Business & Economy
Breaking: How GSM Telcos Lose N1.1 Billion To SIM Card Registration Ban
The four major telco players in Nigeria have lost a total of 11.8 million customers since the implementation of NIN-SIM card ban by the federal government in December 2020. This is according to information obtained from the Nigerian Communications Commission.
Specifically, the total subscriber base of the four major telco firms in Nigeria, reduced from 207.58 million at the end of November 2020 to 195.73 million in February 2021. This represents a 5.71% decline within the space of three months.
The decline in the number of telco subscribers could be attributed to the suspension of Sim card sales and registration as Nigerians grapple with the stress of registering and obtaining their national identity cards.
Big losers
Airtel
- Airtel lost a total of 5.8 million subscribers between December 2020 and February 2021, representing about 10.1% decline in their subscriber base.
- At the end of November 2020, Airtel had a total mobile subscriber base of 57.23 million, which had dropped to 51.43 million at the end of February 2021.
- Similarly, the internet subscriber base also reduced by 1.57 million within the same period to stand at 39.9 million subscribers.
MTN
- Between December 2020 and February 2021, MTN Nigeria lost a total of 4.67 million subscribers. This represents a 5.7% reduction in mobile subscribers.
- At the end of February 2021, MTN had 77.35 million mobile subscribers, which accounts for 39.5% of the total subscriber base in the country.
- In the same vein, a total of 2.92 million internet subscribers were lost by MTN in the same period.
The others, 9mobile and Globacom also suffered from the ban on sim registering and sales as they lost a total of 415,170 and 909,955 mobile subscribers within three months, representing 3.1% and 1.7% decline in their customer base respectively.
SIM Card Revenue Loses
Nairametrics Research conducted an analysis of the likely losses incurred by GSM Companies due to the SIM Card registration ban. A cursory look at historic data shows that Nigerian GSM companies recorded an average of 2.32 million additional subscribers each month for the first 10 months of 2020. Assuming the same incremental rate at a selling price of N100 per new sim card, these GSM Telcos may have lost about N1.1 billion in sim card sales between December 2020 and April 2021 due to the ban.
- However, based on available data from the company’s results, both MTN and Airtel recorded positive growth in gross earnings in 2020 but the decline in customer base and crunch in revenue sources could affect their ability to generate as much revenue in 2021.
- MTN Nigeria recorded a 15.1% year-on-year increase in its annual gross revenue as it earned a sum of N1.3 trillion in 2020. It also recorded voice sales increase of 5.6% in 2019, while it posted a profit after tax of N205.2 billion in the period under review.
- On the other hand, Airtel Africa’s 9 months financials, revealed that the telco giant boosted its revenue by 13.01% to stand $2.85 million while profit before tax for the period was $482 million, a 3.79% year-on-year decline.
- Globacom and 9Mobile are not listed companies so the details of their results are not made public.
What you should know about NIN-SIM ban
The Minister of Communications and Digital Economy, Dr Isa Pantami, on the 1st of April 2021, announced the further extension for the deadline of NIN-SIM linkage to the 6th of May 2021.
- However, according to the minister, over 51 million people have been assigned their National Identification Number and many others who have enrolled are in the process of being assigned NINs.
- The current number of monthly enrolments has increased significantly to about 2.6 million registrations. He also stated that the number of enrollment centres across the country has witnessed a remarkable increase, with 3,800 centresavailable for enrolment.
- It is worth noting that the federal government has lifted the ban on new sim card registration. However, only those who have registered for their NIMC and have obtained their National Identity Number can register new sim cards.
- On the other hand, telco operators in Lagos State, the commercial hub of the country, revealed last week that they are yet to receive approval to commence the registration of new SIM cards, despite the federal government lifting the ban.
Bottom line
It is evident that the NIN-SIM exercise has affected Nigerians, as the process of obtaining the National Identification Number proved stressful and costly in the early stages. However, Nigerian telcos are expected to also bear the brunt, as revenue growth could be hampered as a result of the temporary ban on sim card registration.
