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SIM re-registration limits MTN Nigeria's base growth

By , ITWeb
Nigeria , 30 Oct 2019

SIM re-registration limits MTN Nigeria's base growth

The mandatory SIM card re-registration process undertaken by MTN Nigeria resulted in 0.6 million active subscribers being disconnected and limiting the operator's base growth.

This is according to MTN Nigeria chief executive officer Ferdi Moolman, who is quoted in the company's unaudited results for the nine months ended 30 September 2019.

According to the results, published via SENS statement, MTN Nigeria recorded 61.6 million subscribers, representing a 0.1 million increase quarter-on-quarter, while active data users increased by 1.6 million to 22.3 million and service revenue also increased by 12.1% to NGN854.9-billion.

Moolman said the company's performance was encouraging, despite a challenging operating environment.

"We sustained double-digit growth in service revenue led by growth in voice and data revenue. We recorded 61.6 million subscribers, representing a 0.1 million increase QoQ. We were required to undertake a SIM re-registration process, which resulted in a disconnection of around 0.6 million active subscribers, limiting base growth," he said.

"During the quarter, we focused on the end-to-end optimisation and repositioning of our data offerings. We made significant investments in accelerating 4G network expansion; and leveraging 800MHz spectrum activated in Q2 2019, we launched enhanced 4G+ services in Lagos, Abuja, and Port-Harcourt."

The CEO added that the company changed its pricing strategy... "placing us in an even stronger competitive position going forward. As a result, we have begun to see promising results with active data subscriber net additions of 1.6 million and 4G population coverage at over 35% in 64 cities. Data traffic volume also increased by over 68%, while data revenue rose by 34.9% year-on-year,"

The operator grew its service revenue to N854.9 billion (+12.1% y-o-y), driven by increases of 10.1% and 34.9% respectively in voice and data revenue.

Mooman reiterated that voice remains a key contributor to service revenue at 73.5% (Q3 2018: 74.8%), with its growth supported by an increase in subscribers, relatively stable tariffs "and our targeted segment offerings using our customer value management toolkit."

According to the results, data contributed 18.0% (Q3 2018: 15.0%) to service revenue, with strong growth attributable to the recent data price revamp, consumer education and improved 4G coverage after the company obtained access to the 800MHz spectrum in Q2 2019.

"We recorded a significant increase in both active data users and the number of smartphones on our network, which resulted in higher data usage. We added 1.6 million smartphones on our network, increasing smartphone penetration to 41.7%. The number of active data subscribers increased by 7.6% to 22.3 million, driving data traffic growth of 68.9%," Moolman continued.

USSD issue

In October 2019 Nigeria's communications minister Isa Pantami blocked a planned move by MTN to charge users N4 (US$0.013) per every four seconds for Unstructured Supplementary Service Data (USSD) access to banking services.

Pantami gave the Nigerian Communications Commission (NCC) the nod to suspend the proposed charge, scheduled to be enforced from 21 October, after notification by the operator to subscribers sparked a social media furore.

MTN's message reads: "As requested by your bank, from Oct 21, we will start charging you directly for USSD access to banking services. Please contact your bank for more info."

In its results presentation, the company reaffirmed its determination to find a solution that is affordable to the consumer and "drives maximum uptake and use of financial services."

An excerpt from the results statement reads: "Banks had always been on a corporate billing plan that allows them to pay the USSD access fees at a wholesale price. We view this as an efficient model that eliminates separate charges by the banks and telecoms companies, which in the end ensures billing transparency. We believe that costs associated with USSD banking services should be charged to the consumer once as with other USSD services we provide. It is therefore imperative that all parties engage towards a solution, putting the consumer at the fore of all decisions. MTN remains committed to the most effective solution for our customers as we work each day to make their lives easier."

Going forward, MTN said it will prioritise 4G network expansion, and active data subscriber growth, as well as achieve a target of 100,000 agents to its launched super-agent services.

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