Telecom giants, Airtel Africa has posted significant growth in 2020 despite the economic strain caused by the Covid-19 pandemic. This is according to its recently released financial report for nine months between March 2020 and December 2020.
The company reported a revenue of $2.87 billion, a 13.8% increase from the 2.52 billion generated during the same period last year. The recorded growth was spread across all its market with Nigeria (its biggest market) contributing the highest.
Airtel recorded growth across all regions: Nigeria up 21.6%, East Africa up 23.4% and Francophone Africa up 8.0%
Airtel’s strong revenue growth drove a 21% increase in its operating profit before tax- $800 million. But, the profit after tax fell below last year’s numbers, dropping 21% to record $261 million.
Mobile Money revenue continues to grow
Voice remains the biggest source of revenue for Airtel in Africa. During the 9-month period, voice revenue reached $1.5 billion. However, its growth appears to be slowing.
According to the report, voice revenue grew just 5.3% compared to mobile money revenue which grew by 27.8% and mobile data which grew by 24.4% on currency fluctuations (reported currency).
This shows that Mobile Money is quickly becoming a big source of revenue for telcos. The sector generated a revenue of $291 million during the period, up from $228 million generated in 2019.
Mobile Money Contributed 10% of the total revenue generated by Airtel Africa
The growth of Airtel’s Mobile Money was promoted by its many strategic partnerships with leading remittance institutions during the year. For example, its partnerships with MoneyGram, Mukuru and WorldRemit allowed more than 20 million Airtel Money customers in 12 countries to transfer and receive funds across the globe.
Similarly, Mobile data is also rising to be the next big growth driver. It generated a whopping $842 million, up from $677 million during the previous year.
This is not surprising as the company has one of the widest 4G coverage in Africa, with 82% of its total sites in Nigeria now on 4G.
Over 100 million subscribers
Airtel’s growth wasn’t limited to only revenue as it also recorded double-digit growth in subscribers across its African market.
The company now has 118.9 million, driven by increased adoption of mobile money services (29.0%) and increased penetration across mobile data (23.5%) during the period.
Airtel CEO, Raghunath Mandava attributed the growth of its user base to the company’s significant penetration in rural markets.
The report also showed that the telco paid a dividend of 1.5 cents per ordinary share for the FY20. However, the Board has approved a new progressive dividend policy to grow the dividend annually by a single-digit percentage from a base of 4 cents per share for FY 2021.
In Nigeria, Airtel broke the billion-dollar mark, generating a revenue of $1.13 billion. This is a 13.5% growth from the 995 million recorded in the previous year. However, the growth would have been higher if not for the devaluation of the Nigerian Naira.
Voice revenue continues to be the major source of revenue for the telco in the country. It grew by double-digits to $657m in the nine-month period. There was no mobile money revenue in Nigeria but the revenue generated from data was huge.
Data revenue grew by 35.2% in constant currency to hit $397 million during the period.
Also, Airtel’s total customers in the country are now over 44.4 million, with a unique 18.8 million recorded as data subscribers.
New SIM registration rules may stifle growth
The total number of Airtel subscribers in Nigeria may not grow in the short term due to NCC’s decision to stop sales of new SIMs until they’ve made progress with registering customers.
Despite the temporary lapse, Airtel’s CEO revealed that the company still recorded strong customer growth in Q3. The telco generated $364 million in the quarter, up from the $313 million recorded the previous year.
However, if the ban persists beyond February, it may reflect on the companies projection for the first quarter. As there’s no telling how much onboarding new subscribers would improve the company’s profit margin.
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