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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.”

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Telecommunications

Nokia and African Telecommunications Union (ATU) to Speed up Digital Transformation and the Knowledge Economy in Africa

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Nokia - Investors King

Collaboration to leverage the power of ICT including 5G for Industry 4.0 (IR 4.0), connecting the unconnected and transforming lives; Both organizations reiterate commitment to shape policy, develop talent, and promote inclusion and diversity in Africa.

Nokia has signed a Memorandum of Understanding (MoU) with the African Telecommunications Union (ATU) to drive digital transformation and the knowledge economy for socio-economic development across the continent. The two parties will leverage the power of telecommunications, including 5G networks, to connect the unconnected and identify innovative use cases, as well as business models. In addition, the MoU will lay ground for both organizations to better help governments shape telecom policy, develop talent and promote inclusion and diversity. This includes women, as well as the underprivileged in both rural and urban areas.

The MoU was signed in Nairobi, Kenya, by John OMO, Secretary General at ATU and Rajiv Aggarwal, Nokia Representative and Head of Central, East and West Africa Market Unit at Nokia.

Announcing the partnership, Rajiv Aggarwal, Head of Central, East and West Africa Market Unit at Nokia, said: “We remain keen on supporting Africa’s digital transformation journey and by collaborating with the ATU, we strengthen this commitment. We will leverage our global technology expertise and insights on policy matters to positively impact the universal socio-economic development in the continent.”

Co-signing the MoU with Mr. Rajiv, John OMO, Secretary General of the African Telecommunications Union (ATU), said: “Our vision is to make Africa a full and active participant in the global information and knowledge society by enabling universal access to ICT systems and services across Africa. Collaboration with a global industry leader such as Nokia is therefore crucial in this regard and will help us accelerate towards a digital transformation and knowledge economy.”

The MoU framework is guided by six tenets designed to facilitate this acceleration. These are:

  • Sharing of best practices on telecom technology trends and developments
  • Identification of innovative industrial use cases toward the Fourth Industrial Revolution
  • Recommendation on implementation of emerging technologies and business models
  • Promotion of connecting the unconnected with broadband
  • Development of emerging talent for digital innovation
  • Promotion of inclusion and diversity

Nokia has a long history of collaboration with international organizations and bodies across the globe. Regionally in MEA, Nokia recently partnered with UN Women to promote inclusion and diversity in Middle East and Africa. Nokia is also working with UNICEF as part of a shared-value partnership in Kenya to connect schools with broadband and empower children in rural as well as disadvantaged urban areas. In November 2020, Nokia supported the Forge Academy in South-Africa with the launch of a fully inclusive artificial intelligence (AI) laboratory to help students to become entrepreneurs in the Fourth Industrial Revolution and the global digital economy.

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Broadband Penetration in Need of a Leg-up – Coronation Merchant Bank

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Broadband Penetration - Investors King

Digital technologies can promote growth in an economy partly due to their capacity to reduce costs and improve the quality of delivery. However, to achieve this, highspeed and reliable internet and broadband are required. The latest data released by the Nigerian Communications Commission (NCC), the industry regulator, show that internet subscriptions stood at 139.4 million in July, representing a y/y decline of -5%. Furthermore, we noticed a m/m decline of c.431,000 in subscriptions.

The decline in subscriptions can be partly attributed to the temporary suspension of SIM card sales to ensure the achievement of the National Identification Number (NIN) registration exercise. Additionally, based on our channel checks, the stress associated with the NIN-SIM linkage has resulted in customers abandoning SIMs of devices that are not their primary source for communication or internet connectivity.

MTN Nigeria (MTNN) accounted for the largest share (42%) of total subscriptions though down -1.0% m/m in July ‘21. Airtel (-0.5%) and Glo (-0.9%) also recorded m/m decreases.

Over the past year, there has been a visible shift to fibre broadband internet plans which do not necessarily need SIM cards to function. We note that some residential estates are increasingly using this service given the heavy reliance on internet services at home due to the newly adopted work-from-home approach.

In November ‘19, President Buhari launched the National Digital Economy Policy and Strategy. The strategy is hinged on eight critical pillars. One of the critical pillars is developing a solid infrastructure by deploying fixed and mobile broadband infrastructure to deepen broadband penetration and drive an inclusive and vibrant digital economy.

Similarly, in September ‘21, the FGN approved the national policy for the fifth-generation (5G) network to boost the country’s digital economy. The national broadband plan set a target for the country to attain 70% broadband penetration at a price of N390 per 1GB of data (i.e. 1.3% of minimum wage).

The latest national accounts show that Information and Communications Technology sector grew by 5.6% y/y and contributed 17.9% to the total GDP in Q2 ’21. This is slightly higher than its contributions in Q2 ’20 (17.8%) and Q1 ’21 (14.9%). It also showed that telecommunications grew by 5.9% y/y in Q2 ‘21 compared with 7.7% in Q1 ‘21 and 18.1% in Q2 ‘20.

We note that investments into the sector have declined steadily. Capital importation into the telecommunications sector declined by 138.2% from USD944.1m in ’14 to USD417.5m in ’20. This can be linked to the infrastructure deficit in the telecommunications sector, the high cost of services and access devices, low digital literacy, poor perception of broadband value, among others.

Clear policy and regulatory guidance are fundamental to the optimal distribution and uptake of broadband services. The evolving work conditions, travel restrictions due to covid-19, the rise of e-commerce, and integration of technology in daily activities show that the rollout of broadband services has the potential to address various socio-economic challenges, grow the economy and create jobs.

Industry sources suggest that a 10% increase in broadband penetration can increase the GDP of an economy by 1.8 – 2.0%

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Telecommunications

Foreigners to Activate SIMs Every Six Months, Says NCC

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sim card - Investors King

Foreigners exempted from enrolling for the National Identity Number will have to request for Subscriber Identity Module activation every six months up to a period of two years.

The Nigerian Communications Commission disclosed this in its new draft for ‘Business Rules and Operational Processes for Implementation of the National Policy for SIM activation, Replacement and Other Key Telecommunications Operational Processes.

The report said, “SIM activations for foreigners exempted from enrolling for NIN shall be configured for a period of six months in the first instance and can be renewed further upon request and where the visa is not for a stay of two years and above.”

It added, “Foreigners validly transiting through Nigeria or are employed in or reside in Nigeria for less than 24 months are exempted from the mandatory use of NIN requirement. Persons in this category need to provide justification that they will be residing in Nigeria for less than two years.”

It said if such foreigner failed to request for SIM activation at the end of the six-month period, the SIM would be deactivated.

For foreigners staying in the country for more than two years, it is required for them to register for NIN as well as fully register their SIMs.

“NIN is mandatory for foreigners with legal residency status or those living in Nigeria for two years and above. For those who do not already have a NIN, mobile network operators shall capture the resident’s details for NIN issuance as part of the NIN enrolment process, upon presentation of resident’s permits,” it stated.

The Punch had earlier reported that foreigners not staying in Nigeria for up to two years do not need a NIN to register SIM cards, according to the Revised National Identity Policy for SIM Card Registration.

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