Telcos face 6 months of losses on SIM registration freeze

Nigeria’s telecoms industry is now looking at six months without subscriber growth in voice and data and billions of naira in revenue losses.

Nigeria’s minister of communications and digital economy had on Friday announced the extension of the period of the NIN-SIM linkage from April 6 to May 6, 2021. The decision was taken following the compilation of the progress of the exercise so far. There are only about 51 million people that have been assigned National Identification Numbers (NINs).

There are many people who have enrolled and are in the process of being assigned NINs, a statement from the Nigeria Communications Commission (NCC) noted. The commission also said with each individual having an average of 3 to 4 SIMs, the total number of SIMs tied to NINs would be close to the total number of registered SIMs in the country.

The government is hoping the exercise would help reduce insecurity in the country.

According to chairman of the Economic and Financial Crimes Commission (EFCC), the NIN-SIM linkage would support the Federal Government in checkmating the activities of fraudsters and cybercriminals.

The extension however leaves the telecoms industry with more losses.

BusinessDay had reported that the sector had seen more than 11.74 million subscriptions wiped off since the order was given by the government to freeze SIM registration until an audit of the industry is concluded, in December. Barring any last-minute change, the extension is most likely to accelerate losses in the industry by almost 20 million, which could translate to a revenue loss of N28.4 billion when multiplied by the average rate per user (ARPU) at N1,420.

“I’ve never seen anyone driving backward like the current administration. Putting a cap on business growth for telcos (an industry that is the cash cow) at a tap when the unemployment rate is >30 percent all in the name of NIN; you wake up every day and you are tired,” Oluyomi Ojo, founder of Printivo, said.

The drop means that the sector, which in the past has led the most GDP contributions to the Nigerian economy, has drained operators of N16.6 billion in revenue in the space of four months.

The freeze on SIM registration has also exacerbated job losses in the industry. The job losses not only affect the industry directly, it also extends to the businesses on the value chain. For instance, small businesses that buy, register, and sell SIM cards to end-users have been finding it difficult to cope since the order was given.

Some of the businesses that were engaged by telcos to distribute their products have mostly been disengaged, according to sources, leading to job losses.

Also, there are many tech businesses that require data SIM for voice calls or text messages, according to Deji Ogundiran, an expert in tracking devices, which may have to shut down as a result of the continued freeze of SIM registration.

“Some of the tech businesses in the categories are IoT device manufacturers and installers; equipment trackers; car trackers; POS terminals and many others that I do not know. As these businesses are unable to get data SIM cards, we are not able to make new sales and deployments and this is putting our businesses to sleep,” Ogundiran said.