Telecoms industry pins hopes on affordable services, innovation to soothe Nigeria’s economic turbulence

Joy Agwunobi

With Nigeria experiencing a growing economic strain, telecom operators are finding themselves in a race against time to develop and introduce new, forward-thinking solutions that not only boost connectivity but also accommodate the financial limitations of many Nigerians.

This pressure on telecom providers has been triggered by the need to offer services that are both affordable and accessible for consumers while simultaneously navigating a challenging economic environment.

For millions of Nigerians, mobile phones have transcended their role as simple communication tools; they have become indispensable lifelines for education, work, and access to critical services.

However, as inflation drives up the cost of living and data usage drains wallets at an accelerated rate, maintaining connectivity has become a significant challenge, straining both the finances and well-being of consumers.

Given these mounting financial pressures, industry experts have highlighted the critical importance for telecommunications operators to prioritise affordability, facilitating greater access to data for consumers.

The trending issue was amongst the discussions highlighted by Ugochi Agoreyo, Google Search Products partnerships manager for sub-Saharan Africa (SSA), at the Nigeria Digital Opportunity report presentation held at the Google Office in Lagos.

While Agoreyo noted the strides made in the affordability of mobile devices, she also acknowledged the persistent high cost of data as a challenge for Nigerians.

“Think about the mobile phones in the market today. We have come a long way in making devices more affordable with the introduction of various technologies. However, data remains a challenge,”she said.

Agoreyo, in her remarks, stated that the high cost of data has led to a more cautious approach among consumers.

She explained that consumers tend to limit their data usage to the most essential tasks, such as accessing critical information or watching specific videos, due to the exorbitant costs associated with data usage.

The Google Search Products partnerships manager Agoreyo also emphasised the economic basis of the high data cost challenge, stating that the issue must be addressed on a large scale to bring about meaningful change.

In her remarks, she asserted that solutions must be found to effectively reduce data costs, allowing more Nigerians to access and benefit from digital services.

Ayotunde Coker, CEO of Open Access Data Centre (OADC), further echoed the call for innovation and affordability during a webinar titled “Beyond Connectivity: Telcos and the Future of Financial Inclusion in Nigeria”.

In his remarks, Coker underscored the significance of affordability and strategic infrastructure investments, highlighting how the effects of inflation and broader economic pressures have constrained the ability of telecom operators to adjust regulated pricing.

He  likened the current inflation crisis to gaining weight stating  “You eat too much and gain weight, and once you’ve gained it, it’s difficult to lose it. Similarly, inflation has built up over time, and now we are feeling the consequences.”

He further noted that the Western world has been struggling  with inflation and a cost-of-living crisis for the past three years, and Nigeria must face these challenges head-on, as well.

Coker identified the need for decisive action to address Nigeria’s soaring inflation and cost-of-living crisis, which, according to him, has been intensified by factors like the removal of subsidies and rising input costs for telecom operators.

In his comments, Coker highlighted the delicate situation faced by operators who, he argued, are constrained from modifying regulated pricing in light of economic pressures. This, he asserted, creates a precarious situation where operators are forced to struggle with systemic impacts while navigating critical economic issues, underscoring the pressing need for solutions that address both the immediate and long-term challenges in the telecommunications industry.

He proposed a creative approach to addressing these challenges, particularly through the introduction of value-added services that cater to different segments of society.

Coker highlighted the possibility of creating products and services tailored to higher-income consumers, which would help to finance services for those from lower-income segments, allowing for a graduation of products across socioeconomic levels.

“There are innovative approaches to consider, such as offering services during specific times of the day for individuals who need them for essential purposes, like education or healthcare,” he said.

Coker additionally underscored the need for new approaches to pricing and service delivery in light of the ongoing cost-of-living crisis, which has been steadily intensifying.

According to Coker, affordability remains the primary concern for consumers and operators alike, necessitating innovative thinking to develop targeted solutions that directly address this issue.

The OADC chief further stressed the essential role of infrastructure investment in promoting economic growth and digital transformation in Nigeria, cautioning that a lack of capital investment in telecom infrastructure would only exacerbate the reliability issues currently plaguing the country’s broadband network.

According to him, the detrimental consequences of unreliable broadband cannot be overstated, potentially undermining any other advancements made in the telecommunications sector.

Coker also emphasised the importance of collaboration within the telecommunications industry to address cost-related challenges. He proposed that operators pool their resources and efforts, especially in areas such as data centers and telecom towers, to reduce infrastructure costs and promote more efficient investment.

Coker explained that this innovative, collaborative approach is essential to drive the development of affordable, high-quality products and services. He argued that operators do not need to build their own telecom towers or data centers, but rather should focus on maximizing cost savings by sharing these investments across the industry.

Coker further stressed that the telecommunications industry must adopt a comprehensive approach, focusing simultaneously on the front-end and back-end of the value chain.

On the front-end, he argued for the adoption of innovative pricing models that enable broader access to services while ensuring a steady flow of capital to fund long-term investments in the sector.

On the back-end, Coker emphasised the importance of optimizing infrastructure investments through collaborative efforts among operators, such as sharing the costs of building telecom towers and data centers.

“We must creatively focus on the products and services for the consumer, while optimising how we invest in infrastructure across the industry,” he stated.