Airtel Nigeria has reported a significant decline in data revenue, recording $344 million for the nine months ending December 31, 2024. This marks a sharp drop from the $539 million generated in the same period the previous year. Despite a 37.2% increase in data usage per customer—rising to 8.4 gigabytes (GB) per month from 6.2GB—the telecom giant struggled to translate the higher demand into increased revenue, according to its financial report analyzed on Tuesday.
Subscriber Growth and Tariff Adjustments
With a subscriber base of 56.6 million, Airtel Nigeria remains the country’s second-largest telecom operator. In response to the revenue challenges, the company recently implemented a data tariff hike, following the Nigerian Communications Commission’s (NCC) approval of a 50% industry-wide tariff adjustment. This move aligns Airtel with competitors like MTN, which also raised prices for calls and data services.
Airtel’s Chief Executive Officer, Dinesh Balsingh, emphasized the necessity of the price increase, stating that it is crucial for the survival and growth of the industry. “The price increase will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers,” Balsingh said in a statement shared earlier this year.
Financial Performance and Challenges
Despite the revenue decline, Airtel’s financial performance has been supported by strong demand for mobile data. The company reported a 31.4% increase in average revenue per user (ARPU) and an 8.2% rise in the number of data customers. Data revenue surged by 44.3% in constant currency, driven by growth in both data customers and ARPU.
However, the depreciation of the naira has negatively impacted Airtel’s reported revenue. The new tariff structure is expected to stabilize earnings in the coming quarters, providing relief to the company’s financial outlook.
Rising Data Consumption
Smartphone users are consuming more data than ever, with average monthly usage climbing to 11.2GB, up from 8.8GB in the previous period. This trend reflects the growing reliance on mobile data for communication, entertainment, and business activities.
Industry-Wide Struggles
Nigerian telecom operators have faced significant financial challenges due to an 11-year delay in tariff adjustments. The prolonged price stagnation has resulted in a projected $11.3 billion revenue shortfall between 2022 and 2026, driven by the naira’s depreciation and rising operational costs.
Outlook
Airtel Nigeria remains optimistic about its future performance, anticipating that the recent tariff adjustments will drive revenue recovery in the coming months. The company’s focus on expanding network infrastructure and improving service delivery is expected to strengthen its position in the competitive telecom market.
As the industry navigates economic challenges, Airtel’s ability to adapt to changing market dynamics and customer needs will be critical to its long-term success.
