Naira devaluation: Telecoms subscribers may pay more for call, data tariffs in 2015 – Experts

They said though call and data tariffs have not been increased for now, consumers may likely pay more in 2015.   The Chief Executive Officer of MainOne, Ms Funke Opeke, said “we are still in early days and it has not been telling on tariffs plans for now but it may soon tell on it if […]

They said though call and data tariffs have not been increased for now, consumers may likely pay more in 2015.   
The Chief Executive Officer of MainOne, Ms Funke Opeke, said “we are still in early days and it has not been telling on tariffs plans for now but it may soon tell on it if government fails to act.”
She said if government fails to address the situation, the telecoms sector is going to be badly hit because equipment supplies and service contracts in the industry are done in dollar.
She added:  “The value of the naira is definitely putting pressure on margins for telecommunications operators as you know, a lot of the technology inputs into the sector I imported and so they are dollar denominated and most of the operators have their long-term supplies and service contracts on dollar based so those costs and the values of naira receivables are against those who could not go as far.
“So, it’s going to put a lot of pressure and at the same time, we expect consumers to see inflationary trends – not as much as to spend some discretionary income on telecommunications it’s two sided equations. We are all hoping that there will be additional stimuli instituted by the government to advance the economy in stimulating growth and spending and diversify the economy from oil so that the economy can actually recover.”
Opeke stressed the need for the government to urgently diversify the economy and look for products and services that can compete on the global level to earn revenue and foreign exchange.
She said: “I think its early days to say the trend will lead to increase in tariffs given where the industry is. Everyone will like to avoid that because in an environment where consumers are also under pressure, operators can leave to avoid those. Perhaps for us in Nigeria it is also an opportunity for us to look at areas where we can grow our economy and add value, provide services out of Nigeria on a global basis to earn revenue and foreign exchange.
“There are other economies around the world that do that successfully need to be more active in order to put new frontiers in our economy.”
Also, the President of the Association of Telecommunication Companies of Nigeria (ATCON), Engr. Lanre Ajayi, told Daily Trust that effects of the current economic scenario on the telecoms sector depend on the interplay of factors determining cost of deploying equipment for service provisions.
He said there are several factors that interplay to determine what the subscribers pay for telecoms services among which is the cost of equipment which are sourced with foreign exchange.
According to him, when the exchange rate goes up, the cost of procurement of required equipment goes up which will surely affect service tariffs.
He explained that if other factors become favourable, like elimination of multiple taxation, ease of obtaining right of ways and so on, how much the consumers would pay for services may not necessarily go up.
Ajayi stated further that by implication, the continuous slide in naira value would drive the cost of equipment up and by extension the cost of providing telecoms service in Nigeria.