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NIN/SIM linkage: MTN loses 1.3m subscribers in one year

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MOBILE subscribers of MTN Nigeria declined year-on-year (YoY) by 1.9 per cent to 70.2 million in the first quarter of 2022, from 71.5 million in the first quarter of 2021, representing a loss of 1.3m subscribers.

This is according to the telecommunication firm’s unaudited report for the first quarter ended March 31, 2022, obtained from the Nigerian Exchange Group (NGX).

The report reveals that active data subscribers grew by 10.5 per cent to 35.9m active subscribers in the first quarter of 2022, from 32.5m in the first quarter of 2021.

In terms of revenue, the telco giant recorded N470.98 billion for the first quarter of 2022, compared to N385.31bn obtained in the corresponding period.

The firm’s voice revenue grew by 5.8 per cent to N258.76bn in the first quarter of 2022, as against N244.61bn in the first quarter of 2021.

Similarly, the data revenue grew year-on-year by 54 per cent to N162.73bn in 2022, from N105.69bn in 2021.

Its profit after taxation jumped year-on-year 31.3 per cent to N96.81bn in first quarter of 2022, from N73.74bn in the corresponding period.

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In the report, the telco blamed the drop in mobile subscribers on the regulatory restrictions on new Subscriber Identification Module (SIM) sales and activations.

The company’s Chief Executive Officer, Karl Toriola, who commented on the report in the same statement, maintained that new subscribers to the tune of 1.7m had filled that gap by the end of the first quarter of 2021.

Toriola said, “Although our mobile subscriber base declined by 1.9 per cent YoY from 71.5m in March 2021 to 70.2m, we sustained the growth trajectory from Q4 2021 as we ramped up capacity for SIM registration and National Identity Numbers (NIN) enrolment. As a result, we added 1.7m subscribers in Q1 2022. In addition, active data subscribers rose by 10.5 per cent YoY to 35.9m, with 1.6m added in Q1 as we continued to drive data conversion from our new and existing subscriber base.”

He explained that MTN complied with the directive requiring all operators to restrict outgoing calls for subscribers whose SIMs were not associated with NIN.

That directive, he explained, affected 19 million subscribers.

Giving an update from April 25, 2022, Toriola said about 8.7m of those restricted submitted their NINs for verification, of which approximately 1.2m had been reactivated, many of whom were high-value customers.

MTN office

The CEO worried that the strict policy of the Federal Government would not only affect subscribers but the telcos themselves.

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He said, “In terms of how general traffic trends have evolved since the implementation of the directive, we have seen a drop-off in traffic following our compliance with the directive. However, we have started to see a gradual recovery as the affected subscribers are reconnected to resume voice calls.

“Data revenue has continued a steady increase but has currently not fully compensated for the decline in voice revenue of restricted subscribers. Encouragingly, we have seen an acceleration in new connections.”

Following the approval of the MTN MoMo Payment Service Bank (PSB) by the Central Bank of Nigeria, Toriola eyed a launch in the second quarter of the year with the hope of leveraging its agent network to accelerate the rollout of advanced services.

Nonetheless, he was worried that the Nigerian Communication Commission (NCC) directive on the NIN-SIM linkage would impact future growth.

“In the near term, our margins will be impacted by the NCC’s directive on NIN-SIM linkage and higher energy-related costs, as well as the investment to launch and rollout PSB. We, therefore, anticipate that earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for the full year will be slightly below our medium-term target range of 53 per cent-55 per cent, on current operating and economic assumptions.

“We have put in place interventions to moderate the impact of the NIN-SIM linkage regulation on both revenue and the subscriber base. This still has a dependency on NIMC validation capacity. While limited incremental costs will be incurred to support National Identity Management Commission (NIMC)’s NIN enrolment capacity, we expect muted impact on the 2022 outlook for top line,” he explained.

An electronic national identity card. Photo credit: NIMC

Meanwhile, the Association of Licensed Telecommunication Operators of Nigeria (ALTON) has vowed to engage the Federal Government over the mass blockage of subscriber lines.

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The ALTON Chairperson, Gbenga Adebayo, represented by the body’s committee chairman on Seminars/Events and Head, Regulatory Services, Mrs Adejumoke Ajala, said this in an interview with The ICIR.

Ajala said that the blockage of subscribers lines had been a major challenge for ALTON as several sectors had been affected by the blockage of information flow, even as far as the rural areas.

The ICIR had on April 4, 2022, reported that the government had directed mobile telecommunication operators comprising mostly MTN, Globacom, Airtel and 9mobile to immediately bar outgoing calls from SIM cards not yet linked with the NIN.

The government, through the Ministry of Communications and the NCC, had in December 2020 directed SIM subscribers to link their national identity numbers to their SIM cards, with a warning that subscribers who failed to do so by January 19, 2021 would have their SIMs blocked.

About 119m lines might have been deactivated. Available statistics from the NCC in February showed there were 303,636,267 connected GSM mobile lines in the country, out of which 197,768,482 were active. Of the 197.7m active subscribers, 78m had, so far, been linked.

  1. In spite of all these, MTN has continued to strengthen its relationship with the NCC despite the imposition of a fine of N1.04 trillion on the firm over SIM registration infractions, part of which included its failure to disconnect 5.2m improperly registered SIM lines within the stipulated timeline.
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Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org

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