50% telecom tariff: Senate calls for review as Nigerians struggle with rising data costs

The Nigerian Senate has directed the Federal Ministry of Communications, Innovation and Digital Economy (FMCIDE) and telecom operators to review the cost of data and other related services. The notice comes amid the hike in telecom tariffs, which has affected subscribers.  

According to a Wednesday motion sponsored by Senator Asuquo Ekpenyong (Cross River South) titled ‘Urgent Need to Address the Increased Cost of Data Services in Nigeria’, it lamented the over 200 per cent hike in costs which has placed significant financial strain on millions of Nigerians, especially young people who rely on the internet for their livelihood. The motion was largely supported by lawmakers. 

Emphasizing fair pricing, Ekpenyong explained that the hike in telecom tariffs might cut short Nigerians’ daily activities. 

He added that youths embrace the digital economy by leveraging the internet for various income-generating activities, including e-commerce and online trading, software development, web design, mobile app creation, content creation on YouTube, TikTok, and Instagram, online education and professional skill development, and cryptocurrency trading.

In addition, the House Upper Chamber also asked the ministry to develop a policy framework structured at enabling affordable internet services in Nigeria. The chamber also directed the federal government to focus on establishing and supporting tech hubs across the country that would create free or subsidized internet access for young entrepreneurs, students, and innovators.

“Concerned that fibre-optic internet services remain unaffordable for the average young Nigerian, leaving them heavily dependent on mobile telecommunications companies for internet access, and the sudden substantial increase in data costs threatens their economic survival and limits access to critical digital services,” the house noted.

See Also: MTN data tariff hike: Customers lament sudden increase of 5GB/1.5k weekly data plan to 6GB/2.5k.

Recognizing the impact of inflation across boards, the chamber expressed that businesses in Nigeria have been affected by challenges that have slowed down their financial performances. 

The Senate believes that urgent intervention is required to ensure affordable internet access remains available to Nigerians, particularly the youth, who are the backbone of Nigeria’s digital economy.

Telecom tariff hike

Following the 50% tariff increase approved by the Nigerian Communications Commission (NCC) in January, telecom giants like MTN, Glo, Airtel, and 9mobile hiked the costs of data and airtime plans. 

Recall that for months, telecom operators pushed for a pricing adjustment with claims of rising operating costs and sustainability needs, considering the telecommunications sector as a holding pillar of Nigeria’s economy. They noted that the sector has experienced tough economic times owing to inflation and naira devaluation, just like every other sector. 

While defending the tariff hike last month, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Chairman, Gbenga Adebayo argued that it is vital for the long-term sustainability of the sector. He noted that sustained underinvestment in the telecom sector could lead to an irreparable decline in services.

“I understand that a price review is necessary for the survival of the telecom sector. None of us can afford to see this sector collapse. The inability to recover investments in the telecom industry has made sustainability increasingly difficult. When there is prolonged underinvestment, it becomes virtually impossible to recover.”

He noted that lawmakers would come to understand the necessity of the adjustment after fully assessing the situation. “The public’s concerns are valid, but this tariff increase is essential for sustaining the sector,” he said.

While the hike was justified by telecom stakeholders, there have been questions hanging around the quality of internet services as subscribers have consistently expressed the desire for measurable improvements in the quality of service before any tariff increases are implemented. 

Amid this, the Federal Competition and Consumer Protection Commission, FCCPC, warned Nigeria telecom operators to ensure improved service delivery to their customers and charged them to ensure that issues that have plagued their service delivery are resolved.

“Issues such as network congestion, dropped calls, inconsistent internet speeds, unusual data depletion, and poor customer service have remained prevalent concerns. It is, therefore, crucial that tariff adjustments directly translate into demonstrable and tangible service enhancements for consumers,” the commission said.

The consumer protector also tasked MTN, Airtel, Glo, and other network operators to allocate increased revenues responsibly, with an emphasis on infrastructure development and service delivery improvements. Clear mechanisms must also be established to monitor how these funds are utilized, ensuring that consumers directly benefit from the adjustments.