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Airtel Grows Customer Base by 9.7% to 134.7 Million in H1 2022

Airtel Africa continued to expand across key areas as the total customer base grew by 9.7% to 134.7 million in the first half ended September 30, 2022.

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Airtel Africa Plc - Investors King

Airtel Africa continued to expand across key areas as the total customer base grew by 9.7% to 134.7 million in the first half ended September 30, 2022. Airtel’s financial year starts in April of every year.

Customers of mobile data and mobile money services were up by 10.6% and 24%, respectively.

In the company’s half-year result obtained by Investors King, mobile money transaction value rose to $86.1 billion, a 31.7% year-on-year increase.

Revenue grew by 12.9% in the first half to $2,565m. The second quarter accounted for 12.7% of the increase. Constant currency growth rate accelerated to 18.5% in the second quarter to bolster growth to 16.9% in the period under review.

The telecom giant recorded strong revenue growth in constant currency across its four reporting segments. In Nigeria, mobile services revenue grew by 19.7% while in East Africa it increased by 12.4% and 12.1% in Francophone Africa.

Across the Group, revenue rose 15.6%, with voice revenue expanding by 12.0% and data revenue up by 22.1%. Mobile Money revenue appreciated by 29.5%, largely driven by 31.5% growth recorded in East Africa and 23.6% in Francophone Africa.

Profit after tax was $330m, a 1.5% decline due to higher foreign exchange and derivative losses of $160m. Profit after tax, excluding foreign exchange and derivative losses, was up by 30.4%

Capital expenditure increased by 26.9% to $310m, in line with our guidance, as we continue to invest for future growth. Additionally, we acquired spectrum in key markets including DRC and Kenya.

Commenting on the company’s performance, Segun Ogunsanya, chief executive officer, said “Airtel Africa continued to deliver strong results as its purpose of transforming the lives of people across sub-Saharan Africa through digital and financial inclusion gained further momentum, with growth accelerating in the second quarter.

“Whilst we are not immune to the current macro-economic challenges and currency devaluation risks, I am pleased to report double-digit reported revenue growth in the period, largely driven by customer growth of 9.7% and ARPU growth of 7.2%, as we increased penetration and usage through our affordable service offerings. Our cost-efficiency initiatives combined with improving growth trends have also helped offset inflationary pressures on our cost base and expand our EBITDA margin by 38bps in constant currency.

“We continue to de-risk our balance sheet and have further reduced HoldCo debt with the early repayment of $450m of bond in July.

“We continue to invest for growth and have increased capital expenditure by 27% over the period, alongside a substantial investment into additional spectrum across several markets. Following the receipt of the Payment Service Bank and Super-Agent licence in Nigeria during the period, we have launched our mobile money operations.

“We are excited about the opportunity in our biggest market and will continue to build trust and confidence in the brand, whilst investing in distribution to increase access to financial services for underserved communities within the country.

“Today we have also published our inaugural sustainability report. The report provides a detailed review of our sustainability strategy that underpins our corporate purpose and sets out our achievements to date and our focus for the future.

“Overall these results continue to demonstrate the effectiveness of our strategy, sound execution, and the resilience of our business despite the uncertain macro-economic environment. For the remainder of the financial year, we anticipate sustained growth in the business, alongside EBITDA margin resilience.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Telecommunications

NCC Files Copyright Infringement Charges Against MTN Nigeria and Others

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Karl O Toriola - Investorsking.com

The Nigerian Copyright Commission (NCC) has taken legal action against MTN Nigeria Communications Ltd. and four individuals, including its Chief Executive Officer, Karl Toriola, over alleged copyright infringement.

The charges, filed in the Federal High Court, Abuja Division, revolve around the unauthorized use of musical works belonging to artist Maleke Idowu Moye.

According to the NCC, the defendants are accused of offering for sale, selling, and trading musical works of Maleke without his consent between 2010 and 2017. These works were allegedly used as Caller Ring Back Tunes without proper authorization.

