Telcos lose N234bn potential revenue as inactive lines surges

Ben Uzor Jr

The growing number of inactive telephone lines has cost telecommunications companies operating in Nigeria an estimated N234bn in revenue loss in first seven months of 2012, according to investigation. The figure, as gathered, represents the total estimated revenue losses recorded by the telecoms companies, comprising the Global System for Mobile Communications operators, the Code Division Multiple Access operators and the fixed line networks in the country spanning January 2012 and end of July 2012. It was gathered from the latest industry data released by the Nigerian Communications Commission, the telecoms industry regulator that the number of connected but redundant or inactive telephone lines in the industry has grown significantly from January reaching 37.6 million at the end of July, 2012.

According to the findings, in January 2012, the number of inactive telephone lines stood at 31.9 million. The number of redundant phone lines increased to 35.2 million in February; 35.8 million in March but slightly fell to 35 million in April with operators. In May, the figure dropped 32.6 million inactive lines; while in June and July, the figure surged 33.7 million and 37.6 million respectively. Meanwhile, the cost implication of the inactive telephone lines monthly was based on conservative estimate, using the current industry Average Revenue Per User in Nigeria by the Business Monitor International (BMI) Limited, a research and consulting firm.

According to BMI, the current ARPU in Nigeria is estimated at N1, 011. ARPU is the financial benchmark used globally by telecoms firms to measure the average monthly or yearly revenue generated from an average subscriber. Consequently, with an APRPU of N1011 and 31.9 million inactive telephone lines recorded on the networks in January, 2012, telcos made an estimated loss of about 32.2bn. In February, the revenue losses increased to N35.5bn and in March, it moved to N36.1bn. However, the loss in revenue fell slight to N25.3bn in April; N32.9bn in March while it increased to N34bn in June and jumped to N38bn at the end of July 2012.

According to the NCC data, as at the end of July, 2012, Nigeria had 140.4 million connected telephone lines on all mobile networks in the country, 03.4 million of which were active, leaving about 37 million telephone lines inactive. Industry analysts confirmed to National Mirror that the huge number of connected telephone lines, which subscribers have dumped for another line, was putting pressure on the revenue generation of telephone firms. One of the analysts, Akin Akinbo, said: “It is true that many subscribers have today dropped one SIM line for another one, ostensibly because the new one is offering reduced tariff or special value-added services or as a result of a promos being run by an operator, which promises more goodies for the operators or as a result of poor coverage of an operator in preference for another one.