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MNOs lose N124bn as inactive lines hit 75m

Mobile network operators in Nigeria may have lost N124 billion in voice and data revenue as inactive mobile lines hit 75.5 million in January this year. This amount was lost based on the N1, 645 monthly Average Revenue Per active User (ARPU) in the market.

A mobile line is said to be inactive if it is not used by the subscriber to make or receive calls and/or access data services for a period of 90 days, at the minimum. Such lines are separated from active lines as they generate no revenue for telecoms operators within the stated period.

Based on the statistics released by the Nigerian Communications Commission, out of the 249.2 million connected mobile lines in the country as at January, only 173 million were active. With this, only 70 per cent of the total Subscriber Identity Module (SIM) cards sold by the four GSM operators generated revenues for them, while the remaining 30 per cent were dormant.

Industry watchers have attributed the increasing number of inactive lines to the fact that SIM cards are now easy to acquire and dump. According to them, the MNOs are also contributing to the increase through their aggressive marketing through which they even give out SIMs for free.

According to a recent report by Research ICT Africa (RIA), 51 per cent of mobile subscribers in Nigeria own more than one SIM card. The report, which is a product of a general survey conducted in the country suggests that mobile penetration is still low in Nigeria contrary to the general belief of over 100 per cent penetration. RIA declared specifically that 42 per cent of mobile users in Nigeria own two SIMs, while six per cent own three SIMs. Three per cent of mobile users in Nigeria own more than three SIMs according to the survey, while only 49 per cent own one SIM.

However, speaking in a telephone interview with our Correspondent, the President of Association of Telecommunications Companies of Nigeria (ATCON), Mr Olusola Teniola, noted that the situation is still normal since the active lines for the GSM operators are more than the inactive lines. According to him, loyalty of prepaid customers to their networks is minimal, hence, it is easy for them to drop a line and go for another one.

“With increasing migration of prepaid subscribers, from a usage basis, this means that there is far less loyalty to remain with an operator and easy for expats and mobile road warriors to dispense with SIM cards and return back and obtain another SIM card when they return to Nigeria. So it is still okay that number of active SIM cards exceed the number of inactive SIM cards. If it happens otherwise, it signifies saturation or heavy churn due to alternative offerings over W-iFi or other non based SIM devices.”

On losses being incurred by MNOs on the cost of procurement of SIMs which are in some cases given out free to subscribers but end up being dumped, Teniola said “the lifecycle of a subscriber with either one or more subscriptions with an operator or several operators is more valuable than the costs associated with the production of SIM cards”.

He however observed that the telcos need to win more post-paid subscribers to reduce the number of inactive lines.  “With more post-paid accounts the number of inactive SIM cards should decrease, as the SIM is usually provisioned subject to a tenured contract being in place” he said.

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