Joy Agwunobi
Following the recent 50 per cent hike in telecom tariffs across Nigeria, operators face mounting pressure to justify the adjustment by improving service quality and expanding network coverage.
As consumers prepare to start paying more for connectivity, they are expecting significant improvements in call quality, data speed, and overall service reliability. The Nigerian Communications Commission (NCC) has also emphasised the need for operators to align their pricing structures with enhanced service standards, ensuring that subscribers receive value for their money.
In response to these expectations, Dinesh Balsingh, managing director and chief executive officer of Airtel Nigeria, has reaffirmed the company’s commitment to ensuring that network expansion, service quality, and innovation remain at the core of its investment strategy.
In a recent televised interview, Balsingh highlighted three primary focus areas including coverage expansion, service quality improvements, and innovation—which he described as the pillars of Airtel Nigeria’s capital expenditure (CAPEX) plans.
One of Airtel Nigeria’s key priorities is increasing network coverage, particularly in rural and remote areas. According to Balsingh, the company has identified several locations where improved connectivity is urgently needed and is working towards extending its infrastructure to bridge the digital divide.
“Our CAPEX is being directed into key areas, and we have lined up a sizable capital outlay, with Nigeria receiving a significant portion of our investment,” he explained.
He noted that the company is deploying additional telecom towers, particularly in deep rural areas where access to mobile networks remains limited. This initiative, he said, would not only improve voice and data services but also support businesses, education, and digital inclusion in these communities.
“Another critical area is expanding our capacity, as data consumption is growing at an exponential rate. To keep up with this demand, we are continuously expanding our radio infrastructure, utilising larger frequencies, and optimising capacity from our existing sites,” Balsingh stated.
Beyond coverage expansion, Airtel is also prioritising service quality enhancements to meet both regulatory expectations and customer demands.
The NCC, the telecom regulatory body, has made it clear that service quality must improve alongside the tariff adjustment, holding telecom operators accountable for their performance. Balsingh acknowledged this and reassured customers that Airtel is actively addressing factors that impact service delivery.
To strengthen network reliability, the company is expanding its radio infrastructure, increasing fiber deployment, and enhancing submarine cable capacity to support faster data speeds and reduce network congestion.
“Fiber deployment remains a challenge, especially in metropolitan areas where ongoing construction activities and intercity developments disrupt network operations. However, we are working to reinforce network resilience by creating multiple fiber rings and increasing redundancy across the system,” he explained.
He also highlighted vandalism, frequent fiber cuts, and fuel supply constraints as major challenges affecting service quality but emphasised Airtel’s determination to overcome these issues through increased investment in network security, alternative energy solutions, and rapid response teams to minimise service disruptions.
“Our immediate focus now is to enhance investments, continue building the network, improve service quality, and extend coverage to rural communities,” Balsingh stated.
Balsingh further emphasised that innovation is a key driver of Airtel Nigeria’s growth strategy. Beyond expanding coverage and improving service quality, the company is investing in fintech solutions, data centers, and digital infrastructure to enhance user experience and drive technological advancements in the telecom sector.
“We are committed to running top-tier data centers, optimising our caching systems, and implementing distributed storage solutions to improve efficiency and performance,” he stated.
Additionally, he outlined how Airtel is advancing fintech and mobile financial services, ensuring that digital payment solutions remain accessible and secure for consumers, noting that the company is also focusing on app development and AI-driven tools to enhance service delivery.
“Beyond network investments, we are also focusing on fintech innovation, app development, and other technological advancements. A wide range of CAPEX investments has been lined up in these areas, and I am confident that consumers will soon begin to experience the positive impact of these initiatives,” Balsingh added.
Speaking on the tariff increase, he acknowledged its significance for the industry while stressing the importance of striking a balance between affordability and long-term investments.
