Airtel Nigeria, a prominent telecom operator in the country, has reported a significant surge in data consumption on its network during the second quarter of 2023. The company’s strategic focus on expanding 4G coverage has led to impressive data usage figures among both 4G and non-4G users. As a result, Airtel Nigeria’s data revenue witnessed a substantial increase, contributing to overall revenue growth. However, the devaluation of the Nigerian naira had an impact on the company’s foreign exchange position. Let’s delve deeper into the financial report and understand the key factors driving Airtel Nigeria’s recent performance.
1. Soaring Data Consumption Fuels Revenue Growth
Airtel Nigeria’s financial report for the quarter ended June 2023 revealed a remarkable surge in data consumption by its customers. On average, 4G users increased their monthly data usage to 10.7GB, marking an impressive 44.4% increase compared to the same period last year. Non-4G users also contributed to the rise in data consumption, with their monthly usage growing to 5.7GB, a 24.5% increase from last year.
This surge in data consumption significantly boosted Airtel Nigeria’s data revenue for Q1 2024, reaching $228 million (approximately N176.7 billion). This is a notable improvement compared to the data revenue of $210 million (N162.7 billion) recorded during the same period in the previous year.
2. 4G Network Expansion Drives Data Revenue Growth
Airtel Nigeria attributed the surge in data consumption and revenue growth to its continued expansion of the 4G network. Currently, nearly 100% of all Airtel Nigeria sites deliver 4G coverage. Notably, 48.5% of the company’s data customer base are now 4G users, contributing to a substantial 84.0% of total data usage.
As a result of the expanded 4G coverage, 4G data usage per customer reached an impressive 10.7GB per month. This reflects a remarkable 44.4% increase from the 7.4GB per customer per month recorded in the same quarter of the previous year.
3. Revenue Growth and Forex Impact
Airtel Nigeria’s total revenue for the period experienced a remarkable 23% growth in constant currency, amounting to $528 million. This growth was driven by a 4.8% increase in the customer base and a substantial 16.1% growth in Average Revenue Per User (ARPU), mainly fueled by higher data revenue.
However, it is worth noting that Airtel Africa, the parent company of Airtel Nigeria, reported a foreign exchange loss of $471 million during the quarter due to the devaluation of the Nigerian naira. The unification of the exchange rate by the Central Bank, which shifted the exchange rate from N460/$ in June to N790/$, resulted in this loss.
Airtel Nigeria’s financial report for the second quarter of 2023 highlights its remarkable growth in data consumption and revenue. The strategic expansion of 4G coverage has played a crucial role in driving data revenue growth, catering to both 4G and non-4G users. However, the devaluation of the Nigerian naira had an impact on the company’s foreign exchange position.
As Airtel Nigeria continues its efforts to expand its network and cater to the ever-increasing data demand, it remains well-positioned for further growth and success in Nigeria’s competitive telecom market. The company’s ability to capitalize on the burgeoning data consumption trends and navigate currency fluctuations will be critical to sustaining its upward trajectory in the future.