Article Summary
- MTN’s data revenue for Q1 2023 inched closer to voice revenue as usage surged.
- This was driven largely by the company’s expansion of 5G and 4G networks across the country, pushing its customers to spend more on data.
- While data revenue increased by 40% in the quarter, voice revenue increased marginally by 7.3% in the same period.
A surge in data usage by MTN customers saw MTN’s data revenue inch closer to that of voice in Q1 2023. This pushed the company’s total revenue for the quarter to N568 billion, a 20.6% growth from N470.9 billion it recorded in the same period last year.
While voice has always been the main revenue driver for telecom operators in Nigeria, a 40% growth in data revenue for the first quarter saw the two nearly at par in Q1. Data revenue for MTN in the three months hit 227.8 billion, while voice revenue managed a 7.3% increase to hit N277.6 billion.
Pushed by 5G, 4G expansion
The rise in data revenue is attributable to MTN’s rollout of 5G late last year and the expansion of its 4G network, which drive an increase in data consumption at a higher speed. MTN Nigeria CEO, Karl Toriola confirmed this in his comments on the Q1 financial statement.
- “Active data subscribers rose by 1.7 million, benefitting from our efforts to drive data conversion in new and existing subscribers. During the quarter, we focused on enhancing the capacity and coverage of our 4G and 5G networks, which supported rising data traffic.
- “Our total data traffic increased by 50.3%, while 4G traffic constitutes 81.6% (up by 5.5pp). In addition, we rolled out additional 170 5G sites in Q1, bringing the population coverage to 4% and expanding the network experience to more smartphone users,” he said.
Toriola added that the 40.0% increase n data revenue was because of the sustained growth in the company’s active data users and increased data usage.
“This was enabled by our sustained investment in our networks to drive 4G and 5G coverage and enhance the quality and capacity of the network to support the rising data traffic. As a result, our 4G network now covers 79.3% of the population, up from 79.1% in December 2022, and data usage (GB per user) grew by 31.3% to 7.8GB.
“In addition, we added over 804k new smartphones to our network in Q1, bringing smartphone penetration to 52.7%. We continued to advance our home broadband penetration by adding 169k users in Q1, bringing our user base to 1.4 million. This was supported by deploying our 5G fixed wireless access devices, mobile broadband solutions and fiber-to-the-home connectivity,” he said.
Data to overtake Voice soon
Late last year, the MTN had predicted that with the rate at which its data revenue was growing, it would soon overtake voice as the main revenue source for the telecom operator.
- “The contribution of voice to total revenue has been decreasing while the contribution of data has been increasing. So, we will see their convergence soon. We expect that data will overtake voice at some point in the near future. As of April 2017, voice contribution was 70%, but today, it has gone down. Between the next 18 to 36 months, data will overtake voice in terms of revenue contribution and this will be driven by factors such as the increase in smartphone penetration and the uptake of 5G,” Toriola said during a media interaction last November.
Data revenue surpassed voice for the major Telcos since last year.