MTN Nigeria has recorded a 50.6% growth in the penetration rate of smartphones in the country. The company’s data revenue also rose by 51.6%, thus outpacing voice revenue which rose by only 2.9% in the first 6 months of the year.
The report published in July reveals interesting facts about the growth of telecommunications in Nigeria and today, we’re bringing you a breakdown of these results.
Why it Matters:
Operating across 21 countries in Africa as well as in the Middle East, the MTN Group has grown to become Africa’s telecommunication giant. Statistics have shown that they have more subscribers in Nigeria than any other country; contributing graciously to the country’s revenue in the last couple of years.
Although the Nigerian economy experiences various challenges – from forex paucity to rising energy costs, rising food costs, and general inflation, which are putting pressure on consumer spending; MTN Nigeria is making steady progress.
“Over the years, we have borne witness to the innovation, drive, and resilience that is at the heart of Nigeria. The opportunity to play a role in the nation’s evolution has been our privilege and greatest achievement,” the company’s website reads.
Highlights of the Report:
• Smartphone Penetration:
In the first six months of 2022, there was a 50.6% penetration rate, leading to an additional 3.4 million smartphones getting connected to the network.
Although there are over 200 million mobile subscribers in Nigeria, only 10-20% of the population use a smartphone. The majority of mobile users are still using feature phones which offer basic phone functions like voice calling and text messaging.
• Mobile Subscriptions:
Last year, the telecom company had recorded a total of 68.9 million mobile subscribers in the first 6 months. This year, the numbers have grown by 7.6% to reveal a total of 74.1 million subscribers, meaning 5.7 million new mobile subscriptions were made. The company attributed this growth to the gross connection of customers who had been barred from making phone calls in line with the NCC’s directive.
What the company said:
In a teleconference transcript held to discuss the results, Hassan Jaber, Chief Operating Officer, MTN Nigeria said: “Subscribers who could not follow either of the two processes (re-registration via point of sales or self-service), are going naturally to the gross connection.
“So, we are noticing that this portion of the subscribers just decided to replace their SIM card and get a new one via the gross connection. So, we monitor the NIN progress and drive the recovery via the three fronts. There was a high gross connection in the past period. A certain percentage of that gross connection represents those people that are just simply replacing their SIM cards,” he added.
• Data Subscriptions:
The number of active data users on the network increased by 13.2% to a total of 36.8 million subscribers. Consequently, data revenue had risen by 51.6%, with over 280,000 new broadband users. This made data subscriptions the largest revenue earner for the company in comparison to airtime purchase and/or fintech services.
What the company said:
“Our continued drive for data conversion from the new and existing customer base supported this, in addition to enhanced quality and coverage of our network with a focus on 4G acceleration. In terms of fixed broadband penetration, we added over 280,000 users, bringing our total user base to over 896K,” the company’s CEO, Karl Toriola also said.
• Fintech Subscribers:
Since the approval of MTN’s PSB in May 2022, the company has seen an 87.3% increase of active Fintech subscribers with 4.2 million registered accounts.
Also, the Nigeria Interbank Settlement System (NIBSS) has reported a 3,454.46% rise in the use of mobile channels for payment transactions within the first four months of the year.
This growth follows a 13.98% increase in the total number of telecommunication subscribers in the country from 176.62 million in April 2019 to 201.31 million in the corresponding month of 2022. Hence, the Federal Government is set to make a total of N483.73bn in three years from the electronic payment boom by way of the Electronic Money Transfer Levy.
What the company said:
“On fintech revenue, we have said we are not giving any revenue guidance as we are at the early stage. Our focus in the early years is to build the ecosystem. And we’re going to put much effort into building that ecosystem, particularly around merchants, subscriber wallets and active subscriber wallets. The actual value creation out of this business comes on a medium to long-term basis once we’ve scaled up,” Toriola explained.
• 4G Coverage:
The company’s 4G network has also been said to cover 75.3% of the country’s population out of the 80% reach they had earlier mapped out for the rest of the year; constituting 77.9% of data traffic year-over-year. To laud their hard work, Umlaut, awarded MTN Nigeria the ‘Best in Test’, with the best-rated user download speed and latency in Nigeria.
What the company said:
Toriola said: “Our 4G coverage is around 75%, and we’re targeting 80% at the end of the year. You may ask yourself, why not go for 100%? There are incremental capital and lease costs associated with the aggressive rollout of 4G and there are a number of locations, generally in the more rural areas, where you actually have almost no 4G handset penetration.” So, you just put up the capacity, and nobody will use it. But we are investing ahead of handset penetration. It’s not strictly where we currently have the handsets. If you compare our revenue growth to contemporaries, on data precisely, and all other associated data points that you can get like Umlaut’s report, which I referred to, I think you’ll probably agree with us that our strategy on 4G is the right one.”
• 5G Ready to Rollout:
The company’s CEO affirmed that: “We have deployed, not yet activated, I must be clear, thus far 127 5G sites in readiness for go live in Q3 2022. We are the only operating mobile network operator with a 5G license, which gives us a first-mover advantage and enables us to deepen penetration in the high value segments of the markets and draw value towards us. 5G technology delivers significantly higher speeds at much lower latency, potentially unlocking many new use cases for consumers and enterprises in the immersive and industrial Internet while improving network economics – that’s the cost of delivery per GB.”
The Bottom Line
Increased smartphone penetration, faster and more reliable internet connection and steady growth in Fintech solutions are some of the factors that facilitate digital evolution in a country and MTN Nigeria is committed to achieving these goals. These results imply that Nigeria is on a steady path to digital sustainability.
Also, Nigerians have proven to be open to change and resilient through challenges. Despite the disconnection of mobile lines and financial hardships, the people have found ways around these barriers and made the most of the positive alternatives available to them.
In the months to come, we can also expect higher fintech outputs as predicted by the Federal Ministry of Finance, Budget and National Planning and a more colorful outlook in the financial inclusion framework.
(Wholly reported by Mary John)