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Telecoms Subscribers Dropped by 1.33% in Q1 2017 - NBS

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Tuesday, May 9, 2017, 5:25 PM /NBS 

Telecommunications in GDP and growth
In real terms, the telecommunications sector contributed N 1,663 billion to GDP in the fourth quarter of 2016, or 9.1%, which represents an increase of 1.1% points relative to the previous quarter.  

However, due to differing seasonal patterns, the telecommunications sector tends to account for the lowest share of GDP in the third quarter. The share of telecommunications in total real GDP had declined throughout 2010 to 2014.  

However, in 2015 and 2016, the Telecommunications sector fared better than the overall economy, and therefore the share of telecommunications in real GDP increased in both years, and was 8.9% in 2016.       

In contrast with the overall economy, real year on year growth in the telecommunications sector remained positive throughout 2016, and in the final quarter telecommunications growth increased slightly, from 0.95% to 1.03%.  

Subscribers as of March 2017
The total number of subscribers has increased rapidly over the past decade; at the end of 2005 there were 19,519,154 subscribers, but by the end of 2016 there were 154,529,780, which is equivalent to an increase of 12,273,693 every year. However, growth has been declining recently, possibly resulting from high market penetration leaving less room for large expansion.  

In March 2017 – the end of the first quarter – there were 152,467,198 subscribers, which represents a quarterly decline of 1.33%. Along with declines in the first half of 2016, this indicates that growth has become less consistent, after years of nearly uninterrupted growth. Year on year however, there was still an increase of 2.5%; a larger increase than at the end of any quarter since March 2016, reflecting the increases seen throughout the second half of 2016. Part of this growth arose from the inclusion of new providers.  

In the last quarter, NCC began recording data for a new technology type, “VoIP”. Whereas in the last report data was only available for Smile, this quarter data for NTEL has also been included. The quarterly and yearly growth rates without these new providers would have been -1.38% and 2.44% respectively. The numbers of subscribers with NTEL and Smile remain small, possibly due to the service being newer.

According to the data provided by NCC, there was no change in the number of CDMA or Fixed wireless subscribers relative to the previous quarter. In contrast, both GSM and Fixed wired subscriber numbers fell, by 1.38% and 1.58% respectively. However, due to the much larger number of GSM subscribers, this technology type is the main driver of movements in the total numbers of subscribers. The quarterly increase in VoIP subscriber numbers was 195.89%, or nearly triple, from 33,099 subscribers in December 2016 to 97,935 in March 2017.  

Year on year, both CDMA and Fixed Wireless subscriber numbers fell greatly, by 81.41% and 47.72% respectively. However, growth was buoyed by a 3.12% increase in the number of GSM subscribers, and the introduction to the data of the VoIP technology type.


Subscribers by Technology Type

In contrast to previous publications, subscriber data is broken into five sections according to the technology type used, following the inclusion of the newer VoIP technology by NCC.  This stands for “Voice over Internet Protocol”, and so far, the only provider recorded by NCC is Smile. The other technology types include two mobile technologies (Global System for Mobile Communications (GSM) and Core Division Multiple Access (CDMA)) and two fixed lines, either wireless or wired.   

Mobile subscribers using GSM dominate, and accounted for 99.69% of the total in March 2017, followed by CDMA with 0.14% of the total, whist fixed wired and wireless make up 0.08% and 0.02% respectively. VoIP accounted for 0.06%, higher than the share of 0.02% recorded at the end of the previous quarter.  

The dominance of GSM users has increased since March 2016 when 99.09% of subscribers used this technology type; largely as a result of the continuing decline of CDMA users. The number of subscribers using fixed wireless lines has also decreased sharply, although this was from a low level and therefore only had a small effect on the total. The proportion of fixed wired lines remained relatively stable.

The dominance of GSM over CDMA in the mobile technology is characteristic worldwide; GSM accounted for over 80% of the global market in 2009 Q2 according to industry estimates[1]. With GSM technology, it is cited as being easier to switch networks, and it is regarded as being more accessible for international use, especially given that some markets (such as in Europe) have mandated the technology by law. However, CDMA is more prevalent in the United States.  

