Nigeria Magazine’s Post

#Sustainable pricing in Telecommunication sector Nigeria, believes the country's telecommunications sector is "in a deep crisis" due to rising costs and unsustainable pricing.whilst emphasizing the need for a price increase, stating it is an "absolute necessity" to rescue the sector from collapse Challenges Highlights of the challenges faced by telecom operators, including *escalating costs, *inflation, and *forex devaluation, which threaten the Telecommunication industry's survival. Nigeria's telecommunications sector is facing a deep crisis due to rising costs and unsustainable pricing. This position paper argues that a price increase is necessary to rescue the sector from collapse and ensure its survival. Position: The telecommunications sector is critical to Nigeria's economic growth and development. However, the current pricing regime is unsustainable and threatens the industry's survival. Strategic line of action: 1. Implement a price increase to reflect the current economic realities and ensure the sector's sustainability. 2. Encourage regulatory authorities to consider concessions and necessary interventions to support the sector. 3. Promote investment in the sector by ensuring fair returns on investment. Conclusion: The telecommunications sector is in a deep crisis, and urgent action is needed to prevent its collapse. A price increase is necessary to ensure the sector's sustainability and survival. Regulatory authorities and stakeholders must work together to address the challenges faced by telecom operators and ensure the sector's continued growth and development.

"For an industry in its infancy striving to offer Nigerians access to new forms of technology and communications, it was necessary to guide pricing to enhance market adoption. Competition added extra pressure on prices, a wealth of choices ultimately benefitting the consumer. Through it all, the margins were sufficient to incentivise operators to carry out the most extensive investment rollout in Nigerian history. The market is more mature now and the booming economy of the 2000s is a fading memory. Mobile phone, and broadband penetration are now at over 100 and 40 percent respectively, while the entire country is practically covered by 3G and 2G. The digital economy with the immense success of content creators, e-commerce, software education, financial inclusion, cross-border freelancing and social connectedness has been built on the back of the telecom industry’s investment priorities. The cost of providing existing services, the competitiveness required to sustain the continued rollout of 4G and eventually 5G technology and wider market dynamics have meant the current tariff structure is less a cushion for customers and more a shackle for operators." I argue in my latest long read for BusinessDay that it is time to rethink the tariff structure in Nigeria's telecoms industry. Regulators need to consider a data-driven and transparent tariff review that reflects the economic realities faced by the sector. It might be unpopular but it is necessary. Happy reading. https://lnkd.in/e6FaKv6Q

Unimpressive Q1 2024 Result: MTN Nigeria Committed to Stay Resilient Amid Challenging Operating Environment MTN Nigeria has expressed commitment to stay resilient amid tougher economic weather and a challenging operating environment after it delivered an unimpressive first quarter (Q1) result. The company recently released Q1 2024 results showed revenue of N752.9 billion, up 32.5% compared to N568.1 billion for the same period in 2023. However, it reported a pre-tax loss of N575.69 billion, a sharp reversal from the N162.9 billion profit reported a year earlier. Read more👇 #mtn #firstquarterreport #mtnnigeria #toucheconomicclimate Karl Olutokun Toriola Malan Naidoo Ruth Badoo Kabelo Ngwenya-Kalabamu Lynda Saint-Nwafor Kidochukwu Inegbedion Ifeoma Nkata Emetu Obafunmilayo Willoughby FCIS ACI Arb(U.K) Funmilayo Ayere (MCIPS)

The GSMA’s digital economy report references the 13.5% contribution to Nigeria’s GDP of the telecoms and broader ICT sector and the prospects for telecoms to catalyse growth across many other sectors.   “Greater digital adoption in Nigeria is key to unlocking enormous economic benefits,” said our Group President and CEO Ralph Mupita, adding that 5G networks in particular had the potential to transform economic activity.   However, macroeconomic conditions – including the sharp depreciation of the naira, elevated inflation and a shortage of foreign exchange – are making it hard for mobile operators to bring in the revenue needed to fund the investment to achieve universal broadband access goals while returning their finances to profitability.   MTN is encouraged by the interventions being undertaken in Nigeria to curb inflation and reform policies. However, the industry still faces challenges.   “Tariff increases are needed in Nigeria to sustain the industry, including the continued investment in digital infrastructure to grow the sector to the benefit of all in the country,” he said, adding that any adjustments would be made mindful of the pressure of the economic conditions on consumers’ disposable incomes.   “The industry would also benefit from a clear pricing framework to enable it to make decisions on capital allocation over the longer term.”   MTN Nigeria is undertaking a number of initiatives internally to manage costs, including capex, reduce its dollar exposure, restructure its tower leases and return to profit.     MTN Nigeria is MTN Group’s largest subsidiary, representing more than a quarter of total Group subscribers and contributing some 35% to Group service revenue. Read More : bit.ly/4ahkew8 GSMA digital economy report Nigeria: https://lnkd.in/dpuWhRnC #DoingGoodTogether

