[ANALYSIS] 9mobile may not have Telecom Subscribers in the next 10 Years

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9mobile lost not less than 10 million subscribers in the last seven years

9mobile, operated by Emerging Markets Telecommunication Services Limited, is one of the telecommunications companies operating in Nigeria and available data suggest the telco must innovate and urgently source funds to remain in the telecommunications business.

Statistics available on the Nigerian Communications Commission (NCC’s) website point to the fact 9mobile lost not less than 10 million subscribers in the last seven years. The operator, formerly known as Etisalat, transited to 9mobile in 2017.

Customers are the fulcrum of any business and if 9mobile continues to lose subscribers, going out of the telecommunications business might be imminent.

As Nigeria’s fourth-largest telecommunications network operator, the company had over 22 million subscribers and about 12.9 percent of the telecom market share.

Recall that Etisalat had obtained a $1.2 billion (N377.4 billion) syndicated loan in 2013 from a consortium of 13 Nigerian banks, which it failed to pay back. This led to the takeover by the banks on June 20th, 2017.

Following the interventions by the Nigerian Communications Commission and the Central Bank of Nigeria (CBN), new owners of 9mobile were announced.

Therefore, the company rebranded to 9mobile after the Abu Dhabi-headquartered Etisalat exited the Nigerian market following the debt servicing issues with the consortium of (lenders) banks.

9mobile, upon rebranding, promised to sustain and continuously provide innovative and value-adding propositions. These promises seem far-fetched because it has continued to lose customers to other players in the market.

Flip to November 2022, 9mobile which had 12 million+ customers with a 6 percent market share has lost 10 million users and about 6 percent market share.

Number of Users (Connected Lines)

The total number of connected telephone lines (GSM) in Nigeria is currently 212.2 million and 9mobile has only 12,842,575.

MTN is the largest operator by subscriber number, with a total active customer database of 81.2 million. Globacom is 59,395,911, and Airtel is 58,403,066.

Analysis of the data indicates that 9mobile lost at least 10 million subscribers over the last seven years (2016-2022).

Going by the statistics on NCC’s website, 9mobile lost 1,869,844 subscribers between September 2017 and September 2019. And within twelve months, September 2019 and September 2020, it lost 2,604,874 and it has been a downward trend.

Number of Internet Subscribers

The total number of Internet subscribers (GSM) currently stands at 152,220,957 million, while 9mobile can boost 4,778,159 million.

Leadership

9mobile has two executives, and the current Chief Executive Officer is Juergen Peschel. He assumed the role in March 2021. He replaced Alan Sinfield who left the CEO position less than one year after he took over from Stephane Beuvelet.

From the information available on his LinkedIn, Juergen Peschel has experience with a track record as a senior international C-level and board member within the Digital Transformation & Telecommunications industry, incl., key CxO and supervisory board positions with expertise in a vast variety of industry verticals and markets.

However, the current leadership at the company must have a deep sense of introspection and ask tough questions, especially why 9mobile keeps losing customers.

Quality of Service

Quality of service (QoS) is the collective effect of service performance that determines the degree of satisfaction of a user of the service, indicating the performance of a network and the degree to which the network conforms to the stipulated norms.

It is one of the significant factors that will determine if any telecom service provider acquires more customers or not. The more the quality of service at a telco improves, the more it becomes attractive to subscribers.

According to the NCC’s Quality of Service Report that covered KPIs in July 2020, 9Mobile failed to meet the industry’s key performance indicators (KPI) in some of the states in the country.

The NCC key performance indicators consist of the rate of dropped calls, call setup success rate, standalone dedicated control channel congestion rate, and traffic control channel congestion rate.

According to the regulator, the QoS standards ensure that consumers continue to have access to high-quality telecommunications services by setting basic minimum quality levels for all operators.

“These standards define the lower and upper bounds of acceptability of such issues as call setup success rate, call drop rate, handover success rate, call completion rates, etc., and commercial consumer issues such as access to customer care centers, billing integrity, and other characteristics that can be measured and improved.”

Financials

Checks by TechEconomy show that 9mobile has not released any financial reports. As of the time of filing this report, no such report was found online.

Available reports indicate that 9mobile raised a total of $230 million in August 2019 from Africa Finance Corporation.

The loan was secured to repay debts, finance various operating costs, and increase infrastructural investments.

According to industry sources, 9mobile remains in debt. It owes Huawei (telecom equipment company) approximately $140 million and IHS, its passive infrastructure supplier, another $40 billion. IHS is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world.

9mobile has been losing customers, both Internet subscribers, and non-Internet subscribers.

5G Spectrum

5G network has been described as the force to drive emerging technologies and telecom operators across the country are beginning to deploy the needed infrastructure.

MTN Communications Nigeria Plc and Mafab Communications Limited have obtained the license in Nigeria to deploy 5G. MTN has launched in selected locations while Mafab hasn’t launched.

According to findings, 9mobile has not shown the temerity to bid for the 5G license (3.5GHz spectrum) from the Nigeria Communications Commission (NCC). The second auction is already on the table.

Clearly, the body language from 9mobile shows that the mobile operator isn’t interested in investing in 5G technology, at least presently or the company does not have the financial muscle to bid for the 5G spectrum.

9 Payment Service Bank (9PSB)

9mobile is one of the licensed Payment Service Banks in the country (9PSB). PSBs are licensed by the Central Bank of Nigeria (CBN) and permitted to use technology and agency banking to mobilize deposits and facilitate transfers from unbanked consumers in rural regions and any other location in Nigeria where they exist.

In fact, amongst all the telecom operators that tapped into the payment service business, 9mobile was the first to be licensed by the CBN in 2020.

Becoming a licensed Payment Service Bank costs a whopping sum of money. The minimum share capital for companies or investors seeking to be granted a PSB license is Five billion Naira (₦5,000,000,000.00)

This also includes a non-refundable application fee of N500,000 (five hundred thousand Naira only) in bank draft, payable to the CBN. And a non-refundable licensing fee of N2,000,000.00 (Two Million Naira Only) in bank draft payable to the CBN.

This whole scenario raises an eyebrow that 9mobile seems to be focusing more on the payment service business than improving overall telecom infrastructure to overturn its decreasing customer base.