Recession: Nigeria’s telecom sector loses N32bn in 2016 Q2

Nigeria economic meltdown has seen operators in its telecommunications sector losing more than 60 million lines at the end of second quarter of 2016, according to an investigation.

This has resulted in a sharp revenue drop of about N31.56 billion in the same period, being a 35 per cent decline from the report of 2015.

Experts say the decline in the average revenue per user (ARPU) index, which has witnessed a sustained plunge since the beginning of 2016 has affected the revenue projections of operators.

They blamed this on the economic recession, which is contributing in reducing the service consummation rates of an average subscriber.

The ARPU is the statistically measured data hits recorded by network owners per unit of a second as approved by the International Telecommunications Union.

Findings showed that Nigeria recorded appreciable growth in service-consumption in its first 10 years of introducing GSM, only beaten by Canada, the United States and Germany.

But the current index, according to the Assertion of Telecommunications Companies in Nigeria (ATCON), has been reduced following the economic hardship suffered by consumers of the services in the past one year.

Thus, the figure dropped sharply from N3, 000 in 2001 to N500 in 2016, leading to about 62 million lines being dormant due to current economic challenge.

Mostly affected are MTN, Globacom, Airtel and Etisalat due mainly to the dwindling disposable income of subscribers amid the harsh economic climate.

Between January and July 2015 the number fell by 21.7 per cent and in 2016, it further went down by 15.7 per cent

Rufus Oduniyi, a telecoms expert stated that if the trend continued, operators might have 45 per cent of the active lines slip into dormancy, which will see the remaining quarter of 2016 returning poor revenue.

“The operators are also not helping matters, most of them carry on as if the good days were still around. This could be seen from the poor services that some of them are rendering,” he said.

But the Nigerian communications commission (NCC) is not helping the systems as it said it had embarked on shutting down firms it claimed were owing it some outstand fees.

It had succeeded in compelling MTN to cough out a fine of N330 billion, a situation that had forced the South African owned company to sack its top management staff.

Figures from the National Bureau of Statistics (NBS) for the second quarter showed that, Airtel, Etisalat and Globacom contributed relatively to a marginal growth rate in Nigeria in the past two years. The agency however excluded MTN which recorded a decrease within the period.

By Emma Eke…..

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