Telcos suffer biggest subscriber loss in 8 years

Telecommunication operators in Nigeria continued to count losses in January as over 4 million subscribers left the various networks as the order to suspend new SIM registration enters the third month.

The over 4 million subscribers that exited is the highest since the Nigeria Communications Commission (NCC) began to release the industry data in May 2014. The loss also brings the total number of mobile subscriptions to 199.86 million in January from 204.149 million recorded in December.

The telcos have had to freeze activity on new SIM purchases, registration, and replacement since the NCC gave the order on 9 December 2020. The objective of the order, the NCC said, is to verify and ensure compliance by Mobile Network Operators (MNOs) with the set quality standards and requirements of SIM Card Registration as issued by the Federal Ministry of Communications and Digital Economy and the commission.

That directive means telecom operators have not acquired new subscribers since December 2020 and Nigerians who have lost their SIM cards are unable to retrieve them because the service is not available. The industry which was a top performer in the recently released Q4 GDP results has now seen a decline in subscriber numbers since November. This is likely to continue throughout the first quarter of 2021. Economists say that would have implications for Nigeria’s GDP growth in Q1.

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“No doubt, the directive by the Federal Government to stop the registration of new Sim by telecom companies has the ability to affect their revenue because the inflow that is expected to come from the sale of new Sim has been kept on hold,” Ajibola Olude, Executive Secretary of Association of Telecommunication Companies of Nigeria (ATCON) told BusinessDay.

For the second month running, Airtel led the losers table as 2.2 million subscribers left the platform leaving the Indian telecom operator with 53 million subscribers from 55 million the previous month. The loss is the most the telco has seen since May 2014. The loss also leaves Airtel in the position of the third-largest telecom operator in Nigeria.

MTN, the largest telco in Nigeria, also extended its subscriber losing run for the fourth month as 1.7 million subscribers dropped from its network. The telco’s total subscriber figure now stands at 79 million.

MTN’s market share also dropped for the fifth consecutive month to 39.54 percent from 39.55 percent in December, 40.14 percent in October, 40.34 percent in September, and 40.90 percent in August.

Although 9Mobile’s loss of 173,567 subscribers may seem small compared to MTN and Airtel, it has more to worry about than the rest given that it is just beginning to recover from an almost two years drain of both mobile and internet subscribers. 9Mobile’s subscribers at 12 million have gone back to October 2020 levels.

Globacom was the third largest loser dropping over 245,627 subscribers in January to maintain a second-month losing streak. It now has 54,594,502 subscribers compared to 54,840,129. The loss notwithstanding, Globacom is now the second-largest telecommunication company in the country thanks to Airtel’s massive subscriber decline.

Ikechukwu Adindu, Director of Public Affairs, NCC, told BusinessDay over the phone on Friday that there are no indications yet when the suspension will be called off – perhaps after the NIN registration deadline set for April 6.

However, the telcos will soon be able to activate SIM swap and replacements for their customers. This is subject to a framework that the operators have been asked to come up with by the Ministry of Communications and Digital Economy.

Although NCC did not say so at the time, the industry expectation was that the suspension on SIM card registration would be lifted once the National Identification Number (NIN) registration and linking were completed in January. Unfortunately, gross lack of capacity to quickly execute the NIN exercise forced the government to shift the timeline for the NIN registration to February and later to April 6.

Telcos are not the only ones suffering the prolonged SIM suspension. Business owners and traders that are into selling and registering SIM cards have also been affected as many of them reportedly said the loss of revenue led to cutting jobs.

“Why is the ban on retrieval of lost SIM cards still on? To date, my sister who was robbed of her phone (MTN SIM inside) at gunpoint is yet to have her MTN line connected back,” said an MTN customer, Ovie Ukochovwera.

While the ban persists, telcos are beginning to find a way to get service customers that are able to provide NIN slip, SIM pack, and valid ID card at any of their branches.

Adedeji Olowe, CEO of Trium Networks, a venture capital firm, said while the directive to suspend SIM registration until NIN registration is completed makes little sense, telcos would rebound once it is lifted.