Posted by News Express | 5 August 2020 | 813 times
The COVID-19 pandemic and its economic disruptions notwithstanding, the first half of the year has yielded huge revenue, amounting to N1.97 trillion, for telecommunications operators.
The amount was spent by subscribers on telephony services, especially airtime in the first six months of the year, representing some N57 billion increase when compared to amount spent during the same period in 2019. The figures were computed from the average amount spent monthly by subscribers and earnings showed a 3.73 per cent second quarter growth for MTN, Globacom, Airtel and 9mobile. The June subscriber statistics obtained from the Nigerian Communications Commission (NCC) recorded an increase, which analysts deemed incongruent with the present economic realities. They, however, argued that the quantum leap was directly connected with the nature of telecoms services, which makes the essential products indispensible to survival, especially with regard to the COVID-19-induced socio-economic lockdowns across the world.
Explaining the spike on earnings for GSM operators, Olusola Teniola, who leads ATCON, a group of telecoms operators confirmed that the increase in average revenue per user (ARPU) was very significant owing to restrictions that collapsed virtually every human activity into technology. He specifically told The Guardian that it rose on the back of increased data spend by consumers whose lives were altered by the forced-in stay-at-home directive of the Federal Government. He said ARPU fluctuated depending on consumer purchasing power.
Teniola disclosed that the current industry monthly ARPU, as delivered predominately by the Mobile Network Operators (MNOs), was approximately N1, 725 per subscriber. Each subscriber represents a unique user of both voice and data and not connections, which are mainly machine-to-machine communication.
Operators earned about N2.78 trillion in 2019 from airtime sales. The forced lockdown ensured that most people, businesses, schools, government parastatals, and religious centres had to operate remotely through the online space.
ATCON, at the weekend, said that the industry’s ARPU rose by N543 within the last six months to push up service providers’ earnings in the first half of the year.
Specifically, as at the end of 2019, the ARPU was N1, 182 ($3.85), but by June 2020, it rose to N1, 725. ARPU is a measure used primarily by consumer communications, digital media, and networking companies, defined as the total revenue divided by the number of subscribers.
Analysis of the subscriber data from the NCC showed that Nigeria had 186 million subscribers in January; 187.4 million in February, and 189.3 million as at the end of the first quarter (Q1) of 2020.
By April, it rose to 191 million; 192.3 million in May, and 196.4 million as at end of June, gradually inching close to the 200 million mark. The country’s teledensity is now 102.88 per cent. Telephone density is the number of telephone connections for every 100 individuals living within an area. It varies widely across the nations.
In January, operators earned N320 billion, and N323.2 billion by February ending. In March, the figure rose to N326.5 billion and N329.47 billion in April. By May, it rose to N331.7 billion; and, by June, it was N338.8 billion. The figure amounted to about N1.97 trillion earnings at the end of the first half of the year.
On the development witnessed in the industry in June, including the addition of 4.1 million new subscribers, 2.56 million Internet users, telcos’ 3.73 per cent Q2 growth, and rise in teledensity, the ATCON boss explained that the growth should have been more considering that COVID-19 pandemic and government’s response was to force a ‘stay-at-home-lockdown’ directive.
“It appears that the increase in new lines demonstrates the acquisition of additional lines purchased by consumers that were forced to engage on virtual classes for their children at home and increasing subscription numbers on the back of one-off attractive data bundling alongside devices from MNO(s).
“The net additions in subscriptions demonstrate the tapering down on active lines recorded and hence reflected in the data only increase in connections to gain different access points to the Internet to hedge against relying on just one provider for access. What was expected was a sharp spike in data net additions to reflect the COVID-19 reality,” he stated.
Sustaining the growth, despite the poor state of telephone services in the country, Teniola, an engineer, said affordability is the key measurable indicator that would determine usability and sustainability in both subscription number growth and revenue numbers going forward.
According to him, with impact on consumer spending predicted to be negative as the COVID-19 relaxation is entering mid-Q3, it is more likely that the propensity for consumers to keep spending on multiple SIM subscriptions will begin to decrease, as palliatives and job losses cannot sustain the data usage and consumption patterns displayed during the peak of the COIVD-19 pandemic in Q2.
The rise in earnings was corroborated by MTN, when it reported half year revenue of N637 billion in 2020 compared to N566.9 billion reported in the same period last year.
The firm said the 12.5 per cent revenue increase was driven by growth in data revenues in the first and second quarters of the year.MTN Nigeria’s Chief Executive Officer, Ferdi Moolman said the company experienced a challenging operating environment in the second quarter characterised by COVID-19 induced lockdowns and the broader macro-economic impact.
Despite this, Moolman said MTN Nigeria maintained double-digit service revenue growth of 12.6 per cent for H1, driven by strong growth in our key revenue lines. He added that data revenue rose by 57.6 per cent supported by an increase in data users and traffic. He said, “Revenue from digital and Fintech services rose by 121.8 per cent and 29.6 per cent, respectively, while voice revenue growth was 2.8 per cent amidst a change in traffic pattern following the lockdowns. (The Guardian)
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