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Airtel Nigeria Reports Revenue Loss of $110 Million Due to Devaluation of Naira, Barred SIM Cards

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Airtel Financial Results - Investors King

Telecommunications company Airtel Nigeria reported a loss of $110 million in revenue due to the devaluation of the Naira and barred SIM cards in the country as a result of mandatory NIN registration.

The telecoms company reported a loss of $82 million on the devaluation of Naira in the year under review. Also, due to the NIN registration requirement, Airtel reports that a total of 13.6 million customers were barred, out of which 6.4 million customers have subsequently submitted their NINs and 3.5 million customers have been fully verified and unbarred.

The barring of outgoing calls for customers who had not submitted their NINs had an adverse impact on voice revenue, the company revealed. Meanwhile, Voice revenue increased by 13.4 percent in constant currency, largely driven by customer base growth of 9.0 percent supported by voice ARPU growth of 0.9 percent.

The telecoms company via its financial statement disclosed that the losses occurred between March 2022 to March 2023.

Despite the loss, Airtel which operates in Nigeria, East Africa, and Francophone Africa reported revenue growth from 17.6 percent to $5.2bn (N2.39trn) by March 2023 from $4.71bn (N2.17trn) recorded in March 2022.

The growth was boosted by its Nigerian market which accounts for 40 percent of its total revenue for the year.

Airtel’s total voice revenue was $2.49 billion  (N1.14trn) out of which $1.053 billion (N485.16bn) was raised from the Nigerian market. Data revenue increased to $1.78 billion (N820.1bn) with the Nigerian market contributing $884 million (N407.3m) out of the whole.

Data revenue increased by 27.8 percent in constant currency, driven by both data customer base growth of 17.3 percent and data ARPU growth of 9.9 percent.

Airtel’s Nigerian operations maintained a positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $1,099 million, an 11.8% increase in constant currency.

However, Airtel’s profit from mall operations fell from $755m (N347.87bn) in March 2022 to $750m (N345.56bn) in March 2023.

Looking ahead, Airtel Africa cited long-term attractive opportunities despite currency devaluation, which it aims to mitigate, Investor King understands

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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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