See Why Poor Nigerians Making More Phone Calls:MTN Boss - Global Report

Breaking

Diaspora Banking

Diaspora Banking
Diaspora

Uba banner

Uba banner
Uba

virtual account banner ad

access banner

ahttps://drive.google.com/file/d/1LcMn-nAFN9eW_IgmPFaWvPxfRznlHxwI/view?usp=drivesdk lt="test banner" src="https://2.bp.blogspot.com/-TswaFT8_0oE/YIQpUnaVR6I/AAAAAAAABz8/vLPnZ_VoNQ0PVb6Mr04jkZ7HeR3ZzefyACK4BGAYYCw/s1600/IMG-20210424-WA0026.jpg"/>

Skillnovation

Skillnovation
WEMA/FG

Skillnovation

Skillnovation
WEMA/FG

Monday, May 16, 2022

See Why Poor Nigerians Making More Phone Calls:MTN Boss



Last week, the CEO of MTN, Nigeria’s largest telecommunications network told investors that as of April 25th this year, “approximately 60 million subscribers have submitted their NINs, representing about 85% of our subscriber base” who are allowed to make calls.

 

Yet the company posted voice revenue of N258 billion up from N244.6 billion same period last year and N209.4 billion in the immediate past quarter (2021 Q4). Airtel, the only other listed GSM company reported that it had 35.9 million subscribers out of a customer base of 44 million subscribers yet its revenue on voice calls rose to $268 million (N112.5 billion) between January and March this year compared to $246 million (N103.3 billion) in the immediate past quarter (October to December last year).

 

These sorts of numbers suggest against all odds, Nigerians are making more phone calls than ever before. Telcos have often pointed to data as an area of immense growth however, it is obvious voice remains a key aspect of their growth trajectory. So, what is driving these numbers?

 

According to MTN, Voice revenue growth “was enabled by our expanded customer acquisition touchpoints and rural telephony initiatives, as well as our enhanced customer value management (CVM) toolkit, which reduced the impact of the SIM registration and activation restrictions” suggesting low-end value customers underpinned this growth.

 

Here is Airtel’s explanation. “Voice revenue grew by 15.9%, driven by an increase in voice usage per customer of 20.8% which led to an ARPU increase of 20.7%. Customer base growth was affected by the NIN-SIM linkage regulations in Nigeria during the first half of the year but returned to growth, adding 4 million customers in the second half of the year, achieving net growth of 2.4 million customers over the full year. The number of regulatory approved outlets expanded to over 19,100 as of 31 March 2022.”


 

Airtel also went further to reveal its Voice minutes per customer reached 257 minutes per month, up by 9.8%, resulting in voice ARPU growth of 8.0%. MTN does not reveal voice per unit numbers.

 

So, why are poor people calling more? This could point to a number of factors based on our thesis. Telcos have mastered the art of price differentiation in recent years offering low-end users several benefits that encourage longer call minutes. By lowering prices, customers stay longer on the phone, revving up sales. This is the typical value play in aby market catering to poor people. Increase volumes by reducing price or increase volumes by maintaining price but shrinking package.

 

Another reason is the dominance of younger Nigerians as a percentage of the total population. As more young Nigerians get to the age of 16, they demand to own their own phones and sim cards ensuring voice revenue growth is sustained. Most of the youthful Nigerians are also in rural areas relying on telephone calls to contact family and facilitate commerce. Insecurity is also increasing the use of phone calls to communicate more than ever, we believe.

 

Just as Covid-19 has aided data usage, more people also rely on telephone calls to reach family in distant locations across the country. While growth in calls cannot be compared to data, it remains a dominant revenue segment for telcos. Telcos know this and continue to invest hundreds of billions in building out their networks including expanding SIM card registrations and compliant


 

They know how important voice is to their business, especially for the informal market without smartphones, relying on it to communicate evermore. Nigerians like to talk, and the telcos know this.

 

NAIRAMETRICS

No comments:

Post a Comment