DIGITAL ADOPTION OF TELECOMMUNICATION BUSINESSES AND RELATIONSHIP WITH NET SALES PERFORMANCE IN AFRICA: INSIGHTS FROM NIGERIA

Abstract

The mobile telecoms market in Africa is highly competitive and have significant footprint hence the focus on these sectors. The impact of digital adoption was assessed on the performance of MTN Nigeria Communications Plc and Airtel Africa Plc, which are two mobile communication providers that are listed on the Nigerian Exchange Group as of 2023 an important market in Africa. An Ex Post Facto research design was adopted and secondary data were obtained from official company financial statements, the Nigerian Communications Commission, and another reliable information source for the period of 2018 to 2023. The Pearson’s Correlation Coefficient test was used to establish the level of relationship between the independent variable, namely, revenue from digital payment channels, with the dependent variable, namely, net profit. From the above analysis, it can be deduced that the digital payment revenue of MTN Nigeria was on average at ₦44.8 billion while that of Airtel Africa was ₦45 billion with moderate volatilities. However, the net profit for both companies showed much variance due to operational and external influences it was also higher at ₦213.225 billion and ₦226.8 billion respectively. The Pearson coefficient in correlating digital payment revenue and net profit is 0.969 for MTN (signifying significance at a confidence level of 0.031) and 0.859 for Airtel but this is insignificant at a confidence level of 0.141 due to the small sample size. The analyses also highlight the significance of digital payment channels as a key to profitability. It is clear that though net profit was fluctuating more significantly, the increase in digital payment revenue indicated stability and the potential it has for steady income generation. The study suggests more focus on building the infrastructure for digital payments, the use of AI and blockchain, and extending Branchless Banking for bettering revenues and profitability. Other critical factors include operational efficiency and management of strategic actions to changes in economic policies and global markets. This work shows the significance of the research focusing on the impact of digitalization in the telecommunication sector and its implications for the key players