Africa's largest cellular operator MTN could lose subscribers in its largest market, as another SIM card registration law comes into effect.
Nigeria's new SIM card registration legislation has many analysts concerned about MTN's growth in the country. Nigeria accounts for 28.8 million subscribers out of the operator's total base of 108.5 million.
At the end of September, according to the latest available figures, the country accounted for 58% of the region's subscribers, while West and Central Africa made up 46% of MTN's total base.
MTN has already been hit by SIM card registration law. The South African Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) trimmed subscribers last year.
In October, the company said it had lost 800 000 users, or 4.7% of its South African subscriber base, due to the Act.
Tight deadlines
Nigeria, which has about 70 million cellular subscribers, will start the registration in March and subscribers have six months in which to register, or be cut off.
Frost & Sullivan ICT industry analyst Spiwe Chireka believes the Nigerian deadline is tight. She notes that the Democratic Republic of Congo had to extend its deadline for a year due to the low numbers of people with identity documents.
Concerns
Chireka points out that Nigeria is MTN's largest market. “We are likely to see a significant impact; more of an impact than we saw in SA.” With a tight deadline, mobile operators are likely to offer incentives to encourage subscribers to register, she adds.
Imara SP Reid analyst Steve Meintjes says the change in legislation in Nigeria “could put a dampener on growth for a while”. He says the company's share is not a good buy at the current price because of the expected slowdown in growth.
“All we need now is for some other emerging markets to think RICA-type regulation is a good idea,” adds Meintjes.
MTN was not available to comment this morning.
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