In Nigeria, several publications have made the claim that operators have seen a decline in revenue due to OTTs (see here and here and here). The most common claim is that mobile operators lost over US$ 1 billion in revenue because of WhatsApp, WeChat, Viber, Skype and other OTTs. Following the evidence, the data shows that the opposite is true: the GDP contribution of the telecom sector has increased, subscriber numbers have grown and revenues of the largest two operators have grown. Airtel’s voice traffic increased by 20% in Q4 2019 and voice revenues have increased by 24% between June 2018 and December 2019. None of the claims of revenue loss caused by OTTs are backed by evidence. None of the journalists have corroborated their stories or provided accessible links to their data sources.

1. DID NIGERIAN OPERATORS
LOSE USD 1 BILLION IN
REVENUES TO OTTS IN
2019?
Dr. Christoph Stork & Steve Esselaar
Research ICT Solutions
4th February 2020

2. 2RIS

3. 3RIS

4. 4
Claims of gigantic losses in revenues due
to OTTs are frequent
RIS
http://broadcastingandmedia.com/news.php?
id=2791&vid=%25vid%25&mid=%25mid%25&cid=%25id%25&utm_source=newsletter&utm_campaign=#cpn%23&utm_medium=email
$8.7 billion - $7.6
billion = $1
billion, not $1
million

5. 5
Nigeria’s Telcos Call For Fair Regulation As OTTs
Bite Off $1 Billion in Revenue (370 billion Naira)
RIS
■ Revenue losses of US$1 billion in 2019 as Airtel, MTN, 9Mobile and Globacom earned
about $7.6 billion from airtime sales and others. The figure compared to $8.7 billion in
the corresponding period of 2018
https://www.nigeriacommunicationsweek.com.ng/angst-as-otts-bite-n370bn-off-telcos-revenue/
■ Operations of the Over the top (OTT) players, including WhatsApp, WeChat, Viper,
Skype, Google, have slashed about $17.8 (81%) from the Average Revenue per User
(ARPU) of the Mobile Network Operators in the country within the last 13 years
https://guardian.ng/business-services/whatsapp-other-otts-slash-81-of-operators-revenue-in-13-years/
■ Glo, MTN & Others To Lose $386Bn To Whatsapp & Other OTT Voice Apps By 2018
http://blog.webkraftng.com/glo-mtn-others-lose-386bn-whatsapp-ott-voice-apps-2018/
■ CTO mulls new business model for telcos over $386bn loss
https://naija247news.com/2018/07/20/cto-mulls-new-business-model-for-telcos-over-386bn-loss/
■ Angst as OTTs bite N370bn off Telcos revenue
https://guardian.ng/technology/angst-as-otts-bite-n370bn-off-telcos-revenue/

6. 6RIS
WHAT DOES THE
EVIDENCE SAY?

7. 7
Nigeria’s telecommunication
sector is booming
RIS
Nigeria’s telecommunication sector contribution to GDP
% contribution to GDP Average Nigeria GDP in
billion USD
Telecom Sector
in billion USDQ1 Q2 Q3 Q4
2019 10.11% 11.39% 9.20% 10.23%
2018 9.19% 10.43% 8.39% 9.85% 9.47% 397.3 37.6
2017 9.16% 9.50% 7.41% 8.66% 8.68% 375.7 32.6
Source NCC World Bank
■ The telecom sector contributed around 8.7% to GDP or USD 32.6 billion in 2017
■ In 2018 that increased to 9.9% or USD37.6 billion
■ In 2019 the share of GDP increased every quarter compared to 2018 and 2017. The
telecom sector is on track to contribute over 10% for 2019 (Q4 2019 results are not
available yet). The claim that the sector lost USD 1 billion is extremely unlikely.
■ It is far more likely that the sector had a record year.

