Nigerian telecommunications companies have submitted a proposal for a 100% increase in their tariffs, which is currently pending approval from the Nigerian Communications Commission (NCC).
The proposed hike aims to address the mounting operational costs, including inflation, exchange rate fluctuations, and the increasing price of key inputs such as diesel and raw materials.
MTN Nigeria’s Chief Executive Officer, Karl Toriola, disclosed the proposal during a televised interview on Thursday, explaining that the telecom sector has been under significant financial strain due to escalating costs. However, he expressed uncertainty about whether the NCC, the country’s telecom regulator, would approve the full extent of the tariff increase.
Toriola emphasized that while the proposal is substantial, it is necessary for the sustainability of the industry, which has been struggling to remain profitable. He also acknowledged that regulators may be hesitant to approve such a large increase, given the current economic challenges facing Nigeria.
“We’ve put forward requests of approximately 100% tariff increases to regulators. I doubt they’re going to approve that quantum of increases because they are very, very sensitive to the current economic situation in the country,” Toriola said. Despite this uncertainty, he remained optimistic that the regulators would make a well-informed decision considering the long-term needs of the sector.
The proposal comes at a time when telecom companies are under severe pressure from rising operational costs, including the increasing price of diesel and power generation, which are crucial for maintaining network operations. The CEO stressed that the primary concern is ensuring the telecom industry’s long-term sustainability, rather than focusing solely on short-term profits.
Toriola also highlighted that industry stakeholders, including the regulators and the Association of Licensed Telecommunications Operators of Nigeria (ALTON), are aligned in their concerns for the future of the sector. “I believe we’re all on the same side, the policymakers, the regulators, our Chairman of ALTON, Gbenga Adebayo, and the industry. We’re united because we share concerns about a few fundamental issues. First, human rights are critical to driving any economy. Without a sustainable industry, the broader economy and the well-being of the people will be negatively impacted.”
ALTON Chairman Gbenga Adebayo described the sector as being “under siege” due to soaring costs. He emphasized that despite the financial pressures, tariffs have remained largely unchanged, making it difficult for telecom companies to maintain service quality and expand their networks. Adebayo warned that without an immediate tariff adjustment, service disruptions and network limitations may become widespread.
Earlier this week, operators issued a statement warning of potential service disruptions unless tariffs were adjusted to reflect the rising costs. In April 2024, the first call for tariff adjustments was made, but no significant progress has been achieved so far.
To address these concerns, ALTON and the Association of Telecommunications Companies of Nigeria (ATCON) issued a joint statement urging the Federal Government to facilitate constructive dialogue with industry stakeholders. They called for a framework that would balance consumer affordability with the financial sustainability of operators, following 11 years of tariff stability.
Operators have emphasized the need for timely intervention to preserve the future of Nigeria’s telecom industry, which they consider critical to the country’s economy. Without a prompt resolution, the survival of the sector may be at risk.
