Analysts advocate full deregulation of telecom sector
Nigeria’s telecom price controls are coming under increased scrutiny, as industry analysts argue that full deregulation is necessary to sustain network quality and investment.
With inflation exceeding 300 per cent, telecom tariffs in over a decade had remained largely unchanged, forcing operators to absorb rising expenses while struggling to maintain infrastructure and service quality.
Analysts warn that regulatory interference in pricing has stifled competition, discouraged foreign investment, and placed unsustainable pressure on service providers.
Executive at Adaba Consult, Ejike Onyeaso, told The PUNCH that a market-driven pricing framework—where tariffs are determined by supply and demand rather than regulatory intervention—would provide the stability needed for long-term industry growth.
The debate over price regulation came to a head in January 2025 when the Nigerian Communications Commission approved a 50 per cent tariff hike to ease the financial strain on operators.
The decision sparked immediate resistance from the Nigeria Labour Congress, which called for protests and a telecom boycott, arguing that higher tariffs would burden consumers.
The standoff triggered weeks of heated exchanges between industry stakeholders, labour unions, and the government, dragging the dispute on for over two months.
In a bid to broker peace, the Federal Government, through a 10-man panel, intervened, reducing the approved increase to 35 per cent. Yet, telecom operators remain adamant, awaiting formal regulatory clearance to implement the revised rates.
“If the market is regulated, price-fixing becomes inevitable. What we need is a system where competition naturally drives prices, while regulations focus on preventing anti-competitive behaviour,” Onyeaso said.
While acknowledging the NCC’s efforts to engage stakeholders and set a pricing floor for stability, he stressed that the industry needs greater flexibility to adjust tariffs based on economic realities.
The telecom sector’s struggle mirrors broader economic challenges. Operators face rising diesel costs, foreign exchange volatility, and multiple layers of taxation at both federal and state levels.
Meanwhile, financial projections paint a grim picture, estimating that Nigerian telecom firms could lose as much as $11.3bn in revenue between 2022 and 2026 if pricing restrictions persist.
Publisher of The Cable, Simon Kolawole, questioned why telecom pricing remains tightly controlled while other industries, including petroleum, have been deregulated.
“In a truly deregulated market, it is not the job of the regulator to determine tariffs, either floor or ceiling. The NCC should focus on enforcing technical standards and ensuring quality service, while the Federal Competition and Consumer Protection Commission prevents unfair pricing practices such as collusion,” Kolawole wrote in a column last week.
He suggested that instead of direct price controls, telecom tariffs should be indexed against economic indicators such as inflation, ensuring incremental adjustments rather than abrupt hikes that provoke public backlash.
Earlier, the President of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, criticised the framing of the tariff dispute as a labour issue rather than an industry-wide economic challenge.
“This isn’t a labour issue; it’s an industry-wide challenge. Interest rates fluctuate constantly, yet banks don’t shut down in protest. These economic policies affect all sectors, not just telecoms. So why single out our industry?” Emoekpere told The PUNCH in January.
He added that while concerns over service quality are valid, expecting telecom firms to operate at a loss is unsustainable. “If operators cannot adjust prices in response to rising costs, network expansion and service delivery will inevitably suffer,” he said.