Mobile Subscribers (GSM)
In March 2017, the total number of GSM subscribers was 151,999,197, which was 2,125,405 less than in December 2016, equivalent to a decrease of 1.38%. This was the first quarterly decline since the previous March. The quarterly growth rate has been declining since September 2016 when quarterly growth was 2.45%. A similar pattern was seen in the months leading to March 2016, which may indicate the emergence of a seasonal pattern, although this will become clearer as more data becomes available. Compared to the previous year there were 4,600,343 more subscribers, an increase of 3.12%. 

Airtel was the only GSM provider to record an increase in the number of subscribers relative to the previous quarter, of 1.58%, which means this provider recorded the highest growth rate for the second consecutive quarter. Their number increased by 540,196 to reach 34,656,605 between December 2016 and March 2017. This was nevertheless lower than the quarterly growth rate of 4.09% recorded in December 2016.   

Although the other three providers recorded decreases in their numbers over this period, the decrease recorded by Globacom was slight. With 37,328,827 subscribers, Globacom had 29,016 fewer subscribers in March 2017 than in December 2016, a decrease of only 0.08%. In percentage terms, Etisalat recorded the largest decline, for the third consecutive month, of 5.71% compared to 2.34% for MTN.  

However, given that MTN has significantly more subscribers, with 60,391,959 in March 2017 compared to 19,621,806 for Etisalat, their monthly decrease was larger in absolute terms. MTN lost 1,448,502 subscribers relative to December 2016, compared to a loss of 1,188,083 for Etisalat. 

Year on year the trends were notably different. Etisalat was the only provider to record a decrease in subscriber numbers relative to March 2016, of 2,255,736, or 10.31%. As illustrated by figure 3, this sets this provider apart from the others considerably; the provider to see the second lowest year on year growth was Airtel with growth of 2.33%, or nearly 13% points higher than Etisalat’s. Globacom and MTN recorded year on year growth in subscriber numbers of 7.86% and 5.87% respectively, which corresponds to an increase of 2,720,034 to reach 37,328,827 for Globacom, and an increase of 3,346,238 to reach 60,391959 for MTN.

 

These trends did not change the overall ranking of GSM providers in terms of numbers of subscribers. MTN remained the largest provider, and accounted for 39.73% in March 2017, a slightly lower share than the share of 40.12% at the end of the previous quarter. Airtel and Globacom each increased their share slightly over the same period, from 22.14% to 22.80%, and from 24.24% to 24.56% respectively.  

Mobile Subscribers (CDMA)
According to NCC, the number of CDMA subscribers in March 2017 was the same as in December 2016. In each month (and intervening months) there were 217,566 CDMA subscribers. This contrasts to the previous quarter in which a quarterly fall of 21.26% was recorded. Although there was no quarterly change, the was nevertheless an annual fall of 81.41% from 1,170,031 in March 2016. This was a smaller year on year than in the previous quarter of 89.87%, as the number of CDMA subscribers had been falling for some time before levelling out at the end of 2016. 

The number of Multilinks subscribers remained unchanged relative to the previous quarter, at 4,460. This has been the number of Multilinks subscribers recorded by NCC since May 2016. Whereas the number of Visafone subscribers had been falling, this trend ended in November 2016, from which time the number recorded by NCC has been unchanged at 213,106. As a result, the share of CDMA subscribers accounted for by each provider remained the same, with Visafone accounting for 97.95%.  In March of the previous year, Multilinks had 6,117 subscribers, and Visafone had 1,163,914, implying year on year declines of 27.09% and 81.69% respectively.

Fixed Wireless Line
As with CDMA subscribers, there was no change in the number of fixed wireless line subscriptions between December 2016 and March 2017 according to NCC; in each period, there were 26,865. Compared to March of the previous year, there was a drop of 24,518, or a 47.72% decline.  

