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MNOs lose revenue as inactive lines rise to 90.5m

.Active subscriptions now 190.5m

Mobile network operators in Nigeria are losing a substantial part of revenues realisable from adding more subscribers, Tech Track Africa reports. This came as the number of inactive lines across the mobile networks of MTN, Globacom, Airtel, and 9mobile rose to 95.5 million in April.

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 90 days, at the minimum. Such lines are separated from active lines as they generate no revenue for telecom operators within the stated period.

According to the latest statistics released by the Nigerian Communications Commission (NCC), Subscriber Identity Module (SIM) cards so far sold and connected by the MNOs had hit 281 million as of April this year. However, only 190.5 million of those lines were actively being used by telecoms consumers to access voice services from their respective operators, as 95.5 million became redundant. With this, the MNOs are able to generate revenue from only 67.8 per cent of SIMs sold to their customers.

Active subscriptions

The NCC’s data showed that active subscriptions rose from 188.9 million in March to 190.5 million in April. This means that the operators activated an additional 1.6 million lines in one month.

Analysis of the subscriber data showed that as connected lines are increasing, the number of inactive lines are also rising. For instance, while active subscriptions had risen by 6 million between January and April this year, inactive lines increased by n the 10 months period, active subscriptions on the mobile networks grew by 12.5 million within the same period.

Free SIMs

At the beginning of the telecoms revolution in 2001, a SIM was sold for as high as N60, 000. However, the stiff competition among the telecom operators for the subscribers has pushed many of them to be offering their SIMs for free, laced with promises of free credit and data upon activation. This paper’s investigations revealed that most of the subscribers often go for the new lines to enjoy the freebies only to discard the lines once the gift period is over.

Industry analysts have also 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 strategy of offering SIMs to customers for free.

No cause for alarm

However, 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, the 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 to obtain another SIM card when they return to Nigeria. So it is still okay that the number of active SIM cards exceeds the number of inactive SIM cards. If it happens otherwise, it signifies saturation or heavy churn due to alternative offerings over Wi-Fi or other non-SIM-based devices.”

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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