In the first half of 2024, MTN Nigeria Communications Plc and Airtel Nigeria collectively generated an impressive revenue of approximately N3.67 trillion through their data and voice services, signifying robust growth in the telecommunications sector. MTN, leading the market with nearly 80 million subscribers, posted a revenue of N1.27 trillion, propelled primarily by a remarkable 55 percent surge in data service revenue, amounting to N726.6 billion compared to N469.7 billion in the same period of the previous year. Moreover, MTN’s voice services also reflected growth, with revenue increasing to N541.3 billion from N474.1 billion. This growth can be attributed to several factors, including enhanced service quality, growing demand for data, and strategic price optimization efforts introduced in the last quarter of 2023.
Airtel, which boasts a subscriber base exceeding 60 million, reported a revenue of $229 million for the quarter ending June 30, 2024. This is broken down into $112 million from voice services and $117 million from data services. However, while voice service revenue saw a significant decline of 55.8 percent from the previous year’s $254 million, it registered a notable increase of 21.6 percent in constant currency terms. Similarly, data revenue faced a drop of 48.6 percent from $228 million in the previous year, yet constant currency figures indicated a strong growth of 41.3 percent, reflecting a heightened demand for internet connectivity services. An analysis of Airtel’s financials over the full fiscal year ending March 31, 2024, revealed total voice revenue of $711 million and data revenue of $654 million, culminating in a total revenue of $1.594 billion.
When converted into naira using an exchange rate of N1500 to $1, Airtel’s revenue for the first half of 2024 reached N2.4 trillion. Thus, MTN’s N1.27 trillion combined with Airtel’s N2.4 trillion resulted in the total revenue generation of approximately N3.67 trillion for both companies across the six-month period. This achievement underscores their adept navigation of a rapidly evolving telecommunications landscape and their ability to capitalize on increasing demand for digital services within Nigeria’s burgeoning digital economy.
Despite their remarkable financial growth, both MTN Nigeria and Airtel Nigeria face substantial challenges primarily due to the depreciation of the naira against the dollar, which has significantly escalated operational costs. Both companies allocate a large portion of their revenues toward diesel consumption, as industry estimates suggest that telecom operators use over 50 million liters of diesel monthly to power their infrastructure. Notably, the rising costs of diesel have prompted both companies to explore renewable energy sources, including solar and wind energy, as part of their long-term sustainability strategies.
Airtel Nigeria’s Director of Corporate Communications and CSR, Femi Adeniran, reported that the company incurs about N28 billion in diesel costs each month. Additionally, insights from a senior telecom executive indicated that MTN faces even higher expenses, spending over N30 billion monthly to sustain its approximately 25,000 base stations nationwide. Collectively, MTN and Airtel are projected to have spent around N570 billion over the first eight months of 2024 due to escalating fuel prices, which averaged N1,426.09 per liter. This situation has placed a significant burden on their financial performance amid a challenging economic climate.
In the first half of 2024, MTN reported an after-tax loss of $519.1 billion, while Airtel faced an $89 million loss for the fiscal year ending March 2024. Despite these setbacks, Airtel managed to achieve a $31 million profit in the second quarter, despite being adversely affected by $80 million in derivative and foreign exchange losses. This resilience indicates the potential for recovery and sustained growth in the long term as both companies adjust their operational strategies in response to market dynamics and challenges. As they adapt to the realities of the telecommunications industry in Nigeria, MTN and Airtel will continue to play pivotal roles in shaping the digital landscape of the country while striving for sustainable financial health.