Neither provider of fixed wireless line subscriptions recorded any change relative to the previous quarter, according to the NCC data. Multilinks continued to record 428 subscribers, and Visafone continued to record 26,437. This has been the case since November 2016. Consequently, since this time Visafone’s share of fixed wireless line subscribers has been 98.41%. Year on year however, Visafone lost 23,159 subscribers, a decrease of 46.70%, and Multilinks lost 1,359, a decrease of 76.05%.   

 

Fixed Wired Line
Relative to the end of the previous quarter, Fixed Wired Line subscriptions recorded the largest change in percentage terms, with a decrease of 1.58%. The number fell by 2,013 between December 2016 and March 2017, to reach 125,635. However, compared to the previous year, the number was stable relative to other technology types; an increase of 439 subscribers was recorded, or 0.35%.  

The four providers of fixed wired line technology saw markedly different trends. For the second consecutive quarter, MTN recorded the largest change in percentage terms. However, whereas last quarter the number of their subscribers declined, their number increased by 3,037 between December 2016 and March 2017, or by 46.76%. Since May 2014, the number of MTN fixed wired subscribers has been trending downwards, albeit inconsistently. However, the quarterly growth rate in March 2017 was the highest yet recorded, and brings the number to 9,532, higher than in any month since January 2016.  

By contrast, Century recorded a decline of 5,297, or 5.00%, in subscriber numbers between December 2016 and March 2017, and had 100,745 in the later period as a result. Glo Fixed and IpNX both recorded similar increases in absolute terms, of 104 and 109 subscribers respectively, to reach 12,747 and 2,589 subscribers in March 2017 respectively. However, in percentage terms, IpNX recorded a much larger increase, of 4.40% compared to 0.82% for Globacom, due to the latter’s larger number of subscribers. 

These trends resulted in an increase in the share of fixed wired subscriptions accounted for by MTN, from 5.09% to 7.59%, for IpNX, from 1.94% to 2.06%, and for Glo, from 9.90% to 10.15% between December 2016 and March 2017. Conversely, Century’s share fell from 83.017% to 80.19% over the same period.

Until February 2017, there had been only one month on record in which MTN had recorded year on year growth in fixed wired subscriber numbers, and that was only of 0.35%. By contrast, in March 2017 year on year growth of 27.25% was recorded; their number increased by 2,041 over this period. The opposite was true for Century, who had never recorded a year on year decline before 2017, but in March 2017 recorded a decline of 2,446 subscribers, or 2.37%. The trends previously recorded by the other two providers have been less consistent. Globacom recorded a year on year increase of 997 subscribers, or 8.49%, whereas IpNX recorded a decrease of 196 subscribers, or a decline of 7.04%. 
 

 

VoIP
In the previous quarter, NCC began to report data on a fifth technology type: Voice over Internet Protocol (VoIP), but only reported data for Smile. Since January 2017, data for Ntel has also been recorded. The number of Smile subscriptions grew from 33,099 in December 2016 to 39,345 in March 2017, a growth of 18.87%. However, this is still less than the 58,590 Ntel subscribers that were recorded in March 2017. In this period, Ntel accounted for 59.83% of subscribers, whereas Smile accounted for 40.17%. 


Internet Subscriptions  

GSM internet subscriptions
Of GSM users, a total of 89,972,792 had an internet subscription with one of the four carriers of Airtel, Etisalat, Globacom and MTN in March 2017. This means that of all active GSM lines, 59.19% had an internet subscription.  

This proportion had been increasing throughout 2014 and 2015, but this trend reversed in 2016, and since then the proportion has fallen in every quarter. In December 2015, the proportion was 65.26%, and in December 2016 the proportion was 59.61%. This was largely a result of a decline in MTN internet subscribers, although in recent quarters the decline in Etisalat internet subscribers has also contributed.

