Telcos seek tariff hike to offset soaring costs

Telecom operators in Nigeria have insisted on calls for an upward tariff review in a move to offset the soaring costs of operation and investment in the sector.

This demand comes after 11 years of stability in tariffs, during which the industry has faced significant increases in operational costs and investments in network expansion and upgrades.

This disclosure was made in a joint statement obtained on Thursday from the Association of Licensed Telecom Companies of Nigeria and the Association of Telecom Companies of Nigeria.

The associations called on the Federal Government to facilitate a constructive dialogue with industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with operators’ financial viability.

“Despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.

“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” part of the statement read.

ALTON and ATCON expressed worries over willful vandalism and theft and other challenges mitigating the growth of the sector.

They requested the protection of assets and network infrastructure and urged the federal government to pass legislation that designates telecommunications infrastructure as critical national infrastructure.

Telecommunications infrastructure undoubtedly plays a pivotal role in Nigeria’s national security and socioeconomic growth, especially as the country currently contends with multiple security challenges that require urgent and immediate actions in response to these threats.

“Attacks on cell towers, fibre optic cables, and other critical assets disrupt telecommunications services and result in significant financial losses for operators,” telcos lamented.

On infrastructure deficits, ALTON and ATCON said their members still lack access to essential telecommunication services due to a myriad of challenges, including multiple taxation and regulations, prohibitive right-of-way charges, inadequate electric power supply, and vandalism of telecommunications infrastructure.

On regulatory independence, ALTON and ATCON demand the sustenance of a culture of independence in the regulatory landscape to safeguard against undue influence and unwholesome incursion into the Nigerian Communications Commission’s domain, which will inspire trust in the telecommunications sector and encourage investment.

Further, the group said regulatory neutrality and independence were crucial to ensuring a thriving telecommunications sector.
The groups reaffirmed their commitment to working collaboratively with the government to address the challenges facing the telecommunications industry in Nigeria.

“By fostering a conducive regulatory environment, prioritising infrastructure development, enhancing security measures, and facilitating pricing adjustments, the government can unlock the full potential of Nigeria’s telecommunications sector, driving economic growth and societal development,” the associations concluded.

Meanwhile, investments in Nigeria’s telecommunications sector decreased to $134m in 2023 from $456.8m in the corresponding year, a decline of $322m, according to the National Bureau of Statistics.
The decline represents a decrease of approximately 70.5 per cent.

According to experts, depleting investments in the sector would pose challenges for telecom companies to maintain or enhance the quality of their services.