Telecom Firms Lose N156.3bn Monthly to Dormant Lines

Telecoms
  • Telecom Firms Lose N156.3bn Monthly to Dormant Lines

Telecommunications companies in the country are losing about N156.3bn in potential revenue every month due to the increasing number of inactive telephone lines on their networks, investigation has revealed.

The telecoms firms and the Nigerian Communications Commission came about the figure after a check on the average spending of subscribers monthly, with the number of inactive lines multiplied by the Average Revenue per User.

An analysis of the latest industry data released by the NCC shows that there are currently over 85.4 million inactive telephone lines on the various mobile networks in the country, while the industry ARPU is put at N1,830 ($6).

This figure represents 36 per cent of the total 239,586,312 connected telephone lines, as only 154,120,484 lines are said to be active by the regulator, making about 85.4 million lines inactive as of February 2017.

In January, the inactive telephone lines in the industry stood at 83.5 million. The February figure is the latest official data in the industry.

“This unprecedented rise in the number of redundant telephone lines in the country is threatening the growth of the telecoms companies and the sector,” a senior manager in one of the top four telcos, who spoke on condition of anonymity because he was not authorised to talk on the subject, said.

He added, “The rising profile of inactive telephone lines in the country constitutes heavy revenue loss for telecoms operators, especially at a time the economic recession is biting harder across sectors, and the revenue loss continues to rise monthly.

“Yet, we are faced with huge costs on wages and maintenance bills, which we may consider cutting, no matter the percentage.”

The Vice President, Medallion Communications, Mr. Ike Nnamani, said, “The N156.3bn loss is as a result of subscribers abandoning their registered lines instead of using same to access mobile services; and when this is the case, the affected operators are losing potential revenue.”

However, the President, National Association of Telecoms Subscribers, Mr. Deolu Ogunbanjo, blamed the development on the current economic situation in the country, adding, “Nigerians are known for carrying multiple telephones, but the current economic situation may have forced them to drop some of their phones considering the falling purchasing power of an average telecoms consumer.”

A telephone line is deemed to be inactive once it is not used to make or receive calls for 90 days and when a subscriber gets connected on a line and subsequently fails to use it to access telecoms services on the network. This results in loss of potential revenue for the affected telecoms company.

Giving further reasons why there were increasing inactive lines among subscribers, the President, Association of Telecoms Companies of Nigeria, Mr. Olusola Teniola, said, “Competition in the telecoms sector is getting stiffer by the day and this makes subscribers to have the tendency to change their existing lines, since they now have multiple options.”

According to him, if subscribers find better tariff plans or a more quality service on a new network, “they can switch freely and then keep the old lines in inactive mode.”

Ogunbanjo also explained that once a telecoms operator sold a Subscriber Identity Module to a customer and got him connected on its network, “the intention is to start generating revenue from the subscriber anytime the subscriber loads their account with airtime to access services.”

Speaking on the issue, the Director, Public Affairs, NCC, Mr. Tony Ojobo, said the Mobile Number Portability scheme was a need-based value added service for willing subscribers.

“The MNP is not a compulsory service that people must subscribe to. If subscribers see a need for it, they may switch from their current network to another; and if not, they remain on the current network,” he said.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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