The total number of telecommunication companies’ mobile voice subscribers declined in November 2020 for the first time since April 2019, according to the latest data from the Nigeria Communications Commission (NCC), amid regulatory headwinds.
The total number of subscribers dropped by 46,648 to settle at 207.531 million in November 2020 from 207.578 it recorded in October.
Investors seem to have shrugged off the negative news as shares of MTN Nigeria and Airtel, two of the largest telcos in Nigeria, have been unchanged since the data first hit the market last Friday. MTN closed at N165 per share on Wednesday while Airtel Africa closed at N851.80, which is the level where they have both been since the start of the year. Investors traded 12.76 million MTN shares on January 13, the most this year, according to Bloomberg data.
Although the 46,648 subscriber number drop may seem small compared to the 302,448 subscribers the market lost in April 2019, the telecoms sector had been projected by many experts as one of the few sectors that will survive the difficult times brought to bear by the ravaging COVID-19 pandemic without a scratch.
These experts however say a barrage of regulatory pronouncements that halted business activities intermittently are beginning to catch up with operators in the sector.
Gbenga Sesan, executive director of Paradigm Initiative, a platform that delivers information and communications technology (ICT) to the underserved in West Africa, told BusinessDay that the subscriber decline started from September 2019, when the minister of communications and digital economy, announced that operators should deactivate improperly registered SIM cards. The decision led to the deactivation of almost 7 million SIMs by March 2020.
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Africa’s largest telco, MTN, took the spotlight as its market share declined in November, taking with it over 1.3 million voice subscribers. It is the third consecutive time the South African telco is losing market share and the second time in that period it failed to record new voice subscribers. The market share dropped to 39.52 percent in November from 40.14 percent and 40.34 percent recorded in October and September.
“An operator with the largest number of SIMs will suffer the most because the chances that they have more incompletely registered SIMs are higher. If everyone loses 1 percent, the operator with 1 million will lose 10,000 while the one with 10 million will lose 100,000,” Sesan said.
MTN Nigeria’s stock price has been in decline since December, when the government ordered telecoms operators to stop registering new SIM cards pending when it concludes an audit of their activities. The ban has since been lifted in January, but consumers say operators are yet to start attending to them.
BusinessDay also reported last week how they were being turned back despite having urgent needs to reactivate their SIMs.
Nevertheless, Olusola Teniola, Nigeria national coordinator for Alliance for Affordable Internet (A4AI), suggests that MTN’s voice decline could be a result of a strategy to increase investment in its data business.
“In the case of MTNN the voice subscription decreases represent a substitution with OTT applications replacing their offering to a degree that exceeded the data subscription switch over. This also is reflected in their drop in market share both in subscription numbers and revenue,” Teniola said.
The NCC voice data however had some upside. Airtel, for instance, was the market leader in November when it took its market share from 27.08 percent to 27.58 percent to consolidate its position as the second-largest operator in Nigeria. The telco welcomed 1.01 million subscribers to take its subscribers number to 51.231 million in November from 56.214 million in October.
9Mobile also increased its market share in November to 6.35 percent from 6.24 percent in October. During the time it saw 234,938 subscribers join its network. The fourth-largest telco is the first operator to launch a mobile money service in Nigeria after its PSB licence was approved by the Central Bank of Nigeria. This may have contributed to its significant gain in November.
Globacom made a small market share moving to 26.58 percent November from 26.55 percent in October. It managed to add 10024 subscribers to bring its total to 55.089 million from 55.079 million within the period. Like 9Mobile, Globacom has a PSB licence, but it is yet to launch mobile money operations.
“As the market continues to migrate from voice to data and/or digital services switching of services in between all operators will increase across product lines based on competitive offerings that are viable alternatives to the market leader’s offerings,” Teniola said.
