9%.

Commenting on the company’s performance, Raghunath Mandava, chief executive officer, said “Our Q1’22 results have been very strong, with reported growth of 30.7% in revenue and 42.4% in underlying EBITDA, with constant currency growth of 33.1% and 46.2% respectively. Q1 of last year was impacted by the start of Covid, but even after adjusting for these effects, our Q1’22 revenue growth rates for the Group, service segments and reporting regions were all ahead of Q4’21 trends.

We have posted strong double-digit growth across voice (26.0%), data (37.4%) and mobile money (53.7%), and across all our regions. Sub-Saharan Africa is now experiencing a third wave of the pandemic. Governments are implementing balanced measures of lockdowns and restrictions. But vaccinations levelsremain very low. In these challenging times our business model has so far proven resilient, but we continue to monitor the situation closely for the potential impact on local economies and consumers.

Our total customer base has returned to growth with acceleration in our East Africa and Francophone regions and despite continuing negative net additions in Nigeria. With the easing of these restrictions in late April we have since been able to gradually increase locations for activations in line with regulatory compliance across Nigeria, and we have begun adding new customers.

Our continued focus on modernisation and rollout of our network, along with simplifying our products and improving our distribution, have all helped us to make handsome gains on our ARPUs across voice, data and mobile money. Our robust operating model and solid execution should enable us to continue our profitable growth.

We continue to see huge potential across voice, data and mobile money due to the low penetration levels in Africa, as we continue to partner the nations in bridging the digital divide and enhancing financial inclusion. We remain committed to continue to efficiently and effectively deliver services that help to improve the lives, communities and economies we serve.”

 

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Telecommunications

Airtel Africa to Release Half-Year Financial Statement on Thursday, July 29, 2021

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Airtel Africa - Investors King

Airtel Africa on Thursday announced it will release financial statements for the period ended 30 June 2021 on Thursday 29, July 2021.

The leading telecommunications company disclosed in a statement issued by Simon O’Hara, Group Company Secretary, Airtel Africa Plc.

The company also stated that the “management will host a conference call for analysts and investors at 12:00pm UK time (BST), on Thursday 29 July 2021. To receive an invitation with the dial in numbers to participate in the conference call please register before the event using the following link:

https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=544
5815&linkSecurityString=914c16fb6

Airtel Africa is leading telecommunications and mobile money services listed on the London Stock Exchange and the Nigerian Exchange Limited. It has presence in 14 African countries.

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