$1.2bn Debt By Etisalat Leads To Loss Of 2.9 Million Subscribers

Findings by our correspondent showed that as of September 2016, there were 22.5 million active subscribers on the network but the figure dropped to 20.8 million by December. This represents a loss of 1.7 million subscribers within three months.

The drop, thus, represents a loss of about N3.1bn potential revenue for Etisalat for the quarter, going by the industry’s average revenue of N1,830 per user, according to the quarterly subscriber operation data obtained from the Nigerian Communications Commission.

Similarly, in the first quarter of this year, the telco lost 1.2 million subscribers. This is also estimated to cost the telecoms company potential revenue of about N3.8bn.

Fact checks showed that between September last year and end of March, this year, Globacom increased its subscribers from 36.9 million to 37.3 million; Airtel grew from 34.1 million to 34.6 million but MTN dropped in subscriptions from 60.5 million to 60.3 million.

Observers conversant with Etisalat’s operations said the poor network investment, occasioned by $1.2bn debt to eight Nigerian banks, was adversely affecting the company’s ability to deliver quality service and impeding its expansion.

“As such, we are beginning to see an exodus of subscribers from Etisalat network to rival networks, most especially now that subscribers have options through the Mobile Number Portability,” a source conversant with the Etisalat’s operations said.

On the contrary, a former senior manager of a rival telco, MTN, disagreed that Etisalat’s quality services had disappeared because of the loan crisis and that subscribers were porting away due to poor services and reduced expansion.

She said, “It would rather be convenient to say that due to steps taken to pay the $1.21bn debt, it (Etisalat) currently doesn’t have the kind of cash flow for product development, product activation, promos and advertising, and other activities that should retain its customers at the bottom of the pyramid.

“The customers at the bottom of the pyramid are about 90 per cent and are those who don’t have any permanent loyalty to a particular telecoms company and are easily taken aback by small things like promos and advertising promises, bearing in mind that getting another SIM card costs just only N300.

The source, who spoke on condition of anonymity since she is no longer in the industry and would not want to be seen as working for a particular telecoms firm, said, “As a matter of fact, Etisalat has the best services – voice and data – in the country. Even when I worked in MTN until recently, most of us kept Etisalat as a second SIM card.”

Apart from owing eight local banks, it was also discovered that the company owed tower firm, IHS Nigeria.

This was made known by the IHS, which said that it had experienced instability in terms of timing of settlement of invoices with certain customers including Etisalat.