In a challenging second quarter of 2023, Nigeria’s mobile subscriptions witnessed a significant decline of 6.1 million, plunging the total number of mobile subscribers to 219.77 million by the end of June 2023, according to data from the Nigerian Communications Commission.
The economic crisis, naira scarcity, and reduced purchasing power have been cited as the main reasons for the decline.
MTN Nigeria and Airtel Africa, two prominent telecom operators, bore the brunt of the downturn, collectively reporting a staggering loss of N485.69 billion during the same period. MTN, the largest telco with 84.66 million subscribers, lost 6.89 million mobile subscriptions, while Airtel saw a decline of 137,828 subscribers, ending the quarter with 60.19 million.
However, amidst the decline, Glo and 9mobile managed to gain subscriptions. Glo’s subscriber base grew by 533,582 to 61.33 million by the end of March 2023, while 9mobile’s subscriptions increased by 437,823 to 13.58 million.
The adverse impact of the economic crisis and the drastic fall in the naira’s value took a toll on the telecom companies’ financial performance. MTN and Airtel reported forex losses of N131.50 billion and $471 million, respectively.
The significant devaluation of the naira caused a 60% movement in the exchange rate, further adding to their financial burden.
MTN attributed part of its subscriber loss to the new NCC directive, which increased the minimum age requirement for SIM registration from 16 to 18 years. This policy change impacted the company’s active subscriber base.
While the Central Bank of Nigeria’s decision to allow for a free float of the naira was seen as a positive step for the economy in the long term, it led to the naira’s significant devaluation, adversely affecting businesses like MTN and Airtel.
Both companies anticipate further financial pressures in the second half of the year due to these policy reforms.
As the telecommunications industry faces mounting challenges amid the ongoing economic crisis, the companies are navigating a difficult operating environment.
The impact of these developments has raised concerns about their profitability and long-term sustainability.
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