Nigeria’s teledensity falls by 6.03 per cent
Operators lose 12.5m Internet users as broadband penetration drops to 40.6%
No less than 15.8 million subscribers have lost access to telecommunications services in the country, as a result of government policies, especially that of the ban on new SIM cards activation and replacement of subscribers’ damaged/missing SIM.
Similarly, the announcement of the National Identity Number (NIN)-Subscriber Identity Module (SIM) enrolment processes that commenced last December equally compounded the sector’s challenges.
As a result of the access, the country’s telephone density dropped by 6.03 per cent in the last four months.
Teledensity is the number of telephone connections for every hundred individuals living within an area. It varies widely across nations and also between urban and rural areas within a country.
The April subscription data released by the Nigerian Communications Commission (NCC), yesterday, showed further drop-in access to telecommunications services in the country.
The Minister of Communications and Digital Economy, Dr. Isa Pantami, had announced the suspension, which took effect on December 15, 2020, hindering telecoms operators from activating new SIM cards or replacing damaged/missing SIM of subscribers. Also, subscribers were unable to port to other networks.
This caused the total number of GSM subscribers in the country to drop significantly, leading to erosion of revenue for telcos. In the long run, since their revenue has been badly affected due to the Minister’s directive, the government should expect a decrease in fiscal remittances by the operators
The Guardian checks showed that the country entered 2021 with a teledensity of 104.89 per cent, but dropped to 98.86 by the end of April. Internet users, which stood at 151.3 million in January, dropped to 141.8 million, which showed a loss of 9.53 million users. Broadband penetration also dropped significantly, losing 2.27 per cent. Penetration was 42.93 per cent in January but fell to 40.6 per cent by April ending.
Largely, telecommunications operators have lost 15.8 million in the last five months between December 2020 and April 2021. Checks showed that operators growth has continued to plummet over the last six months.
For instance, MTN, which entered the year with about 80 million subscribers dropped to 74.8 million with 39.7 per cent penetration. Globacom with some 55 million users shed some weight and dropped to 50.6 million subscribers with 26.8 per cent penetration. Airtel, which earlier in the year, equally had about 55 million users, also lost about five million users with its market penetration at the end of April standing at 26.6 per cent. 9mobile current market penetration stands at 6.78 per cent with 12.8 million users.
From the data obtained from NCC’s website, teledensity, dropped from 108 per cent to 100 per cent between December 2020, when Pantami imposed registration on SIM registration/replacement and by end of March 2021.
A telecoms expert, Kehinde Aluko, observed that the Minister’s interference into a regulatory issue of SIM registration/replacement, which should have been left with the telecom regulator to handle, has run counter-productive to the digital economy agenda of the Federal Government, which the Minister, himself, is championing.
Aluko said the ban on SIM cards, led to a great reversal in the growth of the telecoms sector, which was noticeable in the Gross Domestic Product (GDP) contribution by the telecoms and information services sector. He said the contribution crashed from 17 per cent in Q4, 2020 to seven per cent in the fourth quarter, 2021, according to the National Bureau of Statistics.
Commenting on the drop in the sector, the Nigeria Coordinator, Alliance for Affordable Internet (A4AI), Olusola Teniola, said that subscribers’ changing behaviour was affecting the revenue base of telecommunications companies.
He said there is a propensity for consumers to now spend their money on acquiring services using WhatsApp.
Teniola said if you look at the figure that both MTN and Airtel posted, there was a slowdown in voice growth, but an uptick in data consumption or data service contribution to their top line.
“That reflects the fact that most people are now using over-the-top applications to make calls. The propensity for the consumers, due to COVID-19-induced job losses, will be to seek different ways of using services rendered by the mobile network operators. And since the MNOs are the major contributors to the telecoms industry, it would be reflected likewise in their contribution to GDP.”
With MNOs largely accounting for 98 per cent of the income of the industry, the former President, Association of Telecommunications Companies of Nigeria (ATCON), Teniola, said with the impact on revenue, the telcos would continue to contribute less to the GDP.
“The impact of the SIM-NIN policy will slow down growth. The NIN requirement will slow down the ability to register SIMs legally because not every Nigerian has NIN,” he said.