 

As in December 2016, there was a decline in GSM internet subscriptions relative to the previous quarter, and again it was driven by declines in both MTN and Etisalat subscription numbers. MTN recorded a quarterly fall of 3.89%, or 1,234,018 internet subscriptions. Etisalat recorded a larger fall in percentage terms, of 5.41%, a smaller fall in absolute terms, of 744,459 due to their smaller size as a provider of internet subscriptions.  

In March 2017, MTN had 30,519,351 internet subscribers and Etisalat had 13,008,481. The number of Airtel and Globacom internet subscribers was comparatively stable. Airtel recorded an increase of 60,215, to reach 19,423,760, an increase of 0.31%. Globacom recorded an increase of 11,022 to reach 27,021,200, an increase of only 0.04%. These changes resulted in only slight changes to the shares of GSM internet subscriptions accounted for by each provider.  

MTN’s fell from 34.56% in December 2016 to 33.92% in March 2017. The gap between Globacom’s share and MTN’s share continued to narrow, as the latter’s share increased from 29.40% to 30.03% over the same period. Airtel’s share increased from 21.07% to 21.59%, and Etisalat’s fell from 14.97% to 14.46% over the same period.  

Year on year the picture was similar. MTN and Etisalat recorded large declines in their internet subscriber numbers relative to the previous year, (as in the previous quarter) of 8.51% and 14.66% respectively. By contrast, Airtel’s number increased by 13.22% relative to March 2016, and Globacom recorded a relatively small increase of 1.85% over the same period. 

CDMA internet subscriptions
As in the case of mobile subscriptions, NCC has recorded no change to the number of CDMA internet subscriptions relative to the previous quarters. According to NCC, the two providers, Visafone and Multilinks, continue to record 30,305 and 4 internet subscribers respectively. The total of 30,309 internet subscriptions represents 13.93% of mobile CDMA subscriptions, as in the previous quarter. This is nevertheless an increase relative to March 2016, when the ratio was 10.68%, due to the larger decline in mobile subscriptions over this period. Visafone recorded a year on year decline of 75.71%, whereas Multilinks recorded a larger decline of 97.18%. Given the small number of Multilinks subscribers however, the decline in the total number was driven more by Visafone, and was 75.74%. 

Porting Activities
Porting activities refer to the transferal of subscribers to different network carriers. Therefore, incoming porting activities refer to those subscribers that have joined a network, whilst outgoing porting activities refer to those whom have left. The first quarter of 2017 recorded a decrease in the amount of porting activity, both relative to the final quarter of 2016 and the first quarter of 2016.  

Incoming
There was a total of 41,419 incoming porters in the first quarter of 2017 (across all three months). This compares with a total of 49,547 in the final quarter of 2016, and 51,301 in the first quarter of 2016, decreases of 16.40% and 19.26% respectively. Quarter on quarter, Airtel and MTN recorded increases, whereas Etisalat and Globacom recorded decreases. In contrast to the previous two quarters in which Airtel recorded the largest decreases in percentage terms, the number of porters switching to Airtel nearly doubled, increasing by 99.07%.  

However, this was from a low base, and in March 2017 there were still only 6,856, considerably below the number recorded by Airtel in previous periods. The increase of 10.10% incoming porters to MTN brought their total number to 4,817 in the first quarter of 2017, which is the highest quarterly number recorded for this provider. Etisalat recoded the largest decline of 29.06%, which brought their number to 27,249, although this was still by far the largest number of incoming porters recorded by any provider. Globacom recorded a decline of 24.72% which brought their number to 4,817. 

Although Etisalat remained the largest provider, their share fell from 77.52% in the final quarter of 2016 to 65.79% in the first quarter of 2017. By contrast Airtel increased their share by nearly 10% points, from 6.95% to 16.55%, and therefore became the second largest destination for incoming porters. MTN also increased their share, from 8.83% to 11.63%, but fell to being the third largest destination due to Airtel’s larger increase. Globacom remained the smallest destination of incoming porters for the third consecutive quarter, and their share fell from 6.69% to 6.03% between the last quarter of 2016 and the first of 2017.

