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Drop in telecom firms’ revenues envisaged in 2013

By BusinessNews Staff on November 14, 2013

A sharp drop is expected in the revenue target of the telecommunications industry in 2013, an investigation has shown.

This will be propelled by the earlier declaration of a state of emergency in Adamawa, Borno and Yobe and its subsequent extension this month, coupled with a drop in subscriber base of telecommunications firms lately.

President Goodluck Jonathan had declared a state of emergency in these states on May 14 this year, ordering extra troops in to crush the Islamist sect, Boko Haram, whose insurgency against the state has killed thousands of people in the past three years.

The authorities had cut the mobile network in Borno State in the same week to disrupt Boko Haram’s operations.

Spokesperson for the military task force in the state, Lt. Col. Sagir Musa, was quoted then as saying that the ban was imposed after evidence emerged that Boko Haram used satellite phones to coordinate attacks on civilians, including attack on two schools.

The statement read in parts, “Effective from June 19, 2013, the Joint Task Force imposes a ban on the use and sale of Thuraya phones and accessories. Anyone seen with Thuraya phones, recharge cards and accessories will be arrested.”

The extension of the state of emergency in these states this month is expected to further affect revenue streams accruable from these locations.

The Presidency, in a letter this month, had said security challenges in Adamawa, Borno and Yobe states compelled it to seek an extension of the emergency rule for another six months from November 12.

In the letter dated November 5, 2013, the President noted that members of Boko Haram were still holding sway in some parts of the affected states.

He said an extension of the state of emergency was pertinent in order to restore full normalcy.

Meanwhile, with the active telephone lines dropping by 5.6 million in July alone, the fear of a fall in revenue of the telecoms companies has continued to mount.

The number of active telephone lines in the country fell by 5,601,812 in July, according to the Nigerian Communications Commission.

The number of active subscribers in July was 114,760,406, as against 120,362,218, which was recorded at the end of the second quarter of the year.

Based on an Average Revenue Per User of $7 (N1,092), which has been the parameter in the industry for a while now, the telecoms firms may have recorded a drop of over N6.1bn in revenue within one month.

With the current ARPU figure, the active telecoms subscribers in the country were said to have spent about N131.4bn on voice calls and Short Message Services in June this year, given a subscriber base of 120.36 million recorded in the period.

With the drop in subscriber base, the spending for the month of July might not have been more than N125.3bn, depicting a fall in revenue of about N6.1bn based on the drop in subscriber volume.

[Punch]

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