If there is one takeaway from the performance of these companies since the pandemic, it is that Nigerians love to spend money on communications. Data by the Nigerian Communications Commission (NCC) suggests that Nigerians recorded 173 billion minutes in outgoing calls and 86 billion minutes in incoming calls in 2021.
Airtel reported that it made about N1,694 ($3.8) per user in three months, confirming how much Nigerians prioritize their communications, especially phone calls. MTN did not report its ARPU.
But while voice has, for years, been the main money spinner for telcos, data is gradually taking centre stage. If the trends keep going, a quick look at the financial statements of both companies shows that data will pass voice in the next quarter or two.
Last quarter, MTN reported N200.9 billion in data revenue compared to voice revenue of N209.3 billion in the same period. Airtel also reported data revenue of $221 million compared to voice revenue of $253 million. Data is officially closing the ranks. Sooner rather than later, it will make more money for telcos than voice calls.
The growth in data has been remarkable over the last five years due to the scale of cheaper smartphones in the country. Social media apps such as WhatsApp, Instagram, TikTok, and YouTube have also increased the need for Nigerians to guzzle data at astronomical levels.
Data from the NCC indicates an increase in the volume of data consumed as of December 2021 compared with the year ended December 2020. The total volume of data consumed by subscribers increased to 353,118.89 TB as of December 2021 from 209,917.40 TB as of December 2020, representing an increase of 68.2% in data consumption within the period. The telcos also report a similar trend.
According to MTN, data revenue rose by 49.1%year over year. due to increased subscribers and data usage in 2022. The telco’s data traffic grew by 70.6% YoY. More importantly, data usage (MB per user) rose by 52.2%. Airtel also reported similar revealing data revenue increases of 26.7% in constant currency, driven by data customer base growth of 13.5% and data ARPU growth of 9.1%. Airtel’s data usage per user is 4.8 GB per month.
But while voice has, for years, been the main money spinner for telcos, data is gradually taking centre stage. If the trends keep going, a quick look at the financial statements of both companies shows that data will pass voice in the next quarter or two.
Last quarter, MTN reported N200.9 billion in data revenue compared to voice revenue of N209.3 billion in the same period. Airtel also reported data revenue of $221 million compared to voice revenue of $253 million. Data is officially closing the ranks. Sooner rather than later, it will make more money for telcos than voice calls.
The growth in data has been remarkable over the last five years due to the scale of cheaper smartphones in the country. Social media apps such as WhatsApp, Instagram, TikTok, and YouTube have also increased the need for Nigerians to guzzle data at astronomical levels.
Data from the NCC indicates an increase in the volume of data consumed as of December 2021 compared with the year ended December 2020. The total volume of data consumed by subscribers increased to 353,118.89 TB as of December 2021 from 209,917.40 TB as of December 2020, representing an increase of 68.2% in data consumption within the period. The telcos also report a similar trend.
According to MTN, data revenue rose by 49.1%year over year. due to increased subscribers and data usage in 2022. The telco’s data traffic grew by 70.6% YoY. More importantly, data usage (MB per user) rose by 52.2%. Airtel also reported similar revealing data revenue increases of 26.7% in constant currency, driven by data customer base growth of 13.5% and data ARPU growth of 9.1%. Airtel’s data usage per user is 4.8 GB per month.
- "In Q2’23, 4G data usage per customer reached 8.3 GB per month as compared with 5.4 GB in the prior period, with 4G data usage contributing to 79.5% of total data usage."
MTN claims 4G traffic now constitutes 80.4% of the total, reflecting a 9.2% YoY increase in its contribution.
The increasing growth of data revenue is likely associated with Nigeria’s smartphone density. According to MTN, it reported smartphone penetration at about 52%. Airtel, on the other hand, reported that smartphone penetration was up by 1.5 percentage points to 35.1%. As things stand, the tailwinds are firmly behind data, and telcos know this.
Just as it was two decades ago when telcos spent hundreds of billions of naira on rolling out network coverage areas for voice, they are also investing heavily in data, especially with the 4G and 5G rollouts. MTN‘s CAPEX, including rights of use assets, rose 45% to N379 billion, while Airtel has invested $134 million in Nigeria this year alone. Most of the expenditure is on increasing their data offerings.Data over voice seems logical considering the advancements in the internet, especially since the COVID-19 pandemic. Nigerians spend time on so many data-guzzling applications. Social media, streaming apps, investment apps, content creation, working from home, etc.
The increasing growth of data revenue is likely associated with Nigeria’s smartphone density. According to MTN, it reported smartphone penetration at about 52%. Airtel, on the other hand, reported that smartphone penetration was up by 1.5 percentage points to 35.1%. As things stand, the tailwinds are firmly behind data, and telcos know this.
Just as it was two decades ago when telcos spent hundreds of billions of naira on rolling out network coverage areas for voice, they are also investing heavily in data, especially with the 4G and 5G rollouts. MTN‘s CAPEX, including rights of use assets, rose 45% to N379 billion, while Airtel has invested $134 million in Nigeria this year alone. Most of the expenditure is on increasing their data offerings.Data over voice seems logical considering the advancements in the internet, especially since the COVID-19 pandemic. Nigerians spend time on so many data-guzzling applications. Social media, streaming apps, investment apps, content creation, working from home, etc.
Even the central bank’s quest for financial inclusion and cashless payment is contributing to a surge in data usage.Thus, sooner rather than later, Nigerians will turn their focus on how much they spend on data and how data usage is calculated. Today, metering data usage is a largely opaque venture, and the lack of transparency is rather confounding. However, as telcos continue to report massive profits with huge margins based on data, the risk of stricter regulations increases.