Year on year there were large changes in the number of incoming porters switching to each provider, highlighting the volatile nature of the series. MTN recorded an increase of 256.0%, or more than triple. By contrast Airtel and Globacom recorded falls of 64.31% and 57.41% respectively. Etisalat’s year on year growth in incoming porter numbers was relatively stable, at an increase of 9.54%.



Outgoing
There was a total of 41,943 outgoing porters in the first quarter of 2017, a decrease of 12.38% relative to the final quarter of 2016 and of 20.82% relative to the number of outgoing porters recorded in the first quarter of 2016.   

Movements in outgoing porter numbers by provider were opposite to those in incoming porter numbers. MTN and Airtel both recorded decreases, whereas Etisalat and Globacom recorded increases, relative the previous quarter. MTN’s number fell to 11,463 from 16,504 in the previous quarter, a fall of 30.54%. This is the lowest number of outgoing porters recorded by MTN since the third quarter of 2013. Airtel recorded a decline of 20.93% to 12,462 outgoing porters in the first quarter, although this is from 15,760 in the previous which was their highest number recorded. Etisalat had 5,369 in the first quarter of 2017, an increase of 20.08%, and Globacom had 12,649, an increase of 13.59%.  

These trends resulted in Globacom overtaking MTN to record the largest number of outgoing porters, after their share increased from 23.26% in the previous quarter to 30.16%. In contrast MTN’s share fell from 34.48% to 27.33%, and meant it accounted for less outgoing porters than either Globacom or Airtel. This was the first time that MTN did not record either the first or second highest number, and also the lowest share recorded by MTN. Airtel’s share fell from 32.92% to 29.71%, and Etisalat’s increased from 9.34% to 12.80%. 

Year on year, there were large changes in the number of outgoing porters from each provider. MTN recorded a decrease of 63.07%, its largest year on year decline yet recorded. The other three providers each recorded increases. Globacom recorded the largest, with their outgoing porter numbers increasing by 76.86% relative to the same quarter of the previous year. Airtel and Etisalat recorded increases of 24.81% and 11.85% respectively.

Net Porting Activities
In the first quarter of 2017, Etisalat remained the largest beneficiary of porting activities, despite the large increase in outgoing porters, and decrease in incoming porters. However, in net terms they gained 21,880 porters, a significant fall from the 33,940 recorded in the previous quarter. Airtel and MTN had recorded similar losses from porting activities in the previous quarter, of 12,316 and 12,129 respectively, but these figures dropped to 5,606 and 6,646 in the first quarter of 2017. This had the result that Globacom became the provider to lose the most from porting activities; this was the first time that this was recorded. Globacom lost 10,152 porters in the first quarter of 2017, a bigger loss than the 7,819 recorded in the previous quarter. 

 

Tariff Information
Information is now available from NCC on the annual average cost per minute for phone calls made within Nigeria during tariff peak periods. This cost is the average across all providers, and is broken down into “On-net”, where calls are made to other numbers on the same network, and “Off-net”, where calls are made to other networks. As may be expected, the latter is more expensive: in 2016, the average cost per minute of calls to different networks was N12.64, which was 5.24% higher than the cost per minute of calls to the same network of N12.01. Relative to 2015, on-net calls fell in price by 9.77%, and off-net call prices fell by 13.84%. Due to the larger fall in off-net call prices, the gap between the two narrowed, from 10.22%, or N1.36 in 2015.    

Both On-net and Off-net calls have declined in price considerably over the last few years; since 2008, the only year in which the average cost per minute of calls increased was 2014, for both types of call. In 2008, the average cost per minute for On-net calls was N36.48, and for off-net calls was N42.00. Since then, on-net calls have decline in price by 67.08%, and off-net calls have declined in price by 69.90%. This possibly reflects increasing competition among providers vying for market share, as well as increased efficiency in provision of services. The large increase in the number of phone subscribers over this period (from 64,296,117 in 2008 to 154,729,780 in 2016) may have allowed providers to exploit economies of scale. 

Click Here to Download Telecoms Sector Q1 2017 (PDF) Report

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