Nigerians Spent N3.208 Trillion On Airtime Despite Recession In 2017

It appears the spate of economic recession in Nigeria hasn’t hinder Nigerians from spending expensively on smart devices for communication purposes. Despite the economic recession, which started in Nigeria in 2016 and lingered till a greater part of 2017, Nigerian telecoms subscribers across mobile networks still spent a huge chunk of their household income on telecoms services last year, New Telegraph investigations have revealed.

According to findings, a whopping N3.208 trillion was expended by Nigerian subscribers as the estimated amount used to buy airtime credit to access voice and data services on their mobile devices across mobile network operators (MNOs).

The amount also represents the estimated revenue raked in by various telecoms companies across Global System for Mobile Communications (GSM),Code Division Multiple Access (CDMA) and fixed wired/wireless networks. In 2015 and 2016, estimated spending of subscribers on airtime purchases to access both voice and data services on the devices were conservatively valued at N2.8 trillion and N3.3 trillion respectively, as analysed by this newspaper.

It was gathered that the airtime credits were purchased across different platforms such as the physical recharge card option, the virtual top-up (VTU) done through USSD code, subscribers’ bank accounts domiciled on their mobile devices, vending on web-based platforms, as well as on Automated Teller Machines (ATMs).

The estimated airtime spending and revenue for subscribers and telcos respectively, was arrived at using the monthly active subscriber base for the 12-month period and the Average Revenue Per User (ARPU) data in the nation’s telecoms industry.

ARPU is the industry’s 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. Throughout 2017, industry ARPU in the country’s $70 billion telecommunication market floated around N1,842. Hence, the N3.3 trillion as conservatively arrived by multiplying the underlining ARPU figure of N1,842 with active subscriber base from January to last December, as released by the telecoms umpire.

With 155.1 million active subscriber base on mobile networks in January last year, the estimated household spending on airtime stood at N285.6 billion. In February and March same year, when active subscribers stood at 154.1 million and N154.4 million and with the ARPU of N1,842, the estimated consumer spending were N283.8 billion and N284.4 billion respectively. Also, airtime spending last April, May and June were estimated at N274.8 billion; N267.6 billion and N263.4 billion when active telephone users across different mobile networks seated at 149.2 million, 145.3 million and 143 million in that order.

In addition, operators raked in N256.2 billion and N256.7 billion in July and August as declining subscribers dropped to 139.1 million and 139.4 million respectively. By September and October, when active subscribers were 139.9 million and 140.7 million, the amount spent by the subscribers on airtime purchase were estimated at N257.6 billion and N259.1 billion respectively. Also, the subscriber spending stood at N262 billion when active subscriber base on mobile networks rose to 142.2 million in November and N267 billion expended on airtime last December at a time active subscribers reached 145 million.

Meanwhile, the decline in subscriber spending between 2016 and 2017 had been attributed to the sharp decline in the active subscriber base in the country and the fluctuation that greeted the rebound efforts. Telecoms stakeholders, including the NCC and telecoms companies under the aegis of the Association of Telecoms Companies of Nigeria (ATCON) and Association of Licensed Tele-coms Operators of Nigeria (ALTON), have attributed the decline to a number of factors, especially the effect of over the top (OTT), the tough economic situation and the high rate of subscriber identity module (SIM) churning.

According to them, one of the major threats that have also continued to rear their heads since beginning of this year is the increasing realisation on the part of telecoms companies that they are losing substantial amount of revenue to OTT platforms such as Facebook call, Skype, WhatsApp, BBM, Viber, among others on their revenue. Already, telecoms operators in Nigeria have called on the NCC to regulate OTT, but the regulator has said it does not regulate technology, but charged operators to be innovative.

“OTT has come to stay and the only thing remaining for the mobile networks is to be innovative,”

Chairman, ALTON, Mr. Gbenga Adebayo, said. He noted that with the increasing usage of datadriven OTT platforms to chat and make VoIP calls by subscribers, the number of voice subscriptions has, over the first 10 months last year, dropped from over 155 million to 140 million as at last October, representing a loss of 15 million subscribers.

“People use OTT platforms to make IP calls instead of the traditional voice calls, which is relatively cheaper for them,”

he said, stressing that the drop in voice subscriptions was resulting in declining revenue for telecoms operators.

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