Foreign exchange: Telecos Search NCC Approval for Tariff Hike

Foreign exchange: Telecos Search NCC Approval for Tariff Hike

Telecommunications operators within the nation together with MTN Nigeria and Globacom have requested for Federal Authorities approval via the Nigerian Communications Fee to boost their tariff.

The event got here after international alternate losses and rising power prices pressured a few of the operators to submit losses final yr.

The telcos’ proposal to boost their tariff got here barely 24 hours after MultiChoice, a South African pay tv firm raised its tariff. A number of corporations together with Discos and brewing corporations have additionally raised their costs in latest occasions.

On Thursday, the telcos, underneath the aegis of the Affiliation of Licensed Telecom Firms of Nigeria and the Affiliation of Telecom Firms of Nigeria, issued a joint assertion asking the federal government to expedite the approval.

The 2 our bodies of their assertion defined, “Regardless of the antagonistic financial headwinds, the telecommunications trade stays the one trade but to assessment its normal service pricing framework upward within the final 11 years, primarily as a consequence of regulatory constraints.

“For a completely liberalised and deregulated sector, the present value management mechanism, which isn’t aligned with financial realities, threatens the trade’s sustainability and may erode traders’ confidence.”

The associations known as on the federal authorities to facilitate a constructive dialogue with trade stakeholders to handle pricing challenges and set up a framework that balances customers’ affordability with operators’ monetary viability.

The telecom trade seems to be amongst a couple of sectors which have but to assessment their costs regardless of the rising inflation within the nation amid different financial challenges. They blamed this on the regulatory restraints which have been stopping them from pricing appropriately.

Efforts to succeed in the fee’s Director of Public Affairs, Reuben Mouka, on whether or not the request can be thought-about proved abortive as of press time on Thursday. There have been no responses to calls, WhatsApp messages, and textual content messages despatched to his line.

The NCC regulates costs within the telecom trade, and telecom operators will not be allowed to implement any value modifications with out the regulator’s approval. The regulator has stated a cost-based research is being carried out to find out if it will approve value increments for the operators.

The Chairman, Affiliation of Licensed Telecoms Operators of Nigeria, Gbenga Adebayo, stated in a publication on Thursday that value reflective tariff was non-negotiable.

“We’ve seen the influence of value management in different segments of the economic system, like energy. If suppliers can’t function sustainable enterprise fashions, then they’ll cease investing. When that occurs, the present infrastructure begins to crumble.

“For energy, a client can select to take possession of the answer by shopping for a generator, or a photo voltaic panel. For gasoline, the federal government can step in as a supplier of the final resort and handle a subsidy regime that mitigates the influence on the inhabitants. These choices will not be obtainable within the telecoms sector. There isn’t any self-help answer,” he defined.

The trade has confronted vital will increase in operational prices occasioned by the shortage of international alternate, community growth, and upgrades, which have additionally negatively affected the underside strains of the operators.

Funding within the sector has additionally dwindled to $134m in 2023 from $456.8m within the earlier yr, a decline of $322m, based on the Nationwide Bureau of Statistics.

The decline represented a lower of roughly 70.5 per cent.

MTN Nigeria Plc has disclosed a considerable lack of N740.4bn for the fiscal yr 2023, a notable surge from the N81.8bn loss reported in 2022, marking an alarming 804 per cent enhance, equal to N658.6bn.

This drastic monetary setback is primarily attributed to the results of the international alternate market liberalisation that commenced in June of the earlier yr.

MTN clarified that it utilized an official alternate fee of N907.11 per greenback, based mostly on NAFEM (Nigerian Autonomous International Alternate Market), as of December 31, 2023.

This means that the reported loss would possibly escalate additional if the prevailing alternate fee between the naira and greenback stays unchanged by the top of March, coinciding with the publication of its Q1 outcomes.

In the meantime, Airtel Africa reported a 99.6 per cent decline in its post-tax revenue to $2m on the finish of the 9 months ended December 2023 from $523m on the finish of the identical interval in 2022.

The important thing driver behind these losses was the liberalization of the foreign exchange market in June 2023, which led to a 96.7 per cent devaluation of the naira from N461 per greenback in December 2022 to N907.1 per greenback by the top of 2023, MTN disclosed in its audited monetary outcomes for 2023.