Amidst the pandemic rush and chaos, telecom sector experience increase revenue streams.
As Nigeria went into lock-down in late March, 2020 and remote work started becoming the norm of the workforce, Nigerian telecom companies came struggling since more people are using the web for data-heavy activities, telecoms’ had to regulate their infrastructure to soak up this surge in traffic. As a results of more usage of the web also as recharge airtime for voice calls and therefore the likes, subscribers spent more on data and voice call recharge which made them to complain that the prevailing data bundles were both inadequate and not affordable. because the challenge to figure from home rose, a twitter user posted that “In the united kingdom , Vodafone gives 30 days free mobile data to place a smile on the faces of British during this Corona-virus period, Nigerians aren’t even posing for free data. they’re only posing for affordable data.” This made the #CutDataPrices hash tag to trend online for a couple of days as people vented, although, to no avail as no change was effect to the affordability of knowledge bundles. However, it’s not that telecoms couldn’t reduce the worth of knowledge during this pandemic era but the challenge is that they can’t.
Mobile voice is that the major source of revenue for these companies as voice revenue comes from charges on domestic and international calls, additionally to the fees each telecom collects when their subscribers call other domestic networks (interconnect fees). quite 68% of MTN’s income in 2020 came from voice services, its half-moon report shows. This was also affirmed by Airtel Africa because it says mobile voice is its largest stream of income. In Nigeria, voice revenue stood at $739.8 million, or 66.9% of its earnings within the country consistent with its IPO documents while the telecom operates in 14 African countries yet over 60% of its revenue come from phone calls.
In other news, that mobile voice revenue stream is now under threat from the massive adoption of digital platforms by mobile subscribers for his or her daily transactions and communications. The 4G broadband development, as an example , enabled the rise of more efficient digital video and speech platforms but the value of a 4G license, spectrum bids and therefore the cost of building LTE infrastructure are on the very high side. Experts researched that the 5G will produce a good faster internet. Though this is often desirable, 5G is dear to create and will significantly change the present voice and data revenue model of Nigerian telcos because the GSMA Intelligence predicts that companies globally will spend around $1 trillion over subsequent five years to upgrade to 5G.
During this pandemic period, researched data in Nigeria shows that MTN, Glo, Airtel gained new internet subscribers amounting to 2,812,753 while 9mobile lose 302,125 internet users from their already existing internet subscribers. consistent with the research, MTN gained 698,593 new internet users for the amount under review, as a result, increasing its subscribers to 57,980,716 as against 57,282,123 recorded in March, 2020. Globacom on its own platform saw a rise of two ,072,369 new internet users, increasing its subscribers to 35,943,825 as against 33,871,456 recorded in March, 2020. Airtel was also on the rise side because it recorded 41,791 new internet subscribers, increasing its initial subscription of 36,827,677 subscribers within the month of March 2020 to 36,869,468. However, the info from the research revealed that 9mobile lost 302,125 of its internet users, putting its subscribers at 7,459,943 as against 7,762,068 recorded for the month of March 2020.
Beyond data services, telcos are extending their tentacles into financial services (fintech) like Safaricom’s exploits with M-Pesa. In 2018, the financial institution of Nigeria (CBN) announced that it’s granted the Payments Service Banking (PSB) license to non-finance companies to permit them to supply basic banking services. The PSB may be a limited banking license that desires to bring basic financial services to the unbanked population of Nigeria because it allows operators to issue bank accounts, debit cards, deploy ATMs [Automated Teller Machine], allows people to form payments, just to say a couple of . Operators are going to be restricted from the power to grant loans or engage in exchange operations. Leveraging their network infrastructure and vast network of agents, telcos want to supply financial services to Nigeria’s rural and unbanked population thereby two telcos, Globacom and 9Mobile, snapped up the PSB license in 2019.
Nigeria’s biggest telco, MTN, secured a special license, the Superagent licence in July 2019. thereupon license, its agents offers mobile money (MoMO) services like accepting deposits and sending money to users. With its 178,000 agents, MTN’s fintech revenue has grown to over ₦11 billion within the half-moon of 2020. Airtel and MTN already offer mobile money services in several countries. Airtel’s MoMo operation is sleep in its 13 other African markets and it’s growing fast. Airtel Money revenue jumped from $103 million in 2017 to $234 million in 2019. So while telcos come struggling from online platforms, they’re moving quickly to capture other streams of income.
Continually, the Nigerian telecom sector show indications of sustaining and maintaining the economy with impressive growth in mobile voice and data subscriptions within the pandemic period despite the challenges and revolts by subscribers on social media for decrease within the prices of knowledge bundles and tariff charges. While telecoms subscriptions hit the 190 million mark, data subscription grew to 138.3 million, representing a 2.0 percent growth from March. Mobile subscription reached 190,806,067; representing a marginal increase by 0.80 per cent or 1,523,271 as against the 189,282,796 recorded during an equivalent period in 2019.