Telcos lose N113bn monthly due to inactive lines

Telecommunications operators in Nigeria are currently losing N113 billion monthly because of the growing trend of inactive lines, Daily Trust has learnt. The estimate is brought about by considering prevailing average revenue per user (ARPU) in the Nigerian telecoms industry and the numbers of connected but redundant subscriber’s identity module (SIM) cards in the country. […]

Telecommunications operators in Nigeria are currently losing N113 billion monthly because of the growing trend of inactive lines, Daily Trust has learnt.

The estimate is brought about by considering prevailing average revenue per user (ARPU) in the Nigerian telecoms industry and the numbers of connected but redundant subscriber’s identity module (SIM) cards in the country.

Based on August data of the latest industry statistics by the Nigerian Communication Commission (NCC), the total connected lines in the country stood at 226.7 million, the actual number of active while lines was 152.8 million, leaving 73.9 million non-functional.

Telecoms operators told Daily Trust that ARPU, which refers to the industry index for the average monthly spending of mobile subscribers in a telecoms market, currently stands at between $4- $5.

Using $5 as ARPU with the official exchange rate at N305 to a dollar, mobile number operators (MNOs) lose N1,525  monthly on every inactive line and collectively, N113 billion as this multiplies the 73.9 million inactive subscriptions.

Industry analysts have explained that operators lose potential money anytime SIM card is activated for subscribers but same is abandoned instead of being used to access mobile services such as voice or data.

Analysts further clarified that failure of a subscriber to load airtime on his or her line does not make the line redundancy, as through interconnect rate, the operators can still generate money.

Meanwhile, the telecoms umpire, NCC, has explained that a line becomes redundant after it is not researched, used to make or receive call, or any other service for a period of 90 days.

“Competition in the telecoms sector is getting keener by the day and this makes subscribers have the tendency to change their existing line for another preferred network, since they now have multiple options,” Olusola Teniola, President of Association of Telecommunication Companies of Nigeria (ATCON) has said.

He added that, if subscribers find better tariff plans or a more quality service on a new network, “they can switch freely and then keep the old line in inactive mode, if they choose to.”