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Telcos lose 30 percent revenue to SIM deactivation

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Active mobile subscribers in Nigeria rise to 218.6m in November 2022

BY EMEKA EJERE

At a time telecommunication companies (Telcos) in Nigeria are lamenting spiraling cost of production occasioned by energy and foreign exchange crises, the operators will have to grapple with yet another revenue-threatening development.

This time, the telcos risk losing a huge revenue from the partial deactivation of about 75 million phone lines that are not linked to National Identification Number (NIN) on their various networks, which started on Monday, April 4, 2022.

The federal government through the Ministry of Communications and Digital Economy had directed the operators to bar outgoing calls on all unlinked Subscribers Identification Module (SIM) cards in the country.

President Muhammadu Buhari, in December 2020, had ordered all phone lines to be linked to an identification number to curb rising incidents of abductions in the country.

According to a statement by the Nigerian Communications Commission (NCC), out of the nations 198 million phone connections, 125 million SIM cards had been verified and linked to 78 million unique national identity numbers.
MTN Group Ltd.s Nigerian unit is the largest operator with 75 million subscribers, giving it a market share of about 38 per cent. Other major operators include Airtel Africa Plc, Globacom Ltd and 9Mobile.

The telcos had lost a huge number of subscribers and revenue after the federal government set a deadline for people to link their NIN with their SIM cards. The situation was worsened when the government banned the sale of new SIM cards in December 2020.

According to industry statistics released by the NCC, the operators lost 20.83 million subscribers in the first half of 2021, Using the industry Average Revenue Per User (ARPU) of N1,420 for 2020, as stated by the Association of Telecommunications Companies of Nigeria (ATCON), revenue lost over that time period was N17.88bn.

Total number of subscribers fell from 187,275,547 in January 2021 to 187,275,547 in June 2021. MTN lost 5,464,322 subscribers. Globacom lost 4,463,962 while Airtel lost 2,759,506 subscribers in the first half of the year.

Collectively, the telcos lost 11.08 million data subscribers within the period as the number of data subscribers fell from 150,898,122 in January 2021 to 139,814,913 in June 2021.

A senior official in one of the networks, who spoke on the condition of anonymity, said “as much as no operator would love to block a SIM because of revenue losses, among others, we still prioritise the issue of security any day, any time. We have commenced the process. I cannot say how much would be lost because it is still very early.”

He, however, said operators are still confused as to how this should play out. “There are two scenarios in this matter. First, we have those with SIMs but have yet to verify their NINs (though very few).

“Secondly, there are those with linked SIMs that have not been verified because of the challenge of backend integration from NIMC. Some of us have sent many linked SIMs to NIMC, but they have not been verified yet because of some teething problems, which have continued to persist.

“Another challenge is, who do we block, those on voice or data platforms. I think there should be more clarifications on that if this order must be effective, the official stated.”

He said operators are likely going to become smarter because the impact of the SIM cutoff would be much if there is no integration as fast as possible.

“Smart in the sense that some players will apply the Pareto Principle rule. For instance, on our own network, the high-end users are about 10 per cent, while the remaining 90 per cent are those, who dont recharge as often as possible or recharge largely around N100 to N500 almost in a month or months.

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“So, all efforts will be channeled to ensure that those 10 per cent, which has been identified to be legit customers are not removed from the network, but rather ensured that their lines are linked and verified as fast as possible,” he suggested.

Meanwhile, subscribers affected by the partial deactivation have continued to besiege the premises of their various service providers eager to have their issues urgently resolved, visits by BusinessHallmark have revealed.

Already, in a proactive measure to avert huge loss of revenue, MTN has started sending SMS conveying some incentives put in place to encourage their partially barred subscribers to hurry up and make their NIN available for linkage.

One of such messages seen by BusinessHallmark reads: Dear customer, link up your NIN to your MTN SIM TODAY and get 1,000 Naira worth of airtime. Dial *785# to link up or visit any MTN store closest to you.
No unregistered SIMs.

On concerns raised over the use of phones to negotiate ransom by terrorists despite the NIN-SIM registration, telcos have insisted that all registered SIM cards can be traced to their users and owners for any security reasons as there are no unregistered SIM cards on the network of any service provider in the country.

Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said telecoms operators have the data of all registered SIM cards, insisting that the owners could be traced alongside the geo-location of the mobile phone.

He, however, explained that it could be difficult to trace the kidnappers of the Abuja-Kaduna railway train attack who still use mobile phones with registered SIM cards to contact the families of their victims for ransom because they use their victims mobile phones for the calls.

“Telecoms operators can trace the geo-location of the phone, from where calls are made with the particular phone and provide the information to security agents for prompt action.

“I need to make it clear to Nigerians that there are no known unregistered SIM cards that are still on the network of any telecoms service provider because all networks have been cleaned up and all unregistered and improperly registered SIM cards have been deactivated from the networks, during the registration and linkage of NIN with SIM, which ended on March 31.

“So, based on this, there is no SIM card that is registered with the network of any telecoms service provider that cannot be traced to the user and owner.

“But it is difficult to trace and arrest the kidnappers who use victims phones with registered SIM cards to make calls. What we can do as the operator is to trace the geo-location of the phone and provide such information to security agents,” Adebayo said.

He urged security agents to utilise information provided by telecoms operators, in tracking kidnappers in their geo-locations, adding that all the information and support that the security agents need to do their job effectively have been provided by telecoms operators.

Experts have, however, called for better management of the entire process to ensure the purpose of the NIN-SIM exercise is not defeated.

According to them, the confusion stemmed from the fact that there are some subscribers, who have linked their SIMs, but verifications were yet to come from the National Identity Management Commission (NIMC).

“So, are we going to block these ones as well?” an official of one of the Mobile Network Operators (MNOs) asked.

Recall that the deadline handed Nigerians to link their NIN to their SIMs ended on March 31, after it had been postponed about eight times.

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But a statement signed by the Director of Public Affairs, NCC, Dr. Ikechukwu Adinde and Head, Corporate Communications, NIMC, Kayode Adegoke, noted that the Minister of Communication and Digital Economy, Isa Pantami, commended Nigerians and legal residents for their support during the NIN-SIM exercise, which lasted for one year and four months, before ordering that outbound calls on all unlinked SIMs should be blocked with effect from April 4.

Pantami emphasised that enrolment for NIN is a continuous exercise and NIN is a precondition for service in telcos, banks, Nigerian Immigration Service, and several other government services. He encouraged Nigerians and legal residents to visit NIN registration centers for the enrollment and issuance of valid NINs.

However, the President, the National Association of Subscribers of Nigeria (NATCOMS), Chief Deolu Ogunbanjo, said he does not know when the information got to the federal government that large numbers of subscribers have linked and verified their SIMs.

Ogunbanjo said many subscribers are yet to link their SIMs not to talk of verification. The verification challenge must be due to the low capacity of NIMC. We learnt they still have backlogs of yet to be verified NINs.

We would have appreciated it more if the Minister had met with ALTON, Internet Service Providers (ISPs) and other stakeholders to ascertain the level of compliance with the NIN-SIM exercise before the order.

There are many businesses that run on SIMs and blocking them would amount to killing their businesses, especially at a time the economy is struggling. Of course, some of them have had their SIMs linked but their lines are yet to be verified.

“So, some of these things need to be considered. I am quite aware that the exercise has been on for about one year and four months, but we believe that the exercise should be open-ended without a deadline,” he said.

 

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