Nigerian telcos, MTN Nigeria and Airtel Africa declared a loss of N485.69 billion in the second quarter of 2023.
This is mobile subscriptions dropped by 6.1 million mobile subscriptions in the same period.
Data obtained by Punch from the Nigerian Communications Commission showed that the total number of mobile subscriptions in the country fell to 219.77 million as of the end of June 2023, from 225.82 million at the end of December 2022.
MTN Nigeria, Airtel Africa, Globacom, and 9mobile recorded mixed fortunes during the quarter.
MTN (84.66 million), while still retaining its spot as the largest telco, lost 6.89 million mobile subscriptions in the quarter under review. Airtel lost 137,828 subscriptions to close the quarter with 60.19 million.
Glo and 9mobile both gained subscriptions, as the former’s subscriptions grew by 533,582 to 61.33 million as of the end of March 2023, while 9mobile’s subscription base increased by 437,823 to 13.58 million.
Also, teledensity, the number of active telephone connections per 100 inhabitants living within an area, continued its free fall and declined to 115.30 per cent in the second quarter from 118.48 per cent in the first quarter.
The decline in mobile subscriptions has been blamed on the impact of the country’s economic crisis, naira scarcity, and the decline in purchasing power.
In MTN’s first quarter report, the Chief Executive Officer, Karl Toriola, said, “We continued to experience headwinds in our operating environment in the first quarter of 2023.
“The impacts of the ongoing global macroeconomic and geopolitical developments on energy, food, and general inflation were exacerbated locally by petrol and cash shortages experienced during the period. This placed additional pressure on economic activity, consumers, and businesses.”
In Q2, 2023, MTN stated that increasing the minimum age requirement from 16 to 18, following a new NCC directive, affected its active subscriber base.
It stated, “In Q2, we implemented the minimum age requirement for SIM registration from 16 to 18 years, which impacted the run rate of gross connections and active data subscribers in the quarter.”
Meanwhile, MTN and Airtel had stated, in their second quarter/half-year reports, that they lost N485.69bn to the recent fall in the naira’s value.
They said the steep devaluation of the naira following the Central Bank of Nigeria’s attempt to close the gap between the official and parallel rates of the naira had negatively impacted their businesses.
The value of the naira has taken a beating since the Central Bank of Nigeria directed banks to remove the rate cap on the naira at the official Investors’ and Exporters’ Window of the foreign exchange market.
The CBN said, “The Central Bank of Nigeria wishes to inform all authorised dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters Window.”
This was done to allow for a free float of the local currency against the dollar and other global currencies.
On June 14, when the apex bank made the announcement, the naira closed trading at 664.04/dollar on the I&E window from 471/dollar the previous day. Since then, the naira has fluctuated heavily, trading consistently above N700/dollar.
According to MTN, there was a 60 per cent movement in the exchange rate, which led to a N131.50bn forex loss for the firm.
MTN said, “Net finance costs increased by 164.3 per cent due to increased borrowings and an unrealised forex loss of N131.5bn (H1 2022: N13.6bn) on our net foreign currency liabilities following the significant devaluation of the naira.
“Overall, profit after tax (excluding non-controlling interest) declined by 29.3 per cent but would have been up by 13.4 per cent excluding the forex loss.”
The firm noted that it expects to be further impacted by the second half of the year. It said, “These policy reforms are expected to be positive for the economy in the medium to long term.
“However, in the short term, they have created additional financial burdens on consumers and businesses, and these will be fully reflected in the pressures on our margins in H2.”
Airtel declared N354.19bn ($471m) in forex loss and a loss of $151m too.
Commenting on its loss, Airtel said, “Profit after tax was negative ($151m) driven largely by a foreign exchange loss of $471m recorded in finance cost before tax and $317m after tax because of the devaluation of the Nigerian naira in the month of June 2023.
