SIM activation rises as Internet usage drops
• Experts claim drop in consumer spending, weak purchasing power responsible
•ALTON sees more positive contributions to economy
Though activation of new Subscriber Identification Module (SIM) cards rose between June and July, the increase did not push up the Internet usage on both narrow and broadband technology platforms.
The mobile subscriptions resulted in 0.11 per cent increase in the nation’s teledensity from 98.28 per cent to 98.39 per cent, while the quartet of MTN, Globacom, Airtel and 9mobile saw some new 193, 766 mobile subscriptions, Internet subscription on GSM platform dropped by 430,733, while broadband usage also went down by 336,657.
According to the latest mobile subscription data, the July edition, released by the Nigerian Communications Commission (NCC), on Monday, Internet usage via GSM, which had 139, 814, 913 dropped to 139,384,180 in July. Broadband subscriptions from 76, 289,063 dropped to 75,952,406 in the period under review. By penetration, the figure dropped from 39.97 per cent to 39.79 per cent.
The Federal Government had in April lifted the about 112 days ban it placed on activation of new SIMs in the country on the basis that it had to checkmate the spate of crimes in the country. The Minister of Communications and Digital Economy, Dr. Isa Pantami, used the period to lord the NIN-SIM registration exercise in the country.
Further analysis of the statistics showed that in the period under review, Globacom, which had on August 29, clocked 18 years in Nigeria, displaced Airtel to rank after MTN as the second largest operator in the country. Airtel had maintained that position from April till June.
The statistics showed that Globacom gained one million more users in the period under review, moving from 50,130, 540 in June to 51, 137,799. Both MTN and Airtel dropped users. MTN lost 447, 460, moving from 73.5 million to 73.1 million; while Airtel moved from 50.6 million to 50.3 million. Records, however, showed that 9mobile didn’t get any new subscribers within the period under review, but maintained its 12.9 million users.
However, with 73 million users and 39 per cent penetration, MTN, which on August 8, celebrated its 20 years of operations in Nigeria, remained the largest telecoms operator in the country. Globacom is second with 27.28 per cent market reach and 51.1 million subscribers; Airtel is third with 50.3 million and 26.8 per cent penetration. 9mobile maintained its stand as the fourth largest operator with 6.89 per cent reach and 12.9 million customers.
Commenting on the July data, the Nigerian Coordinator, Alliance for Affordable Internet (A4AI), Olusola Teniola, said from the figures shared, it appears that the churn rate on the Internet and broadband-based services was much higher in the period under review.
Teniola said this resulted in net losses in this type of service being greater than the churn on other services that indicated a net addition, which implies a strong likelihood that more voice-only SIMs were activated in July.
According to him, the main reason behind these numbers is downward pressure on the average consumer spending and weakness in purchasing power.
From his perspective, Executive Secretary, Association of Telecommunications Companies of Nigeria (ATCON), Ajibola Olude, said one of the major factors that are responsible for a reduction in Internet subscription despite growth in SIM/mobile activation could be traced to change in policy by some companies and organizations, which initially allowed their employees to work from home but now all of them have stopped the policy.
He explained that at the time these employees were working from home, their companies and organisations had to buy data for them but since they have returned to the office, the need to buy data for them has been stopped.
Olude corroborated Teniola’s point on a drop in consumer spending, by saying that “the prices of various food items have gone up in the recent time and the first need of man is food and as such man would rather maintain the level of the food he and his family consume and reduce the money spend on Internet subscription.
“Finally, the unemployment which is caused by COVID-19 pandemic also contributed to the reduction in Internet subscription. When the number of people that have the purchasing power reduces, it will affect the number of people that can buy Internet subscriptions.”
MEANWHILE, on the sector’s GDP contribution for the second quarter released by the National Bureau of Statistics (NBS), which saw ICT marginally increasing its contribution from 17.83 per cent to 17.92 per cent, while the telecommunications and information services dropped from 7.69 per cent in Q1 to 5.90 per cent in Q2, the Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said though the percentage increase appears marginal, the impact is quite significant in the overall scheme of things.
Adebayo said operators are delighted that the sector continues to contribute to the national economic outlook.
According to him, the potential for growth and greater contribution to the GDP is looking good and players in every part of the ICT sector need to continue to pull and push together to move the dial forward.
“We are pleased and looking forward to the next outlook report, which we are optimistic will continue to be positive,” he stated.