… Increment a burden too many on Nigerians – NATCOMS
‘… No justification for tariff increase’
…Telecom sector on brink of collapse – ALTON
The Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, recently confirmed that Nigeria’s telecommunications’ tariffs will soon increase. In this report, BENJAMIN SAMSON examines the impact of tariff hike on consumers as he seeks the views of experts and others.
Tijani had at the end of a stakeholders’ meeting with Mobile Network Operators in Abuja Wednesday said that very soon, the Nigerian Communications Commission (NCC) would approve the new tariffs and make it public to Nigerians.
“You have seen over the past weeks that there has been agitation from some of these companies to increase tariffs. They are requesting a 100 per cent tariff increase, but it will not be 100 per cent. We are still looking at that study, and NCC will come up with a clear directive on how we will go about it.
“We want to strike the balance as a government to protect our people, but also protect and ensure that these companies can continue to invest significantly,” he said.
Telcos’ push
The Nigerian telecommunications companies had proposed a 100 per cent increase in their tariffs, pending the approval from the federal government. According to them, the proposal, which has been submitted to the NCC, aims to address rising operational costs, including inflation and increased service delivery expenses.
The disclosure was made by the Chief Executive Officer, MTN Nigeria, Karl Toriola, during an interview on a national television station.
Toriola said the proposed tariff hike is necessary for the sustainability of the industry, which has been facing significant financial pressures due to rising operational costs.
He said, “We’ve put forward requests of approximately 100 per cent tariff increases to regulators. I doubt they’re going to approve that increase because they are very, very sensitive to the current economic situation in the country.”
Despite the challenges, Toriola expressed optimism that regulators would make the right decision, taking into account the realities of the sector.
The CEO emphasised that the focus is on ensuring the long-term sustainability of the industry, rather than short-term profitability.
“I believe we’re all on the same side, the policymakers, the regulators, our chairman of ALTON, Gbenga Adebayo, and the industry. We’re united because we share concerns about a few fundamental issues. First, human rights are critical to driving any economy. Without a sustainable industry, the broader economy and the well-being of the people will be negatively impacted.”
Toriola highlighted the pressure these rising costs have put on telecom businesses, making it difficult for many companies to maintain profitable operations.
Likewise, in a chat with this reporter, an operator in the telecommunications industry, Dr. Reginald Onuaha, backed the call for immediate increase in tariffs to prevent a potential industry collapse.
He warned that given the rising costs of operations, the telecoms sector in Nigeria is no longer sustainable under the current pricing structure.
He said, “This is a critical moment for the telecom industry. If we act now, we can establish a platform for growth and improve the user experience. Delaying necessary decisions will not only harm investor interests, many of whom are Nigerians feeling the same daily pains but will also stifle innovation and the development of new services.”
He acknowledged the financial stress Nigerians currently face, but emphasised that the telecoms sector cannot continue to operate sustainably without adjustments.
“We understand the cost of living is at the forefront of people’s minds. People who once recharged ₦5, 000 or ₦10, 000 now mostly recharge ₦200 or ₦300 because of limited disposable income. Yet, they still benefit from connectivity at pre-crisis rates. Reversing the gains of the last 22 years would be detrimental to Nigeria’s future.”
He called on telecom operators to keep Nigerian consumers central to their decision-making processes.
“If we don’t address these sustainability issues, the consequences will be much worse. Prices will need to rise, but this must be done thoughtfully, through dialogue and partnerships with the government to find lasting and manageable solutions.”
ALTON’s warning
In his view, the chairman of Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, warned that the telecommunications sector in Nigeria is on the brink of collapse, with its survival hanging in the balance.
He called for immediate and bold reforms to address the sector’s mounting challenges or risk a total breakdown of services in 2025.
Adebayo said that the telecommunications industry, which plays a critical role in Nigeria’s economy, is currently grappling with a host of issues, including soaring operational costs, skyrocketing energy prices, inflation, and volatile exchange rates.
He decried that despite these mounting pressures, telecoms tariffs have remained largely unchanged, leaving network operators in a precarious financial position, adding that without a revision of tariffs to reflect current economic realities, operators will no longer be able to guarantee the availability of services across the country.
He said, “If nothing is done, we might begin see in the new year grim consequences unfolding, such as Service Shedding; Operators may not be able to provide services in some areas and at some times of the day leaving millions disconnected, there will be significant economic Fallout, because businesses will suffer from a lack of connectivity, stalling growth and innovation. There will also be National Economic Disruption where Key sectors like security, commerce, healthcare, and education which rely heavily on telecom infrastructure, will face serious disruptions.
