Analysts at Cordros Securities Limited have expressed concern about the recent directive issued by the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, to the Nigerian Communications Commission (NCC) to revise the policy on SIM card registration and usage.
They firm noted that the directive if implemented, would have a neutral effect on telecoms companies’ earnings in the near-term, adding that there were also risks to the long-term earnings potential of the telecoms operating companies (Telcos).
Pantami, had in the directive, stated that the policy reversal was based on the need to combat the spate of insecurity in Nigeria.
Assessing the minister’s directive, Cordros Securities stated that SIM card ownership limits were commonplace across the world, especially in developing countries.
It however said with a three SIM limit, Nigeria would likely fall in line with Cuba, Lebanon and Singapore, adding that it was unclear if there would be exemptions for corporates with large numbers of SIMs registered, since revenues from corporates made up about 12 per cent of MTNs revenue in 2019.
Looking at the neutral impact and risks of the directive on telecoms business, the report stated: “We see the NIN stipulation as a risk to mobile money adoption and potential revenues expected to reach $889 million by 2023 for telcos, and financial inclusion targets of 95 per cent by 2024 for the government.
“The unbanked population of about 60 million, which is the target of mobile money services, will be most affected by the NIN stipulation due to the significant challenges surrounding registration process.”
The report further stated that the first directive was not new, with NCC stating this as far back as October 2019.
It however said enforcement had been weak, with customers still given the option of using any of the range of “National IDs” to register.
The second stipulation, however, “is where our concern lies. Although the NIMC Act was passed in 2007, the National Identity Management Commission (NIMC), the body in charge of issuing NINs and maintaining the database, was not established until 2010.”
“Worse-still, the commencement date for the enforcement of the NIN was on 1 January 2019, six years after the initial SIM registration process ended.
“This implies majority of all registered SIMs in the country do not have NINs attached. Mandating that all SIMs are updated with the NIN effectively re-starts the entire SIM registration process from square one, especially if done in the same manner as the initial phase,” the report added.
Part of the directive, which was signed by the Technical Assistant on Information Technology to the Minister, Dr. Femi Adeluyi, had stated: “This is in line with the Powers of the Minister as stated in Section 25(1) of the Nigerian Communications Act 2003- the Minister shall, in writing, from time to time notify the Commission or and express his views on the general policy direction of the federal government in respect of the communications sector.
“The revision of the Policy was based on the feedback received from the security agencies following the successful revalidation of improperly registered SIM cards in September 2019 and the blocking of those that failed to revalidate their SIMs.”
The policy was expected to include provisions such as: Ensure that the National Identity Number (NIN) becomes a prerequisite for Nigerians registering new SIM cards, while for foreigners, their passports and visas should be used, while already registered SIM cards are to be updated with National Identity Number (NIN) before December 1, 2020; ensure that only fully accredited agents support the SIM card registration process without pre-registering SIM cards themselves, while the eventual registration should be done by the operators; there should be a maximum number of SIM cards that can be tied to a single individual, possibly a maximum of three; ensure that no unregistered SIMs are ever allowed on mobile networks; ensure that subscribers can easily check the number of SIM cards registered to their name, along with the associated phone numbers and networks.
Others include, to ensure that mobile network operators fortify their networks against cyberattacks and ensure that they adhere to the provisions of the Nigeria Data Protection Regulation (NDPR); and also ensure that SIM cards that have been used to perpetrate crimes are permanently deactivated. The Minister ordered NCC to provide him with the progress reports on the implementation of the revised policy.
