Airtel’s Africa’s financial review for the quarter ended 30 June 2024, has revealed that the Group’s mobile services revenue grew by 17.4% in constant currency, with voice revenue growth of 9.5% and data revenues increasing by 26.4% over the period.
In Nigeria, constant currency mobile services revenues increased by 33.2%, whilst East Africa saw 19.7% growth and Francophone Africa increased by 3.6%. Mobile money revenue grew by 28.4% in constant currency, primarily driven by continued strong growth in East Africa.
Meanwhile, reported currency revenue growth was particularly impacted by significant currency devaluations in Nigeria, Malawi, Zambia and Tanzania. In particular, the naira devalued from a weighted average NGN/USD rate of 503 in the prior period to NGN/USD 1,384 in the current period.
In East Africa revenue grew by 6.5% in reported currency to $423m, and by 19.7% in constant currency. The constant currency growth was made up of voice revenue growth of 12.4%, data revenue growth of 25.7% and other revenue growth of 38.2%.Voice revenues were supported by both customer base growth of 10.8% and voice ARPU growth of 1.2%.
The customer base growth was largely driven by expansion of both increased network coverage and the increasing scale of the distribution network. Voice ARPU were impacted by the interconnect rate reduction in Kenya, Tanzania and Rwanda.
Data customer base growth of 14.6% and data ARPU growth of 7.1% drove the strong performance in data revenues. Our continued investment in the network and expansion of 4G network infrastructure resulted in 97.6% of our East Africa network sites on 4G, compared to 90.4% in the prior period. Furthermore, 871 sites are 5G enabled in four markets. In Q1’25, total data usage per customer increased to 5.5 GB per customer per month, up by 22.2%.
EBITDA increased to $198m, up by 1.3% in reported currency and up by 14.5% in constant currency. EBITDA margin at 46.7%, declined by 240 basis points as a result of rising fuel prices in several of our key markets.
The operating free cash flow was $121m, up by 1.3% in constant currency, due largely to EBITDA growth, partially offset by increased capex.
The differential in growth rates (between constant currency and reported currency) is primarily contributed by the devaluation in the Zambian kwacha, the Malawian kwacha, and the Tanzanian shilling, partially offset by the Kenyan shilling appreciation.
In Francophone Mobile service, Revenue grew by 2.9% in reported currency and by 3.6% in constant currency. Slowdown in revenue growth is mainly due to high inflation in key markets impacting consumer spend, although customer growth remained robust across the region.
Voice revenue declined by 1.7% in constant currency, as customer base growth of 10.3% was more than offset by a decline in voice ARPU.
Voice ARPU was negatively impacted by an interconnect rate reduction in Congo B and Niger while the customer base growth was supported by the expansion of both network coverage and distribution infrastructure.
Data revenue grew by 15.2% in constant currency, supported by customer base growth of 16.0%. Our continued 4G network rollout resulted in an increase in total data usage of 44.4% and per customer data usage increase of 23.2%. Data usage per customer increased to 4.8 GB per month (up from 3.9 GB in the prior period).
EBITDA at $114m, declined by 12.7% and 12.2% in reported and constant currency, respectively.
The EBITDA margin declined to 37.1%, a decline of 666 basis points, impacted by an increase in fixed frequency fees in a key market, rising energy costs combined with a slowdown in revenue growth in key markets.
Operating free cash flow was $91m, declined by 8.1% in constant currency, due to the decline in EBITDA, partially offset by lower capex.
Overall revenue from mobile services declined by 19.4% in reported currency with growth of 17.4% in constant currency. The constant currency growth was evident across all regions and services. Mobile services revenue grew in Nigeria by 33.2%, in East Africa by 19.7% and in Francophone Africa by 3.6%, respectively.
Voice revenue grew by 9.5% in constant currency, supported primarily by the continued growth in the customer base as we continue to invest in our network and enhance our distribution infrastructure. The voice ARPU growth of 0.6% was supported by an increase in voice usage per customer of 3.0%, reaching 290 minutes per customer per month, with total minutes on the network increasing by 12.2%.
Data revenue grew by 26.4% in constant currency, driven by both customer base growth of 13.4% and data ARPU growth of 9.6%. The customer base growth was recorded across all the regions supported by the expansion of our 4G network. 95.8% of our total sites are now on 4G, compared with 90.6% in the prior period. 5G is operational across five countries, with 1,106 sites deployed. Data usage per customer increased to 6.2 GB per customer per month (from 4.9 GB in the prior period). Data revenue contributed to 41.5% of total mobile services revenue, up from 39.7% in the prior period.
EBITDA was $438m, down 28.2% in reported currency, and up by 7.7% in constant currency. The EBITDA margin declined by 547 basis points to 44.4%, a decline of 399 basis points in constant currency, due largely to higher inflationary pressures on the cost base.
Operating free cash flow was $300m, up by 9.2% in constant currency, due to the increased EBITDA, partially offset by higher capex.
For mobile money, revenue grew by 10.1% in reported currency, with constant currency growth of 28.4%. The constant currency mobile money revenue growth was driven by revenue growth in both East Africa and Francophone Africa of 31.7% and 18.4%, respectively. In Nigeria, we continue to focus on customer acquisitions with 1 million of active customers registered for mobile money services at the end of June 2024. Additionally, we added almost 125,000 agents during the year reaching over 192,000 agents as of 30 June 2024.
The constant currency revenue growth of 28.4% was driven by both our customer base growth of 14.9% and mobile money ARPU growth of 8.8%. The expansion of our distribution network, particularly our exclusive channels of Airtel Money branches and kiosks, supported customer base growth of 14.9%. The mobile money ARPU growth of 8.8% was driven by transaction value per customer growth of 9.0% in constant currency, to $258 per customer per month.
Annualised transaction value amounted to over $120bn in reported currency, with mobile money revenue contributing 19.2% of total Group revenue during the quarter ended 30 June 2024 as compared to 14.6% in the prior period.
EBITDA was $118m, up by 15.0% and 34.0% in reported and constant currency, respectively. The EBITDA margin reached 53.5%, an improvement of 223 basis points in constant currency and 229 basis points in reported currency, driven by continued operating leverage.
The differential in growth rates (between constant currency and reported currency) is primarily the result of devaluation in the Zambian kwacha, the Malawi kwacha, and the Tanzanian shilling.
However, Airtel’s total customer base grew by 8.6% to 155.4 million. Data customer penetration continues to rise, driving a 13.4% increase in data customers to 64.4 million. Data usage per customer increased by 25.1% to 6.2 GBs, with smartphone penetration increasing 4.7% to reach 41.7%.
Mobile money subscriber growth of 14.9% reflects our continued investment into distribution to support increased financial inclusion across our markets. Transaction value increased by 28.7% in constant currency with annualised transaction value of $120bn in reported currency.
Data ARPU growth of 9.6% and mobile money ARPU growth of 8.8% in constant currency continued to support overall ARPU’s which increased 9.3% YoY.
Customer experience remains core to our strategy with sustained network investment driving increased capacity and coverage. Data capacity across our network has increased by 33% with the rollout of almost 3,000 sites and over 5,600 kms of fibre.
Launched a comprehensive cost efficiency programme to identify specific cost reduction initiatives across the Group. Steps taken include the optimisation of network utilisation and design, introducing energy saving initiatives to reduce network costs and the renegotiation of key contracts, whilst ensuring future growth ambitions remain protected. We anticipate the full benefit of this programme to accrue over the year ahead.
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