Joy Agwunobi
The sustainability of Nigeria’s telecommunications sector has taken center stage, with indications that a long-debated tariff adjustment may finally gain traction.
Bosun Tijani, the minister of communications, innovation, and digital economy, recently hinted at the need for a marginal tariff increase, citing economic pressures and the imperative to keep the industry afloat.
“We have conducted a study on the sustainability of the telecoms sector, and the results, expected in two weeks, will guide the steps needed to support operators while improving services for Nigerians,” Tijani said during an interview.
He stressed that beyond tariff adjustments, Nigeria must prioritise investments in digital infrastructure to ensure competitiveness and long-term growth.
Tijani’s remarks indicate a broader vision for the sector’s sustainability. “We think there may be a need for the hike, but much more needs to be done to ensure the sector remains competitive,” the minister stated.
Although the Nigerian Communications Commission (NCC) has yet to approve any tariff hikes, the groundwork appears to be laid for a possible revision of rates come 2025. A NCC spokesperson confirmed that any decisions would balance industry demands with the interests of consumers. “This will benefit both subscribers and operators as we’ve considered feedback from all stakeholders,” the spokesperson noted.
The push for tariff increases comes on the back of mounting losses within the sector. MTN Nigeria, which manages a subscriber base of nearly 80 million, reported a ₦514.9 billion loss in the first nine months of 2024, following a ₦137 billion loss in 2023. Similarly, Airtel Africa disclosed $89 million in losses for FY 2024, largely driven by operational challenges in Nigeria.
Escalating costs, particularly for diesel required to power base transceiver stations, have also severely impacted operations. Karl Toriola, CEO of MTN Nigeria, highlighted the gravity of the situation, stating, “If the tariff doesn’t go up, we will shut down.”
The financial woes have also prompted the National Association of Telecommunications Subscribers (NATCOMS) to call for a 10 per cent tariff hike to mitigate the crisis. In October of this year, Adeolu Ogunbanjo, NATCOMS president, emphasised the need for improved service quality, warning that without adjustments, the sector’s performance would continue to deteriorate.
Ogunbanjo pointed out the urgent need for quality service delivery in a time when platforms like Instagram, X (formerly Twitter), Facebook, and WhatsApp are vital to everyday communication and business operations. He argued that despite operational costs soaring over the past decade, telecom companies have not increased their tariffs during that period.
Ogunbanjo emphasised that without a tariff adjustment, the sector’s quality of service will continue to decline, further affecting consumers and businesses alike. “When you look at the quality of service today, it’s poor, and telecom companies are also complaining. They have highlighted the rising costs of petrol, diesel, and other resources required to maintain network operations,” he explained.
“A marginal increase would suffice to support the sector without excessively burdening subscribers,” Ogunbanjo noted. He noted that any tariff adjustment would ultimately need to be approved by the NCC, which acts as the intermediary between Mobile Network Operators (MNOs) and subscribers.
He added that once the NCC approves the increase, telecom operators would be expected to invest in improving services for subscribers, ensuring better quality and reliability.
Despite the mounting pressure, the NCC has been cautious about approving blanket tariff increases. The regulator recently rejected a proposed price hike from Starlink in October 2024, citing concerns over consumer affordability.
The looming tariff revision occurs against a backdrop of rising food inflation, which reached 39.93 per cent in October, and fears of reduced internet penetration in a country striving for digital inclusion. Any decision to increase tariffs is expected to include strict measures to ensure telecom operators reinvest in infrastructure to enhance service quality and reliability.
As the NCC deliberates, stakeholders remain divided on the potential impact of a tariff hike. While operators see it as a lifesaver, consumer advocates fear the move could worsen the financial strain on Nigerians already struggling with inflation.
