In keeping with the second phase of the program, telecom operators said they will abide by the Nigerian Communications Commission’s (NCC) mandate to block calls from phone numbers that have not yet been connected to their National Identity Numbers (NINs).
Given that the first part of the exercise involved roughly 40 million SIM cards, the operators are aware of the potential financial implications. Despite the massive financial losses they were facing, the telcos insisted that they were not deterred and that their main focus was working with the federal government to obtain reliable national data for national security.
The Federal Government’s mandate to disconnect SIM cards that have not been linked with their NINs from the National Identity Management Commission’s database will, in fact, negatively impact the operators’ bottom line, a source said over the weekend (NIMC).
Recall that the partial ban on calls coming from SIM cards not connected to the NIN imposed by the Federal Government through the Nigerian Communications Commission (NCC) had a severe negative impact on the income of mobile network operators (MNOs).
Remember that the sector suffered when the registration of new SIM cards was discontinued roughly two or three years ago. We are now discussing the complete removal of millions of active users from the network.
In the company, telcos profit from data and voice conversations, but losses are unavoidable if these two important income streams are totally cut off. The exercise is still ongoing, therefore, it is difficult to determine the scale at this time,” the person stated under anonymity.
In a phone interview, Gbenga Adebayo, the chairman of the Association of Licensed Telecoms Companies of Nigeria (ALTON), stated that his organization’s members were more worried about the Federal Government’s directive’s implementation than about financial losses.
Reuben Muoka, the NCC’s director of public affairs, has maintained that the disconnection order is being implemented gradually, with the second phase scheduled for March 29 as previously stated. According to him, the first stage happened at the end of February.
“We released a publication that you can review,” he stated. We made clear that those who did not follow the instructions would be blocked, and we set deadlines. And that hasn’t altered.
“On February 29, those who had already been blocked and those who had not submitted their NIN to be linked to the SIM were to be barred.
“We issued an additional deadline for individuals who submitted their NIN but had it rejected owing to non-verification; that deadline is today for disconnection. For individuals who have more than five digits, there is also a set of numbers with ghost verification.
The Commission’s stance, which appeared rigid at first, was based on its goal of clearing the nation’s SIM ownership database and enhance homeland security.
An industry analyst stated, “The commission is committed to ensuring that criminals do not use having multiple unlinked SIMs to carry out their nefarious activities.”
The biggest operator in Nigeria, MTN, reportedly stated that after the deadline on February 28, more than 4.2 million lines were cut off from the network.
No fewer than 72.7 million subscribers were impacted by the Federal Government’s May 4, 2021 mandate to the four operators—MTN, Glo, Airtel, and 9mobile—through the NCC.
Additionally, Airtel Nigeria said that the country’s subscriber base suffered as a result of the full adoption of the NIN-SIM, which prevented over 72 million people from making calls from their mobile devices.
The usage of NIN is now required for all SIM card registrations, according to to the Federal Government’s Revised National Digital Identity Policy for SIM Card Registration, which was adopted last year. The linking of a subscriber’s NIN and SIM card was part of the new policy. The Federal Government instructed the NCC to prevent SIMs that are not linked to NINs from making calls after multiple extensions of the deadlines for customers to link their NINs with their SIMs.
“NIN/SIM regulations in Nigeria impacted customer growth in H1, but then returned to strong growth, adding 4 million customers in Nigeria during H2’22,” the telecom business stated in its results for the year ended March 31, 2022.
A highlight of the study revealed that revenue increased by 17.8% in Q4 and by 20.6 percent for the entire year, to $4,714 million. Underlying revenue in constant currency increased by 19.1% in Q4 and 23.3 percent for the year.
It stated that all areas saw substantial constant currency underlying revenue growth: Nigeria saw growth of 27.7%, East Africa saw growth of 22.7%, and Francophone Africa saw growth of 17.2%. Additionally, revenue growth was observed across all main services, with voice up 15.4%, data up 34.6%, and mobile money up 34.9%.
