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Home Latest IT Telecom companies in Nigeria suffer loss worth N456 Billion as Subscriptions Drop...

Telecom companies in Nigeria suffer loss worth N456 Billion as Subscriptions Drop by N6 Billion

In Q2 2023, MTN said increasing the minimum age requirement from 16 to 18, under the new NCC directive, affected their active subscriber base.

Mobile subscriptions fell by 6.1 million mobile subscribers in the second quarter of 2023.

This is when MTN Nigeria and Airtel Africa reported a loss of N485.69 billion in the same period.

According to data obtained from the Communications Commission of Nigeria, the total number of mobile subscribers in the country fell to 219.77 million at the end of June 2023 from 225.82 million at the end of December 2022.

MTN Nigeria, Airtel Africa, Globacom and 9mobile recorded mixed fortunes during the quarter.

MTN (84.66 million), while retaining its position as the top telecom operator, lost 6.89 million mobile subscribers in the quarter under review. Airtel lost 137,828 subscribers to end the quarter with 60.19 million.

Glo and 9mobile both increased signups, with Glo and 9mobile’s subscriptions increasing from 533,582 to 61.33 million at the end of March 2023, while 9mobile’s signup increased from 437,823 to 13.58 million.

Additionally, telecommunications density, the number of active phone connections per 100 residents living in an area, continued in free fall and dropped to 115.30% in the second quarter from 118.48% in the quarter. Firstly.

The decline in mobile subscriptions is attributed to the impact of the domestic economic crisis, the scarcity of naira and the decline in purchasing power.

In MTN’s first quarter report, CEO Karl Toriola said: “We continued to experience obstacles in our operating environment in the first quarter of 2023. “The impact of ongoing global macroeconomic and geopolitical developments on energy, food and overall inflation has been exacerbated locally by gasoline and cash shortages during the period. This puts additional pressure on economic activity, consumers and businesses.

In Q2 2023, MTN said increasing the minimum age requirement from 16 to 18, under the new NCC directive, affected their active subscriber base.

“During the second quarter, we introduced a minimum age requirement for SIM card registration from 16 to 18, which affected the running speed of raw logins and rentals,” he said. data bags are active for the quarter.”

Meanwhile, MTN and Airtel said in their semi-annual/quarterly reports that they lost N485.69 billion due to the recent drop in the value of the naira.

They said the sharp depreciation of the naira following the efforts of the Central Bank of Nigeria to close the gap between the official and parallel naira rates had negatively impacted their business.

The value of the naira has been affected since the Central Bank of Nigeria ordered banks to remove the ceiling rate on the naira at the official counter for investors and exporters in the foreign market. repent. The Central Bank of Nigeria would like to notify all licensed dealers and the public of the following immediate changes to operations on the Nigerian Foreign Exchange Market:
Remove segment. All segments are now grouped together in the Investor and Exporter windows. »

This is done to allow the local currency to float freely against the dollar and other global currencies.

On June 14, when apex bank made the announcement, the naira closed at $664.04/$ on the I&E window from $471/$ the day before. Since then, the naira has fluctuated wildly, regularly trading above N700/dollar.

According to MTN, the exchange rate volatility of 60% resulted in an exchange rate loss of N131.50 billion for the company. MTN said: “Net financial expenses increased by 164.3 percent due to increased borrowing and unrealized exchange rate loss of N131.5 billion (H1 2022:
13.6 billion naira) on our net foreign currency liabilities following the substantial devaluation of the naira.  

The company notes that it expects to be hit harder in the second half of the year. “These policy reforms will be positive for the economy in the medium and long term,” he said.

“In the short term, however, they have created additional financial burdens for consumers and businesses, and these will be fully reflected in the pressure on our margins in the second half of the year.

Airtel reported a forex loss of 354.19 billion naira ($471 million) and a loss of $151 million.

Commenting on its loss, Airtel said: “The negative after-tax profit ($151 million) was largely due to a $471 million foreign exchange loss recorded in pre-tax financing expenses and $317 million. dollars after tax due to the devaluation of the Nigerian Naira in recent times”. June 2023. 

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