“We are happy with the 50 per cent increase that has been approved. Our priority now is to optimise it, maintain affordability for consumers, and ensure that service quality and network expansion remain at the forefront. We have been engaging with stakeholders, and I am pleased that this revision has been implemented. While I cannot say whether it is enough, what matters is how we utilise this adjustment to sustain investments,” he explained.
According to Balsingh, customer satisfaction remains the company’s top priority
“Airtel prides itself on customer service. We keep the customer at the heart of everything we do, and the entire organisation, across Africa and the globe, embraces customer service as its core value. Service quality is part of the DNA of this organisation,” he said.
The CEO also acknowledged the NCC’s role in setting service standards and ensuring telecom operators meet expectations.
“The NCC’s service standards are very crucial for us, and the EVC has been extremely vocal about them. It’s good that he is holding us accountable for this promise of service quality,” he noted.
Balsingh expressed strong confidence in the company’s investment plans, stating that various initiatives were already in place to enhance service quality. He noted that efforts such as the rollout of new networks in deep rural areas, the expansion of radio infrastructure for improved data capacity, fiber deployment, submarine cable enhancements, and investments in data centers would contribute significantly to raising service standards.
However, he acknowledged the existing challenges in the market, pointing out that frequent fiber cuts, vandalism, and fuel management constraints continued to pose obstacles.
Despite these difficulties, Balsingh highlighted Airtel’s dedication to upholding the required service standards, stressing that the company remained committed to ensuring excellent service quality while making the most of the recent rate adjustment to benefit both consumers and the industry.
He further discussed the financial pressures facing the telecom industry, particularly the rising cost of operations. Balsingh highlighted energy expenses as a key challenge, noting that the cost of power and fuel has soared in recent years.
“There are two major components of cost which come out of the revenues that we generate. The first cost is the operating expenditure on running a network, and the second is the capital expenditure required to keep upgrading the network,” he said.
He noted that energy remains the single largest cost in running telecom networks, with both power and fuel prices witnessing increases over the years.
“The price of power has gone up by over 200 per cent to about ₦225 per kilowatt-hour. Diesel has also surged to about ₦1,153 per litre. Back in March 2021, diesel was somewhere in the ₦200 range, meaning we’ve seen an increase of about 390 per cent,” he stated.
Balsingh further pointed out that the rising costs have placed significant financial strain on telecom operators, pushing margins into negative territory.
“The increase in these costs has caused margins to go negative, and shareholder equity is also negative at this point. When we approach banks for loans, the interest rates have risen to 30 per cent, adding to the financial burden,” he explained.
On capital expenditure, he cited foreign exchange volatility as another major challenge for the industry.
“The cost of importing telecom equipment has surged due to the depreciation of the naira. The exchange rate has jumped from ₦500 to ₦1,500 per dollar, representing a 300 per cent increase,” he said.
In response to concerns over telecom operators needing approval from the Nigerian Communications Commission (NCC) before adjusting tariffs, Balsingh explained that while market forces influence pricing, regulatory oversight remains essential in the telecom industry.
“The free market principles clearly imply that any exchange has to happen only if there is value for both parties. Now, you see that with demand, supply, and competition. Any industry with these dynamics will find the right price, and that’s what defines a progressive industry framework,” Balsingh explained.
He, however, acknowledged the importance of regulatory oversight in telecoms, given its role as an essential service.
“The NCC has oversight over us, which is good. Even within this oversight, if I’m not wrong, there is a price floor below which the industry is not sustainable, and investments will not come. There is also a price ceiling above which consumers will be affected by a high price increase,” he noted.
The CEO stated “Somewhere, the market has to find its place in between, and this will be governed by the dynamic nature of the industry, competition, and economic realities at any given time. I think this is how the framework is structured for pricing.”
While Airtel acknowledges regulatory oversight, Balsingh maintains that a more open-market pricing system could better sustain industry growth and investment
“We are fine with the way it is presently, but we would always feel that an open, free-market pricing system is probably the right framework,” he added.