Operating profit increased by 37.2% to $1,535 million in reported currency, while profit after tax increased by 82.0 percent to $755 million. Underlying Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2,311 million increased by 29.0% in reported currency. The underlying EBITDA margin increased by 294 basis points to 49.0%.
With net cash created from operational activities up 20.7% to $2,011 million, the operator reported operating free cash flow of $1,655 million, up 40.5%. Due to robust cash upstreaming across its OpCos, proceeds from minority investments in mobile money, and tower sales, the company has paid off almost $1.4 billion of debt at HoldCo over the last 12 months. Its leverage ratio has decreased to 1.3x from 2.0x the previous year with $1billion of debt now held at HoldCo (FY’21: $2.4billion).
With improved penetration in mobile broadband (up 15.2 percent) and mobile money services (up 20.7%), it reported a client base of 128.4 million, an increase of 8.7 percent. The board recommended a final payout of 3 cents per share, for a total of 5 cents per share in FY’22 (compared to 4 cents in FY’21).
“This is another strong set of results for Airtel Africa, demonstrating our solid execution as we continue to enrich the lives of a growing number of people by leveraging the sizeable opportunity to promote digital and financial inclusion across our markets,” stated the company’s chief executive officer, Segun Ogunsanya.
Strong double-digit revenue growth has been achieved by all of our regions and for all of our core services. Strong cost control has also improved margins, and we are generating more cash flow, which allows us to keep investing in our network, services, and distribution while also fortifying our balance sheet and raising shareholder returns. We are increasing the number of customers connected in both new and existing coverage regions, pushing use and ARPUs to all-time highs.
“We have completed tower sales in four countries, raised $550 million in minority financing for our mobile money company, and successfully bought out minorities in our Nigerian operation, among other strategic efforts that we successfully carried out this year. We will be able to expand our mobile money company even more quickly and promote financial inclusion in the region thanks to the full PSB license we received from Nigeria last month.
“We are looking to accelerate our performance through a greater focus on digitalization, and we have underpinned our strategic pillars with our sustainability ambition, even though the fundamentals of our six-pillar growth strategy remain unchanged.”
Recall that the Federal Government’s April 2021 announcement of the Max-4 rule prohibited telecom consumers from having more than four lines with a single mobile network operator.
Additionally, the NCC has given MNO until July 31 to check all NINs supplied by users with four or fewer SIM cards and to exclude those NINs that cannot be verified with NIMC.
In 2020, the government ordered telecom providers to stop accepting calls from unregistered and unlinked lines, marking the start of the mandatory linking.
It was anticipated that the policy will aid law enforcement in combating terrorists and bandits who regularly kidnap and murder innocent people. Many phone lines are still unlinked even after deadlines were extended.
A joint statement from the NIMC and the NCC last week announced a strategic cooperation aimed at streamlining the NIN-SIM linkage processes for phone customers across the country.
With relation to the NIN and SIM card linking programs, both authorities underlined their commitment to streamlining the procedures and increasing effectiveness.
They recognize how crucial this program is to improving service delivery nationwide and strengthening security measures.
Market research indicates that during the partial ban period, teledensity fell from its maximum peak of 108.92 percent at the end of November 2020 to 200.2 million, and there was a decline in the number of mobile subscribers from almost 208 million.
Furthermore, as of the end of January 2021, there were only roughly 151.2 million active internet subscriptions, down from approximately 155 million at the end of November 2020.
After more than a year of consistent growth in active internet subscribers, this indicates a loss of 3.6 million active internet subscriptions in just two months.
VoIP also saw a similar fate, with active subscriptions declining from 429,121 to 387,169 in the same time frame.
Additionally, broadband penetration dropped slightly from 45.07 percent to 45.02 percent in November and December of 2020. However, Nigeria had a significant decline in internet penetration between December 2020 and January 2021, with the country’s broadband penetration falling to 42.93 percent after the country’s broadband subscription count plummeted from almost 86 million to less than 82 million.
Nigeria had steady month-over-month growth in fixed wired active internet subscriptions, rising from 9,866 at the end of February 2020 to 11,545 at the end of January 2021.