Consumers kick as telecoms insist on tariff hike

It’s no retreat no surrender in the telecom industry as controversy over proposed tariffs upward lingers. Mobile Network Operators (MNO) are saying it is either increase or nothing and consumer right groups don’t want to have none of that. Though the government has thrown its support behind the MNO’s proposal, top officials have not agreed […]

It’s no retreat no surrender in the telecom industry as controversy over proposed tariffs upward lingers. Mobile Network Operators (MNO) are saying it is either increase or nothing and consumer right groups don’t want to have none of that.

Though the government has thrown its support behind the MNO’s proposal, top officials have not agreed on what percentage increase should be given to the operators.

The Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani confirmed that telecom tariffs would soon increase but not by 100 percent.

Rising from a stakeholders meeting with Mobile Network Operators (MNOs) last week  in Abuja, Tijani said consultations and engagements were still ongoing on the issue.

The MNOs are proposing a 100 per cent increase in tariffs.

According  to the  minister, very soon the Nigerian Communications Commission (NCC) would approve and make the new tariffs public.

“You have seen over the past weeks that there has been agitation from some of these companies to increase tariffs. They are requesting for 100 per cent tariff increase.

“But it will not be by 100 per cent; the NCC will soon come up with a clear directive on how we will go about it.

“We want to strike the balance as a government, to protect our people, but also protect and ensure that these companies can continue to invest significantly,” the minister said.

He said that there was a need to ensure that the  telecommunication  sector get its acts together to ensure that the right regulations are put in place to ensure the growth of this sector.

The Minister also said that the Federal Government would no longer leave investments on infrastructure in the sector to private companies alone.

“As a country, over time, we have left this 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 increase. What the world is talking about today is meaningful connectivity, people want to have access to quality service.

“A part of it that the consumers may not be aware of is the investment that needs to go into the infrastructure that is used to deliver these services,” he said.

But the Executive Vice-Chairman (EVC), of the NCC, Dr Aminu Maida, said that the meeting with stakeholders was about the sustainability of the industry.

“We have looked at all of these factors, and that is why, like the minister said, it is not likely that we are going to approve 100 per cent tariff increase.

“I know that Nigerians are agitated to hear the exact percentage approved. There is still some stakeholder engagements that we are going through, but you will hear from us within a week or two,” he said.

He said the NCC had put a number of tools and instruments in place to ensure  compliance to service quality.

He urged  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.

The CEO of Airtel Nigeria, Dinesh Balsingh, represented by Femi Adeniran, Airtel media spokesperson, said that the economic realities of rising operational and capital costs necessitated the proposed tariff adjustments.

Balsingh said that for the telecommunications companies to deliver superior connectivity and foster digital inclusion, there is need for tariff increments.

“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.

Consumers reject telecom tariff hike

However, the National Association of Telecoms Subscribers (NATCOMS) said the planned tariff hike of telecommunication services in Nigeria would not be allowed to come to reality.

NATCOMS in a communique issued after an emergency meeting in Lagos after the New Year holiday considered “the decision of the NCC as very insensitive and not in the interest of Telecoms Services Consumers”.

In the communique jointly signed by NATCOMS’ president, Chief Deolu Ogunbanjo and the National Secretary, Barrister Bayo Omotubora respectively; said the new increment would be one additional burden too many for Nigerian telecom users.

“The unrelenting rise in prices of Goods and Services in the country has made life extremely difficult for the generality of Citizens who are the Consumers of Telecom Services. The new increment is therefore one additional burden too many.

“Under the new tariffs regime, a voice call will rise from N11.00 to N15.40 per minute, short message services will jump from N4.00 to N5.60 and One GB data bundle will move from N1,000 to N1,400. This represents additional digital costs  consumers will have to square up with at the beginning of a new year among other harsh economic realities of Nigeria  of today. This, undoubtedly, is against  Public Interest contrary to the false narrative of NCC that described the recent adjustments as pro public interest”, NATCOMS said.

It said the increment is an attempt to price telecoms services out of the reach of generality of the citizens of the country.

It added: “Telecoms Services are taxable services under the Value Added Tax Act. The Act was amended in 2019 by the Finance Act of that year to raise the tax rate from 5% to 7.5% which was 50% increment and the increment has been borne by the consumers of  rateable Telecom Services. That increment brought about untold hardship to our members many of who have been forced to cut back on their telecommunication requirements.

The subscribers association said it is aware of the arguments of the Telecom Operators that there has not been any  tariff increment in a decade, multiple levies slammed on them by different levels / Tiers of Government and the dollarization of the costs of their equipments. “But if the truth be told, there are so many other avenues through which the operators can generate funds to meet their rising operational costs without putting un bearable burden on their consumers”, it added.

