Airtel vs. MTN: The intensifying battle for Africa’s telecom market
Airtel and MTN are two of the largest telecommunications companies in Africa, and their rivalry is fierce. The two companies are constantly competing for market share, customers, and investment.
From the very beginning, both companies have contended toe-to-toe for revenue, for-profit and a customer base, rivalling the peak of Africa’s telecom space.
“The rivalry between this telecom giant is a scramble for subscribers, they want more subscribers on their various networks, but however, it’s a healthy competition,” Adeolu Ogunbanjo, President of the National Association of Telecommunication Subscribers said.
The latest development in the rivalry between the two firms is the mobile money business.
The two firms are increasingly competing in the mobile money business, as they have yet to reach the vast majority of unbanked Nigerians.
This fierce competition is not limited to Nigeria but extends across the African continent.
MTN has expanded its mobile money services to numerous African countries, including Ghana, South Africa, Kenya, and Uganda. Airtel has also made significant inroads, operating in countries like Zambia, Tanzania, and Rwanda.
Telcos lead mobile money in many markets across the African continent. Safaricom’s M-Pesa controls the market in Kenya and other parts of East Africa. MTN wins in most markets in West Africa and many other regions on the continent. Airtel Money follows MTN closely in some markets.
In terms of market share in West Africa, MTN has the highest share in Zambia, Rwanda, Malawi and Uganda, with Airtel vying for second place.
Data gleaned by BusinessDay from the Nigerian Communications Commission (NCC) shows that MTN Nigeria has continued to give the other mobile networks a run for their money, snagging 85.34 million subscribers as of July 2023 to lead the pack.
MTN also holds the largest market share of the Nigerian telco market, with 38.70 percent as of July 2023, in third place Airtel, with a market share of 27.24 percent.
Airtel is headquartered in India, while MTN is headquartered in South Africa. Both companies have a presence in over 15 African countries.
According to Airtel Africa’s financial report, the total customer base grew by 8.8 percent to 143.1 million, as the penetration of mobile data and mobile money services continued to rise, driving a 22.0 percent increase in data customers to 56.8 million and a 24.3 percent increase in mobile money customers to 34.3 million.
On the other hand, the Yellow Network, established in 2001, has also recorded remarkable growth.
According to MTN Nigeria’s first-half financial report ending June 2023, it recorded revenue growth of 21.96 percent to N1.15 trillion from N950 billion in the same period last year.
Mobile Money Showdown
According to Tekedia, Africa currently owns 70 percent of the global mobile market. The mobile money industry remains one of the fastest-growing sectors of the African economy.
MTN and Airtel have been battling for supremacy in Africa’s mobile money sector, with Nigeria as a significant battleground. Both companies are aggressively expanding their mobile money services and investing heavily in marketing and customer acquisition.
In 2022, MTN Nigeria’s fintech subsidiary, MoMo Payment Service Bank (MoMo PSB) Limited, and Airtel Africa’s subsidiary, SmartCash PSB, began operations. However, these PSBs won’t provide all banking services, such as lending or foreign exchange transfers.
With an estimated 40 million unbanked adults in Nigeria, particularly in rural areas, access to these financial services is expected to increase significantly.
MTN Group’s fintech business was recently valued at $5.2 billion following a minority stake the telecommunication company sold to Mastercard.
Airtel Africa reported a 31.2 percent constant currency growth in mobile money revenue, while MTN’s Nigeria noted that revenue from mobile money transactions reached N41.3 billion in the first half of 2023, up from N39.2 billion in the same period in 2022.
In the first quarter of this year, MTN’s active MoMo PSB wallets rose by 1.2 million to 3.2 million, accounting for 43.2 percent of its fintech users.
Airtel aimed to target 36.8 percent of unbanked adults through its Smartcash PSB.
A report by CardinalStone highlights mobile money’s growing prominence in the Sub-Saharan African economy, accounting for about 70.0 percent of the $1.0 trillion global transactions, outpacing regions like Asia ($156.3 billion) with higher mobile money penetration.
“In our view, the growing smartphone penetrations in Africa have provided a big push for mobile money growth. GSMA estimated Sub-Saharan Africa smartphone adoption at 49.0% (projected to reach 61.0% by 2025),) CardinalStone said.
Intensifying Data Services Rivalry
MTN Nigeria recorded a data revenue of N469.4 billion in the first half of 2023 compared to N348.2 billion in the same period last year while Airtel Africa recorded data revenue of $486 million in the same period this year compared to $418 million in the comparable periods last year.
Airtel Nigeria’s data usage per customer increased by 24.5% to 5.7 GB per month (from 4.6 GB in the prior period.
Aside from data, Airtel Africa’s revenue from voice grew by constant currency growth of 1.8 percent slower than the 13.6 percent voice revenue growth of MTN N.
Airtel Africa recorded a voice revenue of $621 million in the first half of 2023 compared to $610 million in the same period last year while MTN recorded a voice revenue of N474.1billion in the same period this year compared to N417.2 billion in the comparable periods last year.
Airtel and MTN are also offering broadband services, such as fibre optic internet. This is a newer market, but it is growing rapidly. Both companies are investing in this market to stay ahead of the competition.
Both companies are heavily investing in network infrastructure upgrades, including the rollout of 4G and 5G technologies, to provide faster and more reliable data services.
Airtel in second place joined MTN which already has 5G footprints in 13 cities across the country.