Airtel, MTN Record Growth In Profits Amid Slowdown In Subscription
Airtel and MTN Nigeria have released their growth in profit for the second quarter of the year even as they continue to struggle to get back to their peak periods in terms of the number of returning subscribers and the headwinds that have impacted subscribers’ wallets.
According to the financial statement which was recently released, Airtel, saw its profit increase 25 percent in the second quarter ending June 2022 to $178 from $148 million in the same period last year. The telco’s revenue rose by 13 percent to $1.26 billion in the period under review from $1.11 billion in the same period last year.
However, MTN also reported a profit after tax of N181.6 billion for the first half of the 2022 financial year, up 28.1 percent from N141 billion in the corresponding period last year, according to its latest financial report. The telco’s revenue rose to N950 billion from N791.2 billion in the corresponding period last year.
While the two companies saw growth in different service areas including fintech and data, the number of subscribers is far less impressive. This affected revenue in voice calls.
Speaking on the profit growth, Segun Ogunsanya, chief executive officer of Airtel, said the telco faced headwinds from outbound voice calls following the decision by the Nigerian Communication Commission to ban SIMs not registered with the National Identity Management Commission (NIMC) and without the National Identification Numbers (NINs).
According to Karl Toriola, CEO of MTN Nigeria “In terms of how general traffic trends have evolved since the implementation of the directive, we have seen a gradual recovery in total voice traffic as the affected subscribers are reconnected to resume voice calls, and gross connections continue to ramp up. Data revenue has continued a steady increase supported by the switch to data by affected subscribers although it has not yet fully compensated for the decline in voice revenue of restricted subscribers,”
The implication is that NIMC’s capacity deficiencies have become the albatross of the telcos. The total number of Nigerians with NINs stood at 82.73 million as of May 2022, which is a growth of about 10.3 million from January when the number was at 72.7 million.
Aliyu Aziz, director-general of NIMC, also confirmed this in an interview saying while the commission has the capacity to issue about three million NINs monthly, the most it can accommodate is only 100 million Nigerians. In other words, once the capacity hits that capacity, millions of Nigerians wouldn’t be able to get their NINs unless the commission’s server is upgraded.
For telcos like MTN and Airtel, the capacity deficiency is not good news. At 82.7 million already and going by the 2 million monthly verification, it means the NIMC could hit the 100 million capacities by November.
The combined subscriber total of MTN at 79 million and Airtel at 59 million is above the 100 million mark of the commission. It, therefore, means that many subscribers of the telcos would not get back full access to their SIMs.