8. 8
Subscriber numbers are growing
RIS
Mobile subscriber in million (NCC)
2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Change
Airtel 45.0 45.0 45.2 45.4 45.6 45.9 46.8 47.9 48.9 49.1 49.7 50.2 11.6%
9mobile 16.4 16.7 16.8 16.7 16.4 16.0 15.7 15.6 15.3 14.8 14.2 13.6 -16.8%
Globacom 45.6 46.0 46.2 46.4 46.5 46.6 46.7 47.3 49.2 50.3 51.1 51.7 13.4%
MTN 66.7 65.6 65.0 64.7 64.8 65.3 65.3 65.7 65.3 65.9 67.4 68.8 3.1%
Total 173.6 173.3 173.3 173.3 173.3 173.8 174.6 176.5 178.8 180.0 182.3 184.3 6.1%
MoM % -0.2% 0.02% -0.03%0.01% 0.27% 0.46% 1.12% 1.29% 0.68% 1.28% 1.09%
Subscriber numbers increased by 6.1% overall in 2019: Airtel, MTN and Globacom increased
their subscribers while 9mobile is the only operator that lost subscribers

9. 9
Airtel Nigeria’s revenue and voice traffic is
increasing
RIS
Airtel Nigeria’s KPIs (Source: Airtel Investor Relations)
Parameters Unit Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Revenues
Total
US$ Million 255 263 285 301 311 327 355
QoQ % 3.1% 8.4% 5.6% 3.3% 5.1% 8.6%
Voice US$ Million 176 177 190 201 198 200 219
Data US$ Million 54 59 67 80 94 106 116
Minutes on network
US$ Million 14,396 14,592 15,368 15,878 15,809 15,687 18,812
QoQ % 1.4% 5.3% 3.3% -0.4% -0.8% 19.9%
EBITDA US$ Million 116 129 143 161 167 174 194
EBITDA margin % 45.7% 49.0% 50.1% 53.4% 53.3% 53.1% 54.7%
■ Revenues increased in each quarter since June 2018
■ Voice traffic also increased except small drops in Q2 and Q3 of 2019, followed by a
massive jump of 20% in Q4 2019.
■ EBITDA margin grew to a record 54.7% in Q4 2019.

10. 10
MTN Nigeria’s financial
performance is phenomenal
■ Revenues have increased by 17% and profit by 80% between 2017 and 2018 (2019
not released yet)
■ MTN Nigeria’s ROE is very high at 66.4 cents return for every dollar invested in 2018
■ MTN is highly leveraged, the share of liabilities to assets dropped in 2018, which
explains the lower ROE in 2018 compared to 2017
RIS
Audited Financial results for MTN Nigeria Group in N’000
MTN Group 2017 2018 Incr. YoY
Revenues 887,180,480 1,039,117,810 17.13%
Net Profit 81,070,221 145,685,901 79.70%
Assets 969,607,853 941,739,620 -2.87%
Liabilities 856,755,935 722,387,305 -15.68%
Shareholders Equity 112,851,918 219,352,315 94.37%
ROE 71.8% 66.4%
Financial Leverage 8.6 4.3
Share of liabilities of total assets 88.4% 76.7%

11. 11
MTN Nigeria’s revenue trend is
upwards not downwards
RIS
MTN Nigeria - Revenue in Naira billion (Local ARPU * Subscribers)
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
90.491.089.3
83.682.381.4
77.5
70.8
62.2
68.568.2
63.364.1
61.5
59.0
62.1
65.767.467.065.665.767.469.1
63.963.563.9

12. 12RIS
CONCLUSION

13. 13
Hysterical claims that operators have ‘lost’
revenue due to OTTs are not based on facts
■It is puzzling why some organisation’s make hysterical claims that can be proven wrong with
easily accessible, publicly available data. The facts are:
■Overall subscriber numbers grew
■GDP contribution of the telecom sector continues to increase in USD and as a % of GDP
■Revenues of Airtel and MTN continues to grow
■Return on equity (ROE) of MTN is phenomenal
■Airtel's EBITDA margin is above 50%
■Airtel’s voice traffic and voice revenues continues to grow
■Data revenues of both MTN and Airtel is growing strongly
■None of the claims of revenue loss caused by OTTs are backed by evidence. None of the
journalists have corroborated their stories or provided accessible links to their data sources.
RIS

14. 14
STEVE ESSELAAR
PARTNER, RIS
MBA
DR. CHRISTOPH STORK
PARTNER, RIS
PHD, ECONOMICS
www.researchictsolutions.com
+27 84 999 000 2
christoph@researchictsolutions.com
www.researchictsolutions.com
+1 778 865 5695
steve@researchictsolutions.com
Research ICT Solutions