“As we navigate this near turbulent year for the sector, we are confident that history will judge us right for the role we have played in an attempt to rescue this sector. Stakeholders have stood together to uphold the values and importance of telecommunications in our society.
“However, let me be clear, our work is far from over. It is not enough to have kept the sector afloat; we must now focus on securing its future. The sustainability challenges we face today are not just a passing storm, they are a clarion call for decisive action to ensure that this industry thrives for generations to come.”
Continuing, he said, “Despite the dire warnings, we still believe that a better 2025 is possible but only if we act now. Let this be the moment when we come together, acknowledge the urgency of the situation, and commit to saving this sector.
“If we fail to act, history will record that we had countless warnings, yet we allowed inaction to jeopardise one of the most critical pillars of Nigeria’s development. But if we succeed, 2025 can be the year we turned things around a year of hope, resilience, and sustainability for the telecom industry.
“The time for action is now. Let us not wait until it is too late. ALTON stands ready to work with all stakeholders to ensure the survival and prosperity of this sector.”
Subscribers’ angst
However, the president of National Association of Telecoms Subscribers (NATCOMS), Chief Deolu Ogunbanjo, rejected the planned hike, saying the new increment would be one additional burden too many for Nigerian telecom users.
He said, “The decision of the NCC was very insensitive and not in the interest of Telecoms Services Consumers.
“The unrelenting rise in prices of goods and services in the country has made life extremely difficult for the generality of citizens who are the consumers of Telecom Services. The new increment is therefore one additional burden too many.
“Under the new tariffs regime, voice calls will rise from N11.00 to N15.40 per minute, short message services will jump from N4.00 to N5.60 and One GB data bundle will move from N1, 000 to N1, 400. This represents additional digital costs consumers will have to square up with at the beginning of a new year among other harsh economic realities of Nigeria of today.
“This, undoubtedly, is against public interest contrary to the false narrative of NCC that described the recent adjustments as pro-public interest.”
According to NATCOMS, the increment is an attempt to price telecoms services out of the reach of the generality of the citizens.
“Telecom Services are taxable services under the Value Added Tax Act. The Act was amended in 2019 by the Finance Act of that year to raise the tax rate from 5% to 7.5% which was 50% increment and the increment has been borne by the consumers of rate-able telecom services. That increment brought about untold hardship to our members, many of whom have been forced to cut back on their telecommunication requirements.
“As if that was not bad enough, the federal government got the National Assembly to enact the Finance Act of 2020. Section 37 of the Act amended Section 21 of the Customs, Excise Tariff etc. (Consolidation) Act by imposing an excise duty charge on Telecommunication Services. The then president, Muhammadu Buhari by an order prescribed 5% as the rate of the excise duty charge, chargeable for Telecommunication Services…”
The subscribers association said it was aware of the arguments of the telecom operators that there had not been any tariff increment in a decade, multiple levies slammed on them by different levels/tiers of the government and the Dollarisation of the costs of their equipment.
“But if the truth must be told, there are many other avenues through which the operators can generate funds to meet their rising operational costs without putting an unbearable burden on their consumers.”
Justification
Similarly, some Nigerians who spoke with this reporter said there was no justification for the increase. A businesswoman, Esther Ocha, vehemently kicked against the planned hike.
She said, “Why would they want to increase data and call tariffs, for what? What is the reason they want to increase it? Is it that inflation is affecting them or what exactly? There is certainly no justification for tariff increment in this challenging time.”
Another respondent, who preferred not to be named, said, “Telcos are extorting us, you buy data and it’s not even up to the time or the longevity of the time it’s supposed to be. You don’t even maximise this data as it should. Anything that they want to do now that will make them increase their tariff is extortion, they were already extorting us in the past, but now this is the extreme.”
Admonition
For financial expert and consultant at Lagos Business School, Dr. Leo Edorgor, telecom operators should explore capital market funding instead of implementing a proposed tariff hike of up to 100 per cent.
Citing the financial strain such increases would impose on consumers, he described capital market options, such as Initial Public Offerings, as “more sustainable solutions” for addressing rising operational costs.
He argued that these measures would prevent burdening subscribers, especially low-income users. He pointed to MTN Nigeria’s successful stock market listing as a model, urging other operators, including Glo and Airtel, to consider similar approaches.
“They can go to the capital market to raise funds. Nigerians will buy their shares, and I am confident it will be oversubscribed. MTN has already done this successfully; other operators like Glo and Airtel should follow suit.
“An IPO, which involves a company offering its shares to the public for the first time through the stock exchange, allows firms to raise capital by selling ownership stakes to investors.
“Funds raised this way could help telecom companies finance infrastructure upgrades, regulatory compliance, and technology investments without resorting to tariff increases,” he said.