Telcos Lose over 4.2m Subscribers and N10bn Revenue to NCC’s Sim Registration Ban
Nigerian telco operators are beginning to feel the negative impact of the Nigerian Communications Commission’s (NCC) temporary embargo on registration and activation of new Subscribers Identification Module (SIM) cards in the country.
According to the recently released industry stats, MTN, Airtel and other Telco’s lost over 4.2 million subscribers in the month of January. This follows an earlier loss of about 3.3 million subscribers after the ban was placed in December 2020.
Nigeria’s Mobile subscribers drop below 200 million
The suspension, which took effect on December 15, 2020, hindered telecoms operators from activating new SIM cards or replacing damaged/missing SIM of subscribers. Also, subscribers were unable to port to other networks.
This caused the total number of GSM subscribers in the country to drop below 200 million for the first time since July 2020.
A breakdown shows that MTN remains the market leader but all telcos recorded losses for the second consecutive month.
MTN recorded 79.03 million mobile subscribers in January, losing a net 1.73 million subscribers from a total of 80.76 million recorded in December 2020.
This is the first time the total number of MTN Subscriber will drop below 80 million since July 2020
After the initial drop of 3.3 million in December, MTN reported that the impact of the suspension on its operations was minimal. However, with the numbers piling up MTN will significantly start to feel the effects of the ban.
Of all the telcos, Airtel lost the largest amount of subscribers. The company lost over 2.2 million subscribers to fall below Globacom on the Telco market. Airtel now has 53.4 million subscribers.
Globacom, on the other hand, lost just 250,000 subscribers to bring its total subscribers at end of the month to 54.59 million. 9mobile lost the least amount of subscribers, its numbers dropping just 180,000 to 12.80 million subscribers in January.
Internet subscribers hit 150 million
Similar to mobile subscribers, all 4 major mobile operators also reported loses in internet subscribers in January. This brings the total number of internet subscribers in the country to 150.89 million after an all-time high of 154.4 million in Nov 2020.
MTN was the biggest internet losers of the month. The telco lost 1.37 million internet subscribers to bring its total to about 63.98 million. Airtel followed closely, losing 1.25 million subscribers to bring its total to 40.03 million during the month.
After being the only telco to record growth in December, Globacom internet subscribers numbers finally fell in January. The effect of the SIM suspension cost the operator about 110,000 subscribers to bring its total internet subscribers to 39.9 million.
9mobile also fell by 240,000 to hit a five year low of 6.88 million subscribers in January.
The last time 9mobile had below 7 million internet subscribers was in December 2014, when it recorded 6.19 million subscribers
Over 6 billion revenue lost
Examining the financial implication of the ban based on the industry Average Revenue Per User (ARPU) of N1,420 for 2020, the 4.2 million subscribers lost will have contributed a total of about N6 billion to telecom operators in January.
ARPU obtained from the Association of Telecommunications Companies of Nigeria (ATCON) is defined as the total revenue divided by the number of subscribers. It is a measure used primarily by consumer communications, digital media, and networking companies.
For the two-month period since the beginning of the ban, the total calculated loss rose above N10 billion. This means that the combined total of 7.6 million subscribers lost between December 2020 and January 2021 adds up to about N10.8 billion in revenue.
Nigeria’s Broadband penetration drops below 45%
Broadband penetration in the country didn’t escape the effects of the suspension, dropping to 42.9% after losing 2.09% in the month of January.
This is the first time broadband penetration has dropped below 45% since September 2020
The number of 3G and 4G subscribers also dropped to 81.9 million from 85.9 million in the previous month.
Summary
Since the NCC halted the registration and activation of new SIM cards in December 2020, telecommunications operators have recorded a loss of 7.6 million subscribers within two months.
While the suspension enforced to integrate NIN to all SIMs currently in use is understandable, a prolonged embargo could have a drastic effect on operators and the industry at large as seen in the report.
The best bet as things stand is to open up sim registrations at a controlled pace and maybe with new regulations like NIN. Because waiting for the whole process to be completed with the continuous extension of deadlines will mean the embargo will last for months and the damages could be more severe.
