Airtel Africa's data earnings surge by 24.4%, report reveals tax profits of $482 million prior to taxes
Airtel Africa's Q4 2021 Growth Challenged by Systemic Disruptions, Not Age Limit Proposals
Airtel Africa, a leading telecommunications company, reported its financial results for the period ending 31 December 2020. The company's revenue for the said period was $2.87 billion, marking a 13.8% increase from the previous year.
Nigeria, Airtel Africa's biggest market, accounted for almost half of the reported revenue. However, profit after tax declined by 21% to $261 million for the same period.
Despite the decline in profit, Airtel Africa's operating profit for the same period was $800 million, a 21% increase from 2019. The growth was primarily driven by a 24.4% increase in data revenue and a 21.2% increase in data customers in Nigeria. In East Africa, data customers grew by 21.2% and the average revenue per user increased by 2%.
However, the growth in Q4 2021 was affected by operational disruptions due to technical difficulties migrating to new identity verification platforms mandated by Nigeria’s identity management authority (NIMC). These disruptions prevented Airtel Africa and other telcos from supporting SIM swaps, replacements, new activations, or porting, which likely slowed subscriber growth.
The new SIM registration rules in Nigeria, including the proposal to restrict SIM acquisition for individuals under 18 years unless through parents or guardians, were not expected to negatively impact Airtel Africa’s growth significantly in Q4 2021. The age limit proposal is designed more for protection and national security and allows guardians to register SIMs on behalf of minors.
As of now, Airtel Africa has collated National Identification Number (NIN) information for 21 million mobile customers out of its 44.4 million in Nigeria (47%). However, the company still needs to verify the NIN information it has received with the NIMC.
In East Africa and the Francophone regions, Airtel Africa showed strong performance in its 9-month financial report. As of now, 72% of Airtel Africa's sites in East Africa are on 4G, and 82% of its total sites in Nigeria are now on 4G.
The company does not expect the number of users in Nigeria to grow in the short term due to new SIM registration rules. The implementation of these new rules may affect customer growth in Nigeria in Q4'21. Airtel Africa attributed the reduction in profit after tax to one-off items incurred in the same period in the prior year.
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The mobile industry's growth in Q4 2021 for Airtel Africa was hindered by operational disruptions resulting from technical difficulties during the migration to new identity verification platforms. Moreover, the finance department reported a decline in profit after tax due to one-off items incurred in the same period in the prior year, not because of the age limit proposals in Nigeria's finance sector or the advancement of technology in mobile services.