Depending on where you reside, you may have noticed that quality of telecoms services (call + data) have not been so good. The current economic reality is telling on the Telecoms sector. Early this year, listed Telcos, MTN Nigeria and Airtel Nigeria declared loses in billions of Naira - due entirely to exchange rate depreciation. Through 2023, the Naira lost at least 40% of its value, falling from N460/$ to N1250/$ today. MTN recently declared a pre-tax loss of N575.7 billion in Q1 2024. Many businesses have adjusted their menus. Manufacturing companies have raised the prices of their products (some others suspended production and other are shutting down and exiting). Services companies have also done the same. For example #DSTv and Electricity distribution companies (#Discos). No price has been spared, save for telecom tariffs. After about 11 years, Telcos, through their associations, are asking that like the #NERC granted Discos some price adjustment, the #NCC must allow them similar window to adjust prices to stem the tide. They argue that operating costs are priced in dollars against Naira revenues which have deteriorated over the last two years. They've also been hard-hit by the rising cost of fuel to power their towers and the costly damages to assets on the other hand. But Nigerians, the common people who have to bear the brunt of all of this, are the reason it is a tough call to make. While #devaluation has eroded the purchasing power of household income, an #inflation rate of 33% have confiscated another part of workers income. Where wages have not increased above the combined impact of devaluation and inflation, these broad price adjustments have been penalising of workers. Whilst it'd be great to hear the alternatives to how Telcos can reinvent and turn the corner, the regulators must agree to come to the table to deliberate the future of the sector with the stakeholders. Voice calls and data have become an integral part of our lives. We would not want the telecom sector to degenerate to the state of electricity in Nigeria. Already, MTN Foundation the good work it does, is already under threat. MTN Foundation is financed from 1% of the corporation profit. Therefore, no profit, no foundation! In the end, consumers are at the receiving end! TechCabal Insights TechCabal

MTN Group's operations in Ghana and Uganda emerge as key drivers of growth, showcasing promising results in their respective markets, according to the telecommunications giant's full-year fiscal report for 2023. CEO Ralph Mupita highlights the positive performance of both units, emphasizing their strategic positioning to capitalize on growth opportunities within their countries. Despite the success of Ghana and Uganda operations, MTN Group experienced a significant decline in earnings for the full year 2023, primarily due to the volatility of the Nigerian naira, which adversely impacted profitability. The group reported a notable decrease in headline earnings per share (HEPS), with adjusted HEPS also experiencing a decline, reflecting the challenges faced by MTN Nigeria, the most profitable market among the group's 19 markets. Mupita addresses the impact of the sharp devaluation of the naira on the reported results of both MTN Nigeria and MTN Group, underscoring the challenges posed by currency fluctuations in key markets. MTN Nigeria, in particular, reported a substantial loss after tax for the year ended December 2023, leading to negative retained earnings and total equity. Despite the financial hurdles, MTN Group highlights significant service revenue growth across key markets, with notable increases in service revenue for MTN Nigeria, MTN South Africa, and MTN Ghana. Other key metrics, including voice revenue, data revenue, and fintech revenue, also demonstrated positive growth, reflecting the company's resilience and adaptability in navigating challenges and seizing opportunities in the telecommunications sector. Overall, MTN Group remains focused on driving growth and innovation across its operations, leveraging its extensive subscriber base and expanding its portfolio of services to enhance its market position and deliver value to shareholders and customers alike. MTN Uganda #growth #ceo #revenue #hakunamatatamedia

