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For MTN Nigeria, Voice Revenue Remains King Over Data; READ WHY - Science/Technology - Nairaland

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For MTN Nigeria, Voice Revenue Remains King Over Data; READ WHY by oatzeal(m): 10:31pm On May 05

According to MTN, the onset of the pandemic and the subsequent lockdown have had an almost immediate negative impact on voice traffic and voice revenues. MTN linked this decline to a drop in economic activities and a reduction in purchasing power.

According to the telecom giants, though a decline in voice revenue was partially offset by increased data revenue, it will not fully make up for the voice services which have been the mainstream source of revenue. The reasons for this are well documented.

While the use of various data channels might be on the increase, voice revenue remains the main cash cow for MTN. As the company revealed during its 5G trial in Abuja last year, despite the expected massive impact of 5G, voice is still expected to be the main revenue source.

This trend is not peculiar to just MTN. According to a report by Airtel Africa, another giant in Africa’s telecom market, despite the higher numbers of data subscribers, voice services have remained its major source of revenue.

According to MTN’s report, about 4.2 million new subscribers were added in Q1 2020, bringing its total subscriber base from 64.3 million in 2019 to 68.5 million. Following this, voice revenue grew by 7.2% (a 3.2% QoQ growth) and accounted for 69.1% of the company’s revenue.

In Q1 2020, MTN raked in ₦227.6 billion from voice calls and SMS, almost five times the amount generated from data (₦46.6 billion), within the same period.

Seeking to leverage their vast infrastructure and nationwide traction, Nigerian telcos have been making some forays into the fintech space as they chase different financial licences.

In 2019, the likes of Glo and 9Mobile reportedly secured the payment service bank (PSB) licence, while MTN secured the superagent licence that allowed its agents to offer mobile money (MoMo) services such as sending and receiving money.

In Q1 2020, MTN added 70,000 agents to its network, bringing its total agent network to 178,000 nationwide. These agents processed about 5.6 million transactions during the quarter, 80% of which was airtime vending.

Nonetheless, MTN seems to be pushing ahead with its fintech plans as it claims to have entered some partnerships through which it can offer products such as mobile wallets, payments, microloans, mobile commerce, and micro-insurance through its app or USSD platform.

Besides the fintech pivot, MTN also wants to offer digital services such as its messaging app, Ayoba, and its music streaming platform, MusicTime, among others.

On May 16, 2020, MTN Nigeria (MTNN) listed on the Nigerian Stock Exchange (NSE) with great aplomb, and within 48 hours, it broke into the top five on the NSE. In August, it caused great upheaval, as it briefly overtook Nigeria’s largest firm on the bourse.

MTN Nigeria began 2020 on a better note than the previous year as its share price opened at ₦109. After the Nigerian government ended its tax dispute with MTN, its share price jumped to ₦127 as more investors grew confident.

When President Muhammadu Buhari, signed the Finance Act into law, VAT was increased to 7.5% from 5%, and on the next market opening, MTN’s stock fell to ₦119.

In the month of March, MTN fell back to its IPO price of ₦90 as investor confidence was really shaken by the onset of the pandemic, but it has since been on the recovery,

So far, there have been unconfirmed reports that MTN Group has been planning to sell its majority stake in its Nigerian division. Reports that could create more uncertainty in the minds of investors.

SOURCE: https://www.nairanaijanews.com/2020/05/for-mtn-nigeria-voice-revenue-remains.html

Cc lalasticlala seun

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