Telecommunications operators in Nigeria are set to rake in more revenue this Christmas season as Nigerians increase the volume of calls and data usage.
Based on the past financial records of MTN and Airtel, two of the leading telcos in the country, increased subscriber spending in December has always positively impacted their Q4 revenue over the years.
Aside from an increase in calls to wish family and friends well, more data is usually consumed around this period by people sharing messages and videos via different platforms in commemoration of the season.
According to industry observers, the Christmas season gives subscribers more time to explore social media and watch videos that consume their data. And by doing this, many spend more on data than they usually do, without even knowing it.
Telcos’ Q4 revenues: For telecom operators in Nigeria, Q4 has always been a period of harvest in terms of revenue. For instance, a look at MTN Nigeria’s financials for the last 3 years shows consistent Q4 revenue growth.
- In Q4 2019, MTN’s revenue jumped by 8% from N288.9 billion recorded in the previous quarter to N313.2 billion. Similarly, in 2020, the telcos’ Q4 revenue increased by 10% to N370.6 billion compared with the N337.6 billion recorded in the preceding quarter of the same year. In Q4 2021, MTN’s revenue also grew by 8% from N414.9 billion in Q3 to N448 billion.
- Airtel Nigeria’s financial records also show a similar pattern of growth in the last quarter of every year, which happens to be its financial Q3. For the quarter that ended December 2019, Airtel posted $355 million in revenue showing an 8.5% growth over the $327 million it recorded in the preceding quarter. Airtel also ended 2020 with 9% revenue growth for the last quarter of the year at $412 million.
- Its results for the quarter that ended December 2021 also showed a 6% revenue growth to $476 million compared with the $450 million it recorded in the previous quarter.
The driving forces: According to the President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, there are many factors pushing telecom subscribers to spend more on calls and data every December. While noting that Nigerians like to talk a lot and felicitate with people over the phone, he said:
- “Aside from our penchant for talking and greeting people on the phone for Christmas, December is always a holiday period and this allows people to spend more time on social media, especially, a video platform like TikTok. These lead to an increase in the consumption of data. Again, a lot of people will want to appreciate their customers at the end of the year and they do this through social media either with Video or pictures.
- “Interestingly, this is also the time the telecom operators usually come up with one promo or the other, which encourages people to spend more. It’s a win-win for the subscribers and the telecom operators.”
- He, however, noted that the increased number of calls and messages during the Christmas period often leads to poor quality of service.
- “The problem is that this always affects the quality of service. When everybody is making calls, and sending messages at the same time, the quality of service becomes poor,” he said.
According to the Executive Secretary of the Association of Telecommunications Companies of Nigeria, Mr Ajibola Olude, aside from the social aspects of telecommunications services usage, productivity will continue to drive more revenue for the operators. He said:
- “If you go to any sector today, their growth, their productivity is driven by telecom services. For instance, hospitality, banking, and insurance. Telecoms is showing its ability to serve all the sectors of the economy. This growth will be sustained for years to come.”
4G/5G uptake: An IT expert, Mr Jude Okwonkwo, believes that the uptake of 4G and now 5G by the subscribers will continue to push up their spending. He said:
- “As more people embrace 4G, the rate at which they consume data increases because the speed is now faster and they spend more. During a festive period like this, you see many people making not just WhatsApp voice calls but video calls to connect with their relatives or friends that are far away. We all love to see people we have not seen for a long time due to the distance barrier, but technology has removed that barrier today as you can connect live through video calls, thanks to the 4G technology in the last few years and now 5G will make it even better.”
While only MTN Nigeria has so far rolled out 5G in Nigeria, all the telecom operators are currently expanding their 4G network to ensure that more Nigerians have access to faster internet service. As part of strategies to boost the company’s revenue this quarter, MTN’s Chief Executive Officer, Karl Toriola, recently disclosed that the telco would expand its 4G service to achieve 80% population coverage before the end of this year. He said the company would also deploy additional 362 5G sites, and bring 5G to more smartphones.
