Telecom operators in Nigeria are poised to rake in more revenue this holiday season as Nigerians increase call volume and data usage.
According to past financial records from MTN and Airtel, two of the country’s leading telcos, increased subscriber spending in December has consistently had a positive impact on fourth-quarter revenue over the years.
In addition to an increase in calls to wish family and friends well, people often consume more data during this period by sharing messages and videos across different platforms in celebration of the season.
According to industry watchers, the holiday season gives subscribers more time to explore social media and watch videos that eat up their data. And by doing this, many spend more on data than they usually do, without even realizing it.
Telcos fourth quarter revenue: For telecom operators in Nigeria, the fourth quarter has always been a harvest period in terms of revenue. For example, a look at MTN Nigeria’s financials over the past 3 years shows steady revenue growth in the fourth quarter.
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- In Q4 2019, MTN’s revenue increased by 8% from Naira 288.9bn in the previous quarter to Naira 313.2bn. Similarly, in 2020, fourth quarter revenue for telcos increased by 10% to Naira 370.6bn compared to Naira 337.6bn in the previous quarter of the same year. In Q4 2021, MTN’s revenue also grew by 8%, from Naira 414.9bn in Q3 to Naira 448bn.
- Airtel Nigeria’s financial records also show a similar growth pattern in the last quarter of every year, which happens to be its third financial quarter. For the quarter ending in December 2019, Airtel posted $355 million in revenue, up 8.5% from the $327 million it posted in the previous quarter. Airtel also ended 2020 with a revenue growth of 9% in the last quarter of the year with 412 million dollars.
- Its results for the quarter ending December 2021 also showed revenue growth of 6% to $476 million compared to $450 million in the prior quarter.
Driving forces: According to the president of the National Association of Telecom Subscribers, Adeolu Ogunbanjo, there are many factors that drive telecom subscribers to spend more on calls and data every December. While he noted that Nigerians like to talk a lot and congratulate people over the phone, he said:
- “In addition to our love of talking and greeting people on the phone at Christmas, December is always a holiday period and this allows people to spend more time on social media, especially on a video platform like TikTok. This leads to an increase in data consumption. Again, many people will want to appreciate their customers at the end of the year and they do so through social media, either with videos or images.
- “Interestingly, this is also the time when telecom operators often come up with one promotion or another.her, which encourages people to spend more. It is beneficial for subscribers and telecom operators.”
- However, he noted that the increase in the 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 the service. When everyone 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 Nigerian Telecommunications Companies Association, Mr. Ajibola Olude, in addition to the social aspects of using telecom services, productivity will continue to generate more revenue for operators. He said:
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- “If you go to any sector today, its growth, its productivity is driven by telecommunications services. For example, hospitality, banking and insurance. Telecommunications are proving their ability to serve all sectors of the economy. This growth will continue in the coming years.
4G/5G uptake: An IT expert, Mr. Jude Okwonkwo, believes that the adoption of 4G and now 5G by subscribers will continue to increase their spending. He said:
- “As more people adopt 4G, the speed 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 only WhatsApp voice calls but also video calls to connect with their family or friends who are far away. We all love to see people that we haven’t seen for a long time due to the distance barrier, but technology today has eliminated that barrier since you can connect live through video calls, thanks to 4G technology in recent years and now 5G will. do even better.”
While only MTN Nigeria has so far deployed 5G in Nigeria, all telecom operators are currently expanding their 4G network to ensure more Nigerians have access to faster internet service. As part of the company’s strategies to boost revenue this quarter, MTN CEO Karl Toriola recently revealed that the telecommunications company would expand its 4G service to reach 80% coverage of the population before the end of this quarter. year. He said the company would also roll out an additional 362 5G sites and bring 5G to more smartphones.