MTN, Airtel Record N3.67 Trillion Revenue Despite Naira Challenges

MTN Nigeria Communications Plc and Airtel Nigeria, two of the country’s leading telecom operators, collectively generated an impressive N3.67 trillion from their data and voice services in the first half of 2024.

This substantial revenue underscores the growing demand for telecommunication services in Nigeria as the country’s digital economy continues to expand at a rapid pace.

The financial results, analyzed from the reports of both companies, reflect how these telecom giants have capitalized on this demand, while also navigating the challenges posed by economic fluctuations, especially the depreciation of the naira against the U.S. dollar.
MTN Nigeria, the largest telecom operator in the country, boasting nearly 80 million subscribers, reported remarkable earnings of N1.27 trillion in the first six months of 2024 alone. This surge in revenue was primarily driven by an increasing demand for data services.

According to the company’s financial report, data services contributed a staggering N726.6 billion to the overall earnings, representing a 55 percent increase compared to the N469.7 billion generated during the same period in 2023.
Voice services also showed positive growth for MTN Nigeria, as revenue from voice services rose to N541.3 billion, compared to N474.1 billion recorded in the first half of 2023.

This steady rise in voice service earnings highlights that despite the growing reliance on data services, traditional voice calls remain an essential part of the company’s revenue stream.
MTN attributed its impressive financial performance to several key factors. One major contributor was the improved quality of its services, which helped attract more customers and boost usage.

Additionally, the company implemented price optimization strategies in late 2023, which contributed to the increased revenue. By fine-tuning its pricing structure, MTN was able to capture more value from its subscribers, particularly as data consumption surged across the country.
Meanwhile, Airtel Nigeria, which serves over 60 million subscribers, also posted solid financial results for the first half of 2024. For the quarter ending June 30, 2024, Airtel reported $229 million in revenue, with $112 million coming from voice services and $117 million from data services.

However, when compared to the same period in 2023, there were relevant changes in the company’s earnings.
In terms of voice services, Airtel experienced a sharp decline in revenue, as earnings dropped by 55.8 percent from $254 million in the second quarter of 2023 to $112 million in the same period of 2024.

Nevertheless, when adjusted for constant currency, Airtel’s voice revenue actually showed a 21.6 percent growth.

This constant currency adjustment highlights the impact of currency fluctuations, particularly the devaluation of the naira, on the company’s reported financial performance.
Data services at Airtel Nigeria also faced a decline in reported revenue, falling by 48.6 percent from $228 million in the second quarter of 2023 to $117 million in 2024.

However, similar to voice services, data revenue increased by 41.3 percent in constant currency terms, reflecting the strong demand for internet services, which has been driven by the ongoing shift toward digitalization in Nigeria.
For the fiscal year ending March 31, 2024, Airtel recorded $711 million in voice revenue and $654 million in data revenue, bringing its total revenue for the year to $1.594 billion.

When converted to naira using the exchange rate of N1500 to $1, Airtel Nigeria generated an impressive N2.4 trillion in the first six months of 2024.
When combined, the total revenue generated by both MTN and Airtel from data and voice services in the first half of 2024 amounted to approximately N3.67 trillion.

This figure highlights the dominance of these two companies in Nigeria’s telecom sector and their ability to capture the market share in a rapidly growing digital economy.
Both MTN and Airtel have benefited from Nigeria’s increasing demand for digital services, as the country’s population embraces digital communication tools, streaming services, e-commerce, and online education.

As internet penetration continues to grow, and more businesses and individuals rely on mobile data for their day-to-day activities, telecom operators are well-positioned to maintain their revenue growth.
However, despite their success, both companies are facing considerable challenges, particularly due to the devaluation of the naira.

The declining value of the local currency has inflated operational costs for telecom operators, especially in areas where they rely on imported equipment and infrastructure.

A major operational expense for both MTN and Airtel is energy. The companies collectively consume over 50 million liters of diesel every month to power their telecommunications infrastructure across Nigeria.

This reliance on diesel, coupled with rising fuel costs, has put pressure on their profit margins.
In response to these challenges, both telecom operators have started to explore alternative energy sources as part of a long-term strategy to reduce operational expenses and minimize their environmental footprint.

By investing in clean energy solutions, such as solar power, they aim to cut their reliance on diesel and reduce the financial burden associated with fuel consumption.

Shifting to more sustainable energy sources will not only help them manage costs but also contribute to broader environmental goals.
In conclusion, MTN Nigeria and Airtel Nigeria have demonstrated their resilience and adaptability in a challenging economic environment, generating substantial revenue from data and voice services in the first half of 2024.

As Nigeria’s digital economy continues to expand, both companies are well-positioned to capture future growth opportunities.

However, they must also navigate the economic headwinds, particularly currency devaluation and rising operational costs, as they work to maintain their strong market presence.