Telecom Operators Push for 100% Tariff Increase Amid Rising Costs

Telecommunications companies in Nigeria have proposed a 100% increase in tariffs, citing rising operational expenses and financial strain. The proposal, submitted to the Nigerian Communications Commission (NCC), is aimed at addressing inflation, exchange rate volatility, and the soaring cost of key operational inputs.

Speaking during an interview on Arise TV on Thursday, MTN Nigeria’s Chief Executive Officer, Karl Toriola, revealed details of the proposed hike but acknowledged the uncertainty surrounding its approval by the NCC.

“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 explained.

The telecom chief stressed the importance of the tariff adjustment for the sector’s sustainability, emphasizing that the goal is not short-term profitability but the long-term survival of the industry.

“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,” Toriola added.

Mounting Costs

Telecom companies have been grappling with steep operational costs driven by inflation, fluctuating exchange rates, and rising prices of diesel and other essential inputs. The situation has made it increasingly challenging for operators to maintain profitability, expand their networks, and deliver quality services.

Earlier this week, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, described the sector as “under siege.” He warned that unless tariffs are adjusted, operators may face service disruptions and could resort to service shedding in certain areas.

“Despite these challenges, tariffs have remained unchanged, leaving operators struggling to maintain quality service and expand their networks,” Adebayo said.

Calls for Dialogue

The telecom sector’s first request for a tariff adjustment was made in April 2024, but no significant progress has been achieved. In a joint statement, ALTON and the Association of Telecommunications Companies of Nigeria (ATCON) urged the Federal Government to facilitate a constructive dialogue with industry stakeholders.

The associations stressed the need for a balanced framework that ensures consumer affordability while supporting the financial sustainability of operators, noting that tariffs have remained stable for 11 years despite escalating costs.

A Risk to the Sector’s Future

Operators have warned that failure to address the financial strain could jeopardize the survival of one of Nigeria’s most critical industries.

“The sector is at a crossroads. Without immediate intervention, we risk service disruptions and long-term damage to the economy,” Toriola cautioned.

The proposal is now awaiting a decision from the NCC, as stakeholders across the industry emphasize the urgent need for solutions to safeguard the sector’s future while minimizing the impact on consumers.