Airtel Africa Plc has posted a revenue growth of 21.9% in its Nigeria business to stand at $1.55 billion in 2020, with 23.5% growth in East Africa, and 10% in Francophone Africa. The telco reported an increase of 14.2% in its gross revenue in its 2020 earnings.

This was disclosed in the telco’s year ended March 30 earnings, which was released on Wednesday.

Highlights of the result

• Revenue from voice was up by 11%, data revenue grew by 31.2% and mobile money was up 35.5% in 2020.
• Reported revenue grew by 14.2% to $3.91 billion in 2020, while Q4 2020 revenue stood at $1.04 billion, indicating a 15.4% increase (year-on-year).
• Constant currency underlying revenue growth was 19.4%, with Q4 2020 growth of 21.7%.
• Growth was recorded across all regions: Nigeria up 21.9%, East Africa up 23.5%, and Francophone Africa up 10%; and across key services, with revenues for voice up 11.0%, data up 31.2%, and mobile money up 35.5%.
• Underlying EBITDA was $1.79 billion, up by 18.3% in reported currency, and 25.2% in constant currency.
• The underlying EBITDA margin was 46.1%, adding 181 basis points (210 basis points higher in constant currency). The underlying EBITDA margin for the quarter ended March 2021 was 47.7%, an increase of 389 basis points in constant currency.
• Operating profit increased by 24.2% to $1.12 billion in reported currency, and 32.8% in constant currency.
• Free cash flow was $647 million, up by 42.8% from the prior year.
• Basic EPS was 9.0 cents, down by 12.6%, largely due to last year’s exceptional items and a one-off derivative gain. Excluding these, basic restated EPS rose 44.5%. EPS before exceptional items was 8.2 cents.
• The telco’s customer base grew by 6.9% to 118.2 million, with increased penetration across mobile data (customer base up 14.5%) and mobile money services (customer base up 18.5%). The recent slowdown in customer base growth has been due to new SIM registration regulations in Nigeria.
• The Board recommended a final dividend of 2.5 cents per share, making the total dividend for the year to be 4.0 cents per share.

What Airtel is saying

Chief Executive Officer, Airtel Africa Plc, Raghunath Mandava, said, “In these challenging times, I want to say a huge thank you to all our employees, our business partners, and governments and regulators who have supported us, and in turn facilitated our continued support to the economies and communities we serve.

Our performance has been strong, with reported growth of 13.6% in underlying revenue and 18.3% in underlying EBITDA, and constant currency growth of 19.4% and 25.2% respectively.”

Nigeria’s largest telecoms network, MTN posted revenue of N385.3 billion representing a 17% increase from the N329.1 billion reported in the same period in 2020.

The double-digit growth is happening at a time when Nigerians have put the Covid-19 lockdown behind them and returned fully to work across the country. It is also happening on the back of tumultuous three months of SIM card registration bans and government mandates for all Nigerians to register to obtain their NIN and link the numbers to their SIM Cards.

MTN reported an 8% growth in Voice related revenue topping N208 billion for the period under review. Data revenue continued to lead revenue growth printing at N105.7 billion, a 42.6% growth year on year, showing heavy reliance on data by MTN’s 61.5 million internet subscribers, the highest in the country.

MTN commands the market share for internet subscriptions owning about 42% of the market. MTN also controls 40% of the Voice market share, the highest compared to any other competitor.

READ: Banks, MTN reach agreement, restore suspended USSD services

Commenting on the result, MTN’s CEO, Karl Toriola explained that “the effects of customer churn and the restrictions on new SIM sales and activations arising from changes in SIM registration regulations” had resulted in a decline of its subscriber base. This reduction led to a marginal drop of 71,000 in Q1 active data subscribers to 32.5 million but this did not affect growth. Rather they recorded an 86.7% increase in data traffic and a 48.5% increase in usage (MB per user) from the existing base.

Toriola explained that “the improvement in data services was supported by the completion of our acquisition and activation of an additional 800MHz spectrum” enabled the company to further increase traffic by 10% and enhance throughput by 79%.

MTN also doubled its revenue from Digital business rising to N3.7 billion during the quarter while FinTech related revenue rose 28.5% to N14.6 billion.

“Digital revenue grew by 101.0% and fintech revenue by 28.5% as customers continued to adopt more digital products and services, a trend accelerated by the pandemic. As of the end of March 2021, we had 449,100 registered MoMo agents and 4.6 million fintech customers.”

MTN also revealed it was being owed N40.3 billion by deposit money banks (DMBs) on services provided for under its USSD product. MTN did not recognize any revenue for its USSD business resulting in a flat year-on-year revenue for its enterprise business.

What next for MTN?

The GSM behemoth maintains it will continue to pursue double-digit revenue growth in 2021 through its 4G network expansion and positioning its FinTech Business for “accelerated growth” to unlock its full potential.

MTN also revealed it will continue to push for a revised commission paid to banks on its air time sales and is exploring other options of selling its airtime outside of banks.

“We will continue to sustain our expense efficiency programme to strengthen our financial position and support margins. We remain in dialogue with the DMBs on a pricing option for airtime sales commission while diversifying our airtime recharge channels to offer our subscribers more options to purchase airtime and stay connected.”