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Nigerian Telecom Tariffs to Increase: Government Balances Consumer Interests with Industry Sustainability.
The Nigerian government has announced plans to adjust telecom tariffs, marking the first increase in over a decade. Dr. Bosun Tijani, the Minister of Communications, Innovation, and Digital Economy, revealed that while Mobile Network Operators (MNOs) have requested a 100% hike, the approved increase will be significantly lower.
RELATED: Nigeria’s tariff dilemma: Government fears operators’100% hike demand could harm digital inclusion
During a stakeholders’ meeting in Abuja on Wednesday, Dr. Tijani emphasized the government’s commitment to striking a balance between protecting consumers and ensuring the sustainability of telecom operators.
“We understand the challenges faced by telecom operators and the need to invest in infrastructure. However, the government remains committed to protecting Nigerians from excessive costs while fostering industry growth,” the minister stated.
The Nigerian Communications Commission (NCC) is currently finalizing the tariff adjustments, which will be announced within weeks.
Why Are Telecom Operators Seeking a Tariff Increase?
The telecom industry has faced mounting financial pressures due to:
- Skyrocketing Operational Costs:
- Rising diesel prices for powering base stations.
- Increased importation costs for telecom equipment.
- Depreciation of the naira and volatile exchange rates.
- Stagnant Tariffs:
- Telecom tariffs have remained unchanged for over 11 years, despite inflation and escalating costs.
- Economic Impact:
- Operators warn that without tariff adjustments, sectors like commerce, healthcare, education, and security—heavily reliant on telecom infrastructure—could face significant disruptions.
Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), warned last month that operators might begin service shedding by January 2025 if regulatory actions were delayed.
Stakeholder Perspectives on the Proposed Tariff Hike
Federal Government’s View
Dr. Tijani emphasized that the tariff hike is not just about increasing costs but ensuring “meaningful connectivity” for Nigerians.
“We need to invest in infrastructure to improve service quality and ensure Nigerians have access to reliable connectivity,” he said.
The government plans to partner with private operators to share the financial burden of infrastructure development, breaking from the past practice of leaving investments entirely to private firms.
Telecom Operators’ Position
Telecom giants such as Airtel and MTN have voiced their concerns over the financial strain caused by stagnant tariffs.
- Airtel Nigeria:
Airtel CEO Dinesh Balsingh (represented by spokesperson Femi Adeniran) stated:“The economic realities of rising operational and capital costs necessitate the proposed tariff adjustments. This will ensure the sector’s sustainability while unlocking benefits for Nigerian consumers.”
- MTN Nigeria:
MTN CEO Karl Toriola highlighted the risk of operational collapse, citing the company’s struggle to maintain quality service for its 78 million subscribers.“The industry cannot sustain itself under the current structure,” Toriola warned.
Nigerian Communications Commission (NCC)
Dr. Aminu Maida, Executive Vice-Chairman of the NCC, reassured Nigerians that the approved tariff adjustment would not reach the 100% increase proposed by MNOs.
“We are focused on balancing consumer protection with the industry’s sustainability. A final decision will be made after ongoing stakeholder engagements,” Maida said.
To enhance transparency, the NCC is pushing for simplified billing templates to help consumers understand charges for calls, SMS, and data.
Key Challenges Facing Nigeria’s Telecom Industry
- Rising Costs:
- Operators face unprecedented diesel prices and currency volatility.
- Infrastructure Needs:
- Significant investment is required to expand and upgrade networks to meet growing demand.
- Consumer Concerns:
- Nigerians have raised concerns over “data theft” and hidden charges, urging more transparent billing systems.
Implications of the Tariff Increase
The tariff adjustment is expected to:
- Enhance service quality, ensuring reliable and faster connectivity.
- Support network expansion in underserved areas, promoting digital inclusion.
- Address the financial viability of telecom operators, ensuring they remain operational and competitive.
However, the hike may also place additional financial burdens on consumers already grappling with economic challenges.
Looking Ahead
The Nigerian government’s decision to approve telecom tariff adjustments highlights the need to balance industry sustainability with consumer affordability. As the NCC prepares to unveil the new tariffs, all eyes remain on how these changes will impact Nigeria’s digital economy and the over 200 million telecom subscribers nationwide.
By addressing the root causes of financial strain in the telecom sector and improving service transparency, the government hopes to foster a more resilient and inclusive digital ecosystem for all Nigerians.
- Additional Report: News Agency of Nigeria (NAN)
