• Thursday, April 18, 2024
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BusinessDay

SIM-NIN: Telcos risks N242bn revenue on barred lines

SIM-NIN deadline: Why your telephone line may stop working after July 31

Telecommunication companies risk N242.77 billion in potential revenue after barring 40 million lines following the expiration of the February 28 deadline to link Subscriber Identity Module (SIM) with National Identity Numbers (NINs).

This is based on lost revenue per user following the inability of barred subscribers to make calls, use data, or any telecom service. The average revenue per user (ARPU) is the average revenue a telco generates on each active telephone user. This varies per network. Airtel put its ARPU at $2.8 per mobile subscriber, and MTN, as of 2023, reportedly put it at $5.03.

Using the available data for these two telcos, the average ARPU for the industry can be estimated at $3.92. According to the Association of Licensed Telecommunications Operators of Nigeria (ALTON), 40 million lines were barred after the February 28 deadline elapsed.

This would suggest a loss of $156.80 million (N242.46 billion at N1,548.25 per dollar). On Sunday, Gbenga Adebayo, chairman of ALTON, said: “I can also tell you that over 40 million lines have been blocked, and the affected customers are those who didn’t submit their NIN at all.”

He said while this number is alarming, more telecom subscribers will get blocked after March 29, 2024, in line with a December 2023 directive from the Nigerian Communications Commission (NCC). The directive asked telcos to bar lines whose NINs have been submitted but not verified by 29 March 2024 and bar those with less than five lines linked to an unverified NIN by 15 April 2024.

In its financial statement, MTN Nigeria disclosed that it disconnected 4.2 million lines after the February 28 deadline. It, however, noted that the revenue loss might be minimal.

It said: “We also had approximately 4.2 million lines disconnected for which the subscribers did not submit their NIN. Several of these lines were low-value subscribers, minimising the revenue impact.”

When the telcos first implemented a partial barring of lines in April 2022 in line with a NCC directive, Airtel disclosed that 8.5 million of its subscribers were affected.

It also highlighted that the outgoing voice revenues for those who have not yet linked their NIN and SIM accounted for 7 percent of its total revenues from Nigeria.

“As of the end of April 2022, we have collated NIN information for 35.9 million active customers. Outgoing voice revenues for those active subscribers who have not yet linked their NIN with their SIM amount to around 7 percent of total revenues from Nigeria, and around 3 percent of total revenues for the Group,” it said.

The impact of the SIM-NIN enforcement on telcos is still sketchy, but industry experts believe it will only be short-lived and will motivate subscribers to comply with the Federal Government’s directive to link their NINs to their SIMs.