Cost of data, calls in Nigeria lowest in West Africa – ITU

But Nigeria stands out globally for its affordable mobile data costs, offering cost-effective connectivity services to data users nationwide, an international organisation has said.

With an average data cost of $0.38 for a gigabyte, mobile data in Nigeria is one of the cheapest in the world and one of the lowest in Africa.

This position was affirmed by the International Telecommunications Union (ITU) and revealed in the GSMA report on “The role of mobile technology in driving the digital economy in Nigeria”.

“According to the ITU, the cost in Nigeria (as a % of GNI per capita) for a basic data-only package is the lowest in West Africa and well below the average across Africa,” the GSMA report stated.

In comparison to Nigeria, other African countries, such as Kenya, Ethiopia and South Africa have higher data costs, with Kenya averaging $0.59 per gigabyte, Ethiopia with an average of $0.68 per gigabyte and South Africa at $1.77 per gigabyte. Notably, the United States of America offers data rates at an average of $6 for a gigabyte.

Amid its cost-friendly and competitive data rates, Nigerian telecommunications operators are currently advocating for a tariff increase, to address the pressing challenges the sector is faced with, due to currency devaluation, inflation and the overall Nigerian economic downturn in the past months.

MTN Nigeria’s Chief Executive Officer, Dr Karl Toriola, during a recent interview with Channels TV, highlighted the diverse challenges the Nigerian telecommunications industry had to scale through in the past year due to the state of the Nigerian economy, emphasizing the need for tariff adjustments to ensure sustainability of the sector.

“2024 was a very torrid year for the entire telecoms industry. We are the largest operators, so we were probably able to be a bit more resilient but it’s been very difficult,” he said.

Toriola cited the major factors which contributed to the challenges of telecoms operations in 2024, noting that the cost of operations of the telecoms firm now exceeds its revenue.

“The difficulty was triggered by the currency devaluation and inflation which happened on a very rapid scale. What this has done is that it has driven the cost of operations up so significantly, that by the end of the year, we are spending more to keep operations up and running than we are generating in revenue and that is not sustainable,” Toriola said.

He noted that the tariff increase will enable telecom operators to build the capacity needed to provide quality services.

He said: “What the tariff adjustment allows us to do is to continue to reinvest, because we need to build capacity, build resilience, put in additional generators and alternative power supply systems for stable and high-quality networks”.

More importantly, he emphasized that the operations of telecom operators are threatened due to present challenges and the tariff adjustments are needed for the sector to survive.

“If you have any organization that’s spending 160% of what it earns in revenue, at some point that organization is going to shut down. We are running on fumes to keep our networks up, and we are keeping our networks up. We are not shutting down any networks at this point, because we believe that sooner or later, the sustainability issue will be addressed,” he stated.

The Federal Government has acknowledged the need for tariff adjustments, while also assuring Nigerians that any increase will be moderate, and not up to 100% as the telcos had requested.

It would be recalled that the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, recently said: “We want to strike the balance as a government, to protect our people, but also protect and ensure that these companies can continue to invest significantly”.

Airtel Nigeria added its voice to the conversation around telecom tariff increase in the country, saying it is now essential for telecom operators to adjust their pricing structure upward.

Airtel Nigeria CEO Dinesh Balsingh said for the operators to continue to render perfect services, they must be allowed to increase their tariffs.

He however reaffirmed the telecom giant’s commitment to delivering superior connectivity and fostering digital inclusion.

In response to the economic realities of rising operational and capital costs, Balsingh noted that the proposed tariff adjustments aim to ensure the long-term sustainability of the sector while unlocking significant benefits for Nigerian consumers.

In an op-ed authored by Balsingh in which he contextualized the necessity of the tariff adjustments, he explained that “For over a decade, tariffs have remained static despite the dramatic increase in operating expenses, which have surged by over 300% in the last 18 to 24 months alone. To continue providing high-quality services and meeting the growing demand for digital connectivity, it has become essential to realign our pricing structure with economic realities.”

The proposed tariff adjustments will not only ensure the sector’s sustainability but also bring significant improvements to service delivery, adding: “By enabling us to expand coverage, strengthen network security, and introduce cutting-edge technologies, the adjustments will directly enhance the quality of connectivity for Nigerians. Our priority is to ensure that no one is left behind in the country’s digital transformation journey.”

Balsingh emphasized that these adjustments will be implemented with affordability in mind, ensuring minimal impact on consumers. The company remains steadfast in its commitment to supporting Nigeria’s vision of becoming a digital economy leader in Africa, empowering businesses, driving innovation, and fostering inclusive growth.