The musical pieces in question include popular tracks such as “911,” “Minimini-wanawana,” and “Stop racism,” among others.

The commission further alleges that the defendants distributed these musical works to subscribers without authorization, infringing upon the rights of the artist.

The charges are based on provisions of the Copyright Act, Cap. C28, Laws of the Federation of Nigeria, 2004.

As the case awaits assignment to a judge and a fixed date for mention, it marks a significant development in the ongoing efforts to uphold copyright protection in Nigeria’s telecommunications sector.

This legal action underscores the NCC’s commitment to safeguarding the intellectual property rights of artists and creators within the country.

MTN Nigeria, a major player in the telecommunications industry, now faces a legal battle that could have broader implications for how intellectual property rights are respected and enforced within Nigeria’s digital landscape.

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Telecommunications

MTN’s MoMo Sees 32.2% Surge in Transaction Volumes

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MTN Nigeria - Investors King

MTN Group’s mobile money platform, MoMo, has experienced a 32.2% surge in transaction volumes.

With 72.5 million active users, MoMo continues to solidify its position as a leading fintech service provider in Africa, tapping into the continent’s burgeoning mobile banking sector.

The company’s success underscores the growing trend of Africa’s young and tech-savvy population embracing mobile technology to address financial needs.

Mobile phones are increasingly becoming a tool for bridging gaps in services, particularly in banking, presenting a lucrative opportunity for wireless carriers like MTN to capitalize on the burgeoning fintech market.

MTN’s achievement comes as it finalizes a deal with Mastercard Inc., valuing its fintech business at an impressive $5.2 billion.

This strategic partnership further enhances MTN’s position in the digital finance space, positioning it for continued growth and innovation.

However, MTN is not alone in its fintech endeavors. Rivals such as Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd. are also making strides in digital transformation, with plans to separate and monetize their fintech businesses in the long term.

Airtel Africa, for instance, is reportedly considering an IPO for its mobile money unit, indicating the high stakes and intense competition within the sector.

Despite the remarkable success in its fintech ventures, MTN faced challenges in its core telecommunications business, with service revenue growth slowing to 6.8%.

Inflation and currency devaluation in key markets, particularly Nigeria, impacted profitability, highlighting the complexities of operating in diverse African markets.

As MTN continues to expand its fintech footprint and invest in infrastructure to enhance connectivity across the continent, it remains poised to capitalize on the immense potential of Africa’s digital economy.

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Telecommunications

Telecom Operators Grapple with Rising Diesel Costs, Spending Hits N50.28 Billion

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Telecommunications - Investors King

As diesel prices continue to soar, Nigeria’s telecom operators are facing mounting challenges with expenditure on fuel hitting N50.28 billion in February.

This represents a 50.20 percent increase from the N33.48 billion spent in the same period last year, reflecting the growing financial burden imposed by escalating fuel costs on the sector.

Diesel serves as a critical component in powering telecom infrastructure, including base stations, which heavily rely on generators due to the country’s unreliable grid electricity.

Industry estimates suggest that operators consume an average of 40 million liters of diesel per month to sustain telecom sites, with prices reaching N1,257.06 per liter in February 2024.

The reliance on diesel for powering essential infrastructure has become increasingly unsustainable, threatening the sector’s operational viability.

Gbenga Adebayo, president of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), emphasized the adverse impact of diesel costs on the industry’s sustainability, noting that infrastructure companies bear the brunt of these expenses.

Adebayo highlighted the urgent need for new pricing regimes to address the widening gap between production costs and current telecom service prices.

While investments in alternative energy sources such as solar power present opportunities for mitigating diesel reliance, challenges such as intermittent supply and vulnerability to theft underscore the complexity of the situation.

The escalating diesel costs have prompted telecom operators to advocate for adjustments in service pricing to ensure the sector’s long-term viability.

As the industry grapples with these challenges, stakeholders are calling for collaborative efforts to address the root causes of the rising fuel expenses and safeguard Nigeria’s telecom infrastructure.

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