By Adedapo Adesanya
Telecommunication operators in Nigeria, including MTN, Airtel and others, are seeking a 100 per cent increase in tariff as stakeholders battle it out for a much-expected rise in the cost of phone calls, SMS, and internet data subscription.
The chief executive of MTN Nigeria, Mr Karl Toriola, said this in an interview with Arise News on Thursday, though he expressed doubts that the regulator, the Nigerian Communications Commission (NCC), would accept this.
“Now, we’ve put forward requests of approximately 100 per cent and type increases to the regulators,” he said.
“I doubt they’re going to approve that quantum of increases because they’re very, very sensitive to the current economic situation in the country. But we’re hopeful and optimistic that the realities are staring us in the face and the right decisions will be taken for the sustainability of the industry,” he added.
Mr Toriola lamented that the the sustainability of the telecommunications industry in Nigeria needs to be addressed, if not, it could negatively impact Nigeria’s economy.
He painted a grim reality of the escalating costs of operations, which he said has been eroded by high inflation, Naira devaluation, and rising fuel prices.
“Telecommunications is a fundamental human right these days and a critical element towards driving an economy. And if you don’t have a sustainable industry, it’s going to affect your economy and the well-being of people. Yes, everyone in Nigeria has gone through difficult times in the last few years due to economic challenges, inflation, devaluation, et cetera, et cetera.
“But the challenge that we face and we’re not talking about profitability in the industry, we’re just talking about sustainability. Profitability will come on a longer-term basis,” he said.
“Official rates have gone from about 424.50 to about 1,550 odd at the end of the year. So that has driven our cost structures up drastically. So in paying for diesel, diesel has gone from pre-COVID times from 2,300 Naira to 1,000 plus Naira.
“Petrol has gone up several folds. The cost of power generation, the cost of procuring raw materials, what we call raw materials is a lot of things, batteries, fibre cables, base stations, towers, etc. To actually roll out and maintain these networks, we pay software licensing fees for these networks.
“The costs that we’re expending are actually exceeding our revenue, even though we are seeing revenue growth. And there’s no way that the industry can continue to sustain itself and provide the required quality of service under this structure,” he explained.
He tasked the goverment to understand the critical role of telecommunications in Nigeria’s development, noting that the industry creates value as well as jobs for millions.
“We’re not talking about profitability. We are talking about an existential threat to the entire industry. We’re the biggest players, including Airtel and us. If we are struggling with these kinds of cost structures, there’s no way the rest of the industry will not experience the same.
“And the truth is, this just doesn’t affect the large operators. Every part of the ecosystem that works backwards from there is affected by exactly the same thing because they’ve all seen their cost up.”