Airtel is Obtaining an Additional 10MHz Spectrum for $70 Million to Improve its Data Offering in Nigeria

In a statement sent to the Nigerian Stock Exchange and other stakeholders, Airtel has shared its plans to obtain an additional 10MHz spectrum in the 900MHz band in Nigeria.

The telco company says it is in agreement with Intercellular Nigeria Limited to obtain the spectrum for US$70 million excluding the mandatory fees to be paid to the Nigerian Communications Commission.

Airtel’s reasons for an additional 10MHz spectrum

Smartphone usage is on the rise in Nigeria with the increasing number of affordable smartphones being released to the market. Research shows that the smartphone penetration has increased to 35% and with it, the data consumption has equally soared.

There is an increasing market for data.

Beyond the demand for data is the demand for quality data, which is still a pain point for many Nigerians.

Cue Airtel’s $70 million spectrum.

According to the CEO of Airtel Africa, Mr Raghunath Mandava, the additional megahertz will strengthen Airtel’s network and help expand its services across the country.

“Data is a key pillar of our growth strategy, driven by increasing 4G networks and supported by the increased affordability and increasing penetration of smartphones. With an overall smartphone penetration of more than 35% and data consumption growing by 92% in the six months’ period ended 30 September 2019, Nigeria presents a significant growth opportunity in data.”

Raghunath Mandava, CEO of Airtel Africa

For Airtel’s subscribers, this will lead to an improved user experience on the Airtel network.

“The acquisition of this spectrum will enable us to further deliver on this growth opportunity and continue to offer our Nigerian customers an enhanced user experience.”

Raghunath Mandava.

Another ripple effect to be expected from the additional spectrum is an increased subscriber base on the Airtel network. Improved data speed and LTE network strength gets the ‘tall, dark and handsome’ award among the telcos for many people.

Perhaps an incentive for this drive for more growth came from Airtel’s half-year (H1) 2019 financial statement.

The company recorded a growth of 8.4% in revenue from N464.4 billion – which was the value for H1 2018 – to N503.3 billion. In terms of expenses, the company also saw a rise of 5.7% in its expenses. During the half-year for 2018, it spent 270.4 billion compared to this year’s N285.7 billion.

Compared to last year’s value, Airtel’s internet subscribers increased by 444,598 bringing the total number of subscribers to 33.1 million according to NCC’s statistics.

The telco’s Profit After Tax increased by 11.9% from N62.6 billion in H1 2018 to N69.9 billion in H1 2019. The Profit Before Tax increased by 158.4% from N37.4 billion in H1 2018 to N96.9 billion in H1 2019.

With Airtel’s impressive growth indices, the telco company is not resting on its oars, but working towards strengthening its value offering. After all, value attracts and sustains patronage.