Tariff hike: FG assures telcos of price increment but not the proposed 100%

The Nigerian government has said that its regulatory body, the Nigerian Communications Commission (NCC), will soon develop strategies for raising tariffs in the telecom sector. 

According to the Minister of Communications, Innovation, and Digital Economy, Dr Bosun Tijani, during a stakeholder meeting with Mobile Network Operators (MNOs) on Wednesday, there would be an increment but not the 100 per cent proposed by telecom operators.

Tijani hinted at a sustainability report from KPMG on the sector coming in early January 2025 and that it would improve the sector.  The sustainability report is expected to make recommendations on the ongoing issue of tariff review where telecom operators have claimed that the industry’s sustainability faces a severe threat with the current tariff regime.

“This report is part of our commitment to ensure that we achieve our goal of providing internet access as a human right for all,” he said.

The minister added that consultations and engagements were ongoing on the issue and that very soon, the NCC will approve and make the new tariffs public to Nigerians.

“You have seen over the past weeks that some of these companies have been agitating to increase tariffs. They are requesting a 100% tariff increase. But it will not be 100%. The NCC will soon come up with a clear directive on how we will go about it,” the Minister said.

Expressing the need to strike an equilibrium between subscribers and operators, the Minister emphasized the need to ensure that the telecommunication sector gets its acts together to put the right regulations in place to ensure the growth of this sector.

Tijani also pointed out that the Federal Government would no longer leave infrastructural investments of the sector to private companies alone while adding that quality service is needed from telecom operators amidst the push for tariff hikes. 

“As a country, over time, we have left these investments in the hands of the private sector. They typically invest where they can see returns in the short to medium term. We will not want this conversation to just be about tariff increases. What the world is talking about today is meaningful connectivity, people want to have access to quality service,” he said. 

Tariff hike and telecoms industry sustainability

On the telecoms sector sustainability, the Executive Vice-Chairman (EVC), of the NCC, Dr Aminu Maida, said the meeting with stakeholders was about the sustainability of the industry. He also pointed out that the regulator body has considered all factors of the proposal but will not approve a 100 per cent tariff adjustment.

Maida noted that there are still other stakeholder engagements to be held on the matter and a final decision would be communicated in one or two weeks’ time. He then pleaded with the MNOs to adopt simplified templates to show Nigerians charges per minute for voice calls, SMS, and a megabyte of data.

“We are moving away from the regime where you will have a main rate, then you will now have a bonus which is at a different rate. It makes it often complicated and difficult for Nigerians to actually understand what they are being charged for. There is this agitation that the MNOs are stealing our data,” he said.

Airtel media spokesperson, Femi Adeniran, who represented Airtel Nigeria’s CEO at the stakeholders meeting narrated that the economic realities of rising operational and capital costs warranted the need for a tariff hike. 

“The economic realities of rising operational and capital costs necessitated the proposed tariff adjustments. This is aimed at ensuring the long-term sustainability of the sector while unlocking significant benefits for Nigerian consumers,” he said.

He noted that for the telecom companies to deliver top connectivity and foster digital inclusion, there is a need for tariff adjustments. 

Recall that the Nigerian telecommunications operators recently proposed a 100 per cent tariff hike on voice, data, and digital offerings to the Nigerian Communications Commission. 

While noting the proposal, Karl Toriola, MTN’s Chief Executive Officer pointed out that he doubted the 100 per cent tariff hike plan and stressed the need for the sector’s sustainability.

“This is not about profitability but the sustainability of the sector. I think the Federal Government was very supportive in 2024 with significant structural changes to support the industry, one of them was the Critical National Infrastructure (CNI) bill, which protects telecoms infrastructure as critical and gets all the security agencies behind it. The other is addressing the indebtedness of the entire sector, and we have been put to task on QoS obligations, and we shall put to task on that even more in 2025,” he said.

He again added that the sector has experienced tough economic times owing to inflation and naira devaluation, just like every other sector.

“Sustainability is at the heart of what is driving the economy. If you don’t have a sustainable industry, the economy and well-being of the people will be affected. Yes, everyone in Nigeria has gone through difficult times in the last two years due to economic challenges: inflation, and naira depreciation among others. For us, we are not talking about profitability, but sustainability. Profitability will come on a long-term basis,” Toriola expressed.

Similar Post: Airtel CEO says 100% tariff hike is required for telecom sustainability in Nigeria.