Mobile money, data drive MTNN, Airtel results

Telecom giants, MTN Nigeria and Airtel Africa, have reported impressive growth in their third quarter and half-year earnings, with significant gains in service revenues from mobile money and mobile data services. Oyinkansola Samuel, a Research Analyst at RMB Nigeria, joined CNBC Africa to provide insights into the financial performance of these companies. MTN's results showed solid top-line performance with double-digit growth in voice, data, and digital services. Although FinTech growth was slightly muted, the overall performance was strong. However, the company faced challenges due to currency weakness, resulting in a net finance loss of about 230 billion Naira and a contraction in EBITDA margins. Despite these hurdles, MTN's data revenue surpassed voice revenue for the first time, indicating a promising growth trajectory in the data segment. The company's mobile money service also showed potential with the addition of 2 million new active wallets in the nine-month period. While tariff adjustments are anticipated to support revenue growth, MTN remains optimistic about maintaining strong demand even with tariff increases. On the other hand, Airtel Africa reported a robust operating performance, particularly in EBITDA margins, which expanded by 72 basis points. However, the company faced FX headwinds, leading to a 471 million USD FX loss and a 13 million USD loss for the reported period. Despite these challenges, both MTN and Airtel are eyeing the Nigerian market for growth opportunities, given the low data penetration rates and untapped mobile money potential. Mobile money services, in particular, are expected to drive long-term growth for both companies. While FX risks pose short-term concerns, the overall outlook for telcos in Nigeria remains positive, with a focus on data and mobile money services as key revenue drivers. Both MTN and Airtel are looking to replicate the success of mobile money operations in East Africa in the Nigerian market. As they navigate the effects of currency weakness and tariff adjustments, these telecom giants are banking on the resilience of consumer demand for data services. With an optimistic long-term view, both companies are primed for growth in the evolving Nigerian telecom landscape.