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Nigerians spent N1.05trn on airtime in 5 months

(NewTelegraph)— Telecommunications subscribers across the four mobile networks in Nigeria spent an estimated N1.05 trillion on airtime in the first five months of the year, New Telegraph has learnt. This amount covered what was spent on voice, text message and data services from the mobile network operators (MNOs).

The amount of money spent by the subscribers between January and May, also represent the estimated amount of money generated by telecoms as revenue from airtime spending of telecoms consumers, it was gathered.

The estimated airtime spending and revenue for subscribers and telcos respectively, was arrived at using the monthly active subscriber base for the four months period as released by the telecoms regulator, the Nigerian Communications Commission (NCC), and the monthly Average Revenue Per User (ARPU).

ARPU is the industry benchmark determined by industry players to measure the average or mean spending by telecoms consumers on airtime, which they, in turn, use to access voice and data services.

According to the President of Association of Telecommunications Companies of Nigeria (ATCON), Mr. Olusola Teniola, Nigeria’s telecoms ARPU in the first five months of the year stood at $3.81 which, when converted into naira using the rate of N360 to a dollar, amounts to N1,371 per user.

New Telegraph’s investigations revealed that in January, when active mobile subscriptions were 146.8 million, the subscribers spent an estimated N201.4 billion on airtime. In February and March, when active subscribers stood at 147.9 million and 148.9 million, the estimated consumer spending were N202.8 billion and N204 billion respectively.

By April, when the operators added 11.2 million active subscribers to hit 160 million, consumer spending on airtime stood at N219.5 billion.

In May, mobile subscriptions hit 162 million with an estimated recharge card purchase of N222 billion. However, despite the geometric growth in subscriber base witnessed in the five months, the MNOs have earned less than they could have earned from the growth, as the subscribers’ ARPU declined over the period. Throughout last year, ARPU stood at $6.

However, it came down to $3.81 this year according to ATCON, which means the subscribers are spending less than they did last year.

The declining ARPU in the industry may not be unconnected with the phenomenon of Over the Top (OTT) services which the operators said have been threatening their revenue base, as subscribers embrace the likes of WhatsApp, Skype, Facebook, among others, for communications. The operators have been lamenting over the operations of the OTTs, which they claim are now threatening their survival as revenues nosedive.

Speaking on the dwindling revenue for operators, President of the Association of Licensed Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, said the idea of technology neutrality, which the telecom regulator holds seriously, allows the OTTs to operate in Nigeria without any license, at the expense of the licensed operators. “They are eroding our revenue.

The licenses we have enable us to provide voice, data and text message services and these are the avenues, through which we make money. “However, today, people are no longer sending texts because of the OTTs.

Our voice and text message revenues have been affected because subscribers now prefer to send messages over WhatsApp or Facebook rather than text messages; video calls are also gradually replacing the regular voice calls. “If we must maintain the $70 billion investments in the telecom sector, government must balance authorisation between our services and these disruptive technologies.

We are losing money. People that have no presence and no license in the country are the ones making money. The regulator must be concerned about this.” However, the telecom regulator has said it would not accede to the request of telcos for the regulation of OTTs, but rather urged the licensed operators to accept the challenge to innovate and explore more efficient business models that would enable them compete favourably with OTT service providers.

NCC also believes that the OTTs are helping the telcos drive data consumption, from which they are now generating more revenue. ATCON, at the weekend, stated that the telecom industry annually contributes N450 billion in form of taxes to Nigeria’s economy. Teniola said that the industry had been paying the sum in the last five years to the three tiers of government.

Credit:: NewTelegraph

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