Telecommunications companies in Nigeria, including MTN Nigeria and Globacom, are seeking approval from the Nigerian Communications Commission (NCC) to increase their tariffs. This request comes in response to foreign exchange losses and rising energy costs, which led some operators to report losses last year.
The telcos’ proposal for a tariff hike follows similar actions by other companies, including MultiChoice, and reflects the broader trend of rising prices across various sectors.
In a joint statement issued by the Association of Licensed Telecom Companies of Nigeria and the Association of Telecom Companies of Nigeria, the industry emphasized the need for a tariff adjustment to align with economic realities. They cited regulatory constraints as a hindrance to adjusting prices, noting that the current price control mechanism threatens the industry’s sustainability and investor confidence.
Efforts to reach the NCC for comment on the tariff request were unsuccessful as of the time of reporting. The NCC regulates prices in the telecom industry and must approve any changes proposed by operators.
Telecom operators have faced significant challenges, including increased operational costs due to foreign exchange fluctuations, network expansion, and upgrades. These challenges have led to reduced investments in the sector, as evidenced by a decline in investment from $456.8 million in 2022 to $134 million in 2023, according to the National Bureau of Statistics.
MTN Nigeria reported a substantial loss for the fiscal year 2023, primarily attributed to foreign exchange market liberalization. Airtel Africa also reported a decline in post-tax profit due to forex market dynamics.
Telecom industry leaders warn that without a tariff adjustment, operators may struggle to survive, leading to potential service disruptions for millions of Nigerians. They highlight the need for regulatory support to address the industry’s challenges and ensure the continued provision of quality services.
Subscribers and economists have expressed support for a tariff increase, citing the need for operators to cover rising operational costs and maintain service quality. They urge the government to review its policies and intervene to support the industry amid economic challenges.
As telecom operators await regulatory approval for tariff adjustments, the industry’s stakeholders emphasize the importance of finding a balance between consumers’ affordability and operators’ financial viability to sustain the sector’s growth and development.
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