BY BAMIDELE FAMOOFO
Recent data published by the Nigerian Communications Commission showed that the number of telecommunication subscribers in Nigeria grew by 1.4 percent to 198.12 million in February 2022 from 195.46 million as of December 2021.
Similarly, teledensity which measures the number of active telephone connections per 100 inhabitants living within an area grew to 103.8 percent in February 2022 from 102.40 percent in December 2021.
Stock market analysts said the impact would be evident in MTNN’s revenue performance for Q1-22 given its market leadership position with market share of 37.9 percent as of February 2022.
In the 2021 financial year, the industry-wide suspension of sale and activation of new SIM cards by the NCC undermined growth in subscriber base. Though the NCC lifted the ban in April 2021, the directive left a negative imprint on industry metrics.
According to NCC’s data, mobile subscribers declined by 4.5 percent to 195.46 million as of December 2021 from 204.60 million in December 2020. Similarly, data and broadband subscribers declined by 8.0 percent and 9.2 percent, respectively, to 141.97 million and 78.04 million over the same period.
For the sake of evidence, MTNN’s subscriber base declined by 10.5 percent year-on-year (y/y) to 68.50 million as of 2021FY. Although the decline in subscriber base undermined the growth in voice revenue (+7.0% y/y) in 2021FY, Management disclosed that the impact was partly offset by increased usage of voice calls by its active SIM base and migration of customers to a higher quality of experience.
Furthermore, Management guided that the decline in subscriber base will bottom out and return to positive net additions in Q4-21, given efforts in ramping up SIM registration and activation infrastructure. True to Management’s guidance, MTNN added approximately one million subscribers in Q4-21.
“With data from NCC indicating an increase of 2.66 million in the industry’s subscriber base between December 2021 and February 2022, we estimate MTNN added c.1 million subscribers to its network over the same period. We expect continued rebound in industry’s subscriber base in 2022, as mobile network operators have collaborated with National Identity Management Commission (NIMC) to streamline the process of onboarding new customers; given that NIN is now a pre-requisite for the sale of new SIM cards. We forecast MTNN’s subscriber base will grow by 4.4% y/y to 71.49 million customers in 2022E.
Accordingly, we estimate voice revenue will grow faster by 11.6% y/y in 2022E (vs 7.0% y/y in 2021FY),” Cordros Securities Limited disclosed in its Analyst report on MTN.
The analysts added: “Beyond the growth in subscriber base, we expect data revenue will remain a key driver of service revenue. Data revenue has expanded tremendously from NGN67.8 billion in 2016FY to NGN516.21 billion in 2021FY, implying a 5-year CAGR of 50.1%.
We believe the country’s favourable demographics underpinned by the large population (estimated at c. 200 million) with a median age of 19, rising adoption of social media platforms for communication and digital marketing, and increasing internet penetration are key drivers of data revenue. We estimate data revenue will grow by 26.5% in 2022E while the data revenue share will rise to 43.2% in 2026E from 33.6% in 2022E.”
