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