Multichoice Nigeria loses 243,000 subscribers in 6 months, blames economy Multichoice Group, the South African Pay-TV operator, has revealed that its Nigerian unit, Multichoice Nigeria lost 243,000 subscribers across its DStv and GOtv services in the six months spanning April to September this year. The Group disclosed this in its Interim Financial Results for the six months ended 30 September 2024, which was released on Tuesday. According to the company, the high inflation in Nigeria at over 30% driven by the high cost of food, electricity, and fuel forced many of its customers to ditch their decoders. While the actual figure was not disclosed at that time, Multichoice had also declared the loss of 18% of its Nigerian subscribers in its financial report for the year ended March 2024. The company added that the pressure on its subscriber base in Rest of Africa Operations continued from the previous year leading to a loss of 566,000 subscribers across the operations in the six months under review. While noting that the subscribers lost in the last six months was a decline compared with the 803,000 lost in the previous six months, Multichoice revealed that two markets, Zambia and Nigeria accounted for the lion’s share of the loss. “With the Rest of Africa business having seen a decline of 803k subscribers in 2H FY24, this rate of decline slowed to 566k in 1H FY25. “Of this decline, 298k related to Zambia and 243k related to Nigeria, with remaining markets on the continent reflecting only a minor decline of 25k,” the company stated in its financial results. While inflation is blamed for the loss in Nigeria, the company attributed the loss in Zambia to drought-driven power outages of up to 23 hours a day. In his comments on the company’s results, MultiChoice Group CEO, Calvo Mawela, said the company is facing its most challenging operating conditions in almost 40 years. To generate returns, he said the Group has been proactive in its focus to ”right-size” the business for the current economic realities and industry changes. WhatsApp Facebook Twitter Email LinkedIn Reddit The post Multichoice Nigeria loses 243,000 subscribers in 6 months, blames economy appeared first on Akelicious.

++ MTN Nigeria Sees Revenue Growth but Faces Profit Challenges Amid Forex Impact ++ MTN Nigeria Communications Plc has reported its financial results for the nine months ending on September 30, 2024, showcasing a mix of growth in service revenue and active data users alongside challenges due to forex losses and regulatory impacts. "In the first nine months of 2024, we sustained the growth in our underlying operating performance – underpinned by our resilient business model and operational agility – despite challenging conditions. The inflation rate remained elevated amidst rising energy prices and naira depreciation. Inflation averaged 32.8% in the nine months (Q3 2024: 32.8%) compared to an average of 24.5% in 2023 (Q3 2023: 25.5%). To curb inflation, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 8.5pp to 27.25% during the period, resulting in higher funding costs, although this helped reduce volatility and improve liquidity in the forex market." - Karl Olutokun Toriola, CEO, MTN Nigeria #techafricanews #africa #nigeria #telecommunications #inflation #rate #depreciation #volatility #liquidity

𝐌𝐓𝐍 𝐍𝐢𝐠𝐞𝐫𝐢𝐚 𝐖𝐚𝐫𝐧𝐬 𝐨𝐟 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐒𝐡𝐮𝐭𝐝𝐨𝐰𝐧 𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐓𝐚𝐫𝐢𝐟𝐟 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞 “There should be no delusion; if the tariff doesn’t go up, we will shut down,” Karl Olutokun Toriola, CEO of MTN Nigeria, said during a tour of MTN’s facilities by Fellows of the Media Innovation Programme in Ibeju-Lekki, Lagos. For some time now, the telecom sector has been seeking tariff increases, saying operational costs and the economy have made them necessary. Foreign exchange losses from the naira devaluation and high inflation rates also accounted for the substantial loss of ₦519.1 billion MTN recorded in the first half of 2024 for the telco, which has about 78 million subscribers. The Nigerian banks also owe ₦250 billion, according to Toriola, for USSD services, and MTN might approach Nigerian regulators for permission to suspend the service if the debt is not settled. However, this development reflects the wider problems bedeviling Nigeria’s telecoms industry, with operators barely being able to maintain profitability in the face of economic headwinds and regulatory burdens. #TelecomCrisis #MTNNigeria #TariffHike #EconomicChallenges #NigerianTelecom

Key highlights from MTN Nigeria’s 9months financial report compared to the same period last year 33.7% increase in total revenue 238% increase in CAPEX 95.9% increase in OPEX 3335.4% increase in loss after tax Despite the country's challenging macroeconomic pressures, MTN Nigeria sustained strong revenue growth in the first nine months of 2024. However, high inflation and interest rates, including rising FX, are roadblocks to profitability. A decade ago, the telecoms sector contributed about 7% to GDP, by Q1 2024, the sector was on track to double that and contribute about 15% to GDP. However, this momentum may be truncated if investments in the sector is not sustained i.e. the magnitude of losses in the sector is a significant deterrent investment. The NCC needs to support the sector with policies that guarantee a path to profitability even as the telcos internally strategize in navigating the challenging macroeconomic conditions. The industry requires a tariff increase.