Nigeria is losing its status as the top-earning market for telecommunication companies, as average revenue per user (ARPU) declined by 38.79 per cent year-on-year to $1.89 at the end of 2024 from $3.08 in 2023.
The drop is largely attributed to the continuous naira’s depreciation against the dollar.
According to BusinessDay, the naira has lost about 70 per cent of its value since a June 2023 devaluation crashed the currency from ₦470/$ to ₦1528/$, affecting the financial performance of businesses operating in the country and contributing to record losses.
“Revenue in naira has stopped growing as the number of subscribers has increased. Falls in ARPUs indicate pressure on prices and reductions in average usage,” noted GSMA, the global body for telecom operators.
Historically, Nigeria was the largest revenue contributor for multinational telecom operators like MTN Group and Airtel Africa. However, steep foreign exchange losses due to the naira’s volatility have eroded investor dividends and pushed Nigeria down the earnings’ rankings.
MTN Nigeria, which once led as MTN Group’s highest revenue-generating subsidiary, has slipped behind MTN South Africa. Despite recording its highest-ever revenue of ₦3.36 trillion, its ARPU fell to $2.17 in the last quarter (Q4) of 2024, a 35.42 per cent drop from $3.36 in Q4 2023.
The company, part of the MTN Group, which operates in 16 countries, has seen its position as the group’s top market (with a $5.03 ARPU in Q1 2023) fall to 11th place ($2.17 ARPU) in Q4 2024.
In naira terms, ARPU grew by 52.73 per cent to ₦3,542 in Q4 2024 from ₦2,319.20 in Q1 2023. However, this growth was negated by the naira’s depreciation from ₦907.1/$ in 2023 to ₦1,535/$ by the end of 2024.
Airtel Nigeria has also struggled, with its ARPU falling to $1.6 in December 2024, a 75 per cent decline from $2.8 seen in the same period in 2023. This figure now falls below Airtel Africa’s regional average of $2.6, highlighting Nigeria’s weakened profitability within the group. Revenue for Airtel Nigeria fell 40.34 per cent year-on-year to $738 million for nine months ended December 2024.
