The harsh economic climate in the country is having its toll on the telecommunications sector. The earnings of telecommunications operators dipped significantly as over 60 million telephone lines became inactive at the end of the second quarter.
The Guardian learnt that the fall in the industry’s Average Revenue Per User (ARPU), among other factors, might have contributed to the slide in service providers’ earnings within the period.
ARPU is a measure used primarily by consumer communications and networking companies. It is defined as the total revenue divided by the number of subscribers.
The index, according to a source in the Ministry of Communications, who spoke to The Guardian anonymously, dropped sharply from N3,000 in 2001 to N500 in 2016, due mainly to the dwindling disposable income of subscribers amid the harsh economic climate.
This figure was corroborated yesterday by an official of a leading telecommunications company, who disclosed that ARPU has been on the decline in the last one year.
The official said: “For instance, in January and July 2015 it fell by 21.7 per cent and 15.7 per cent, a pattern that repeated itself in 2016.”
As a result, the about 62 million lines, which went dead, due to current economic challenges, might have cost the quartet of MTN, Globacom, Airtel and Etisalat a revenue of about N31 billion within the period under review.