After 11 years of negotiations, the Nigerian Communications Fee (NCC) permitted a 50% tariff hike in telecom providers like calls, SMS, and web bundles. Whereas the choice is a step ahead in addressing the sector’s monetary strains, business gamers say it’s solely a partial win—falling wanting the 100% hike that they had lengthy lobbied for. The 50% hike won’t resolve the sector’s challenges, together with underfunded infrastructure and rising operational prices.
Beneath the brand new coverage, operators can regulate costs inside the established tariff bands of ₦6.40 to ₦50, as outlined within the NCC’s 2013 Price Examine. Whereas Monday’s announcement didn’t state when the brand new charges would take impact, an MTN govt confirmed to TechCabal that the rise could be rolled out in every week. Subscribers who recharge earlier than the brand new tariffs are carried out or have ongoing information plans won’t expertise instant worth hikes except they make new purchases.
Whereas the adjustment helps bridge the hole between operational prices and revenues, it doesn’t totally deal with the broader points plaguing the sector.
“Tariff adjustment is a step in the direction of bridging the hole between operational prices and revenues, nevertheless it doesn’t totally deal with our want for a 100% improve. Nonetheless, we perceive this can be a transfer in the suitable route,” mentioned Tony Izuagbe Emoekpere, President of the Affiliation of Telecommunications Operators of Nigeria (ATCON). “This adjustment will assist operators put money into infrastructure, increase protection, and enhance service high quality.”
Gbenga Adebayo, President of the Affiliation of Licensed Telecommunications Operators of Nigeria (ALTON), mentioned the tariff improve is only one a part of a broader agenda to make sure the sector’s sustainability.
“Rising tariffs was solely a part of the answer. We’re grateful for the progress made, however we’re taking it one step at a time,” he mentioned.
Trade stakeholders like Adebayo and Emoekpere consider addressing issues like a number of taxation, the safety of telecom infrastructure, and uniformity in the suitable of method for infrastructure are essential to bettering service high quality.
“The main focus mustn’t solely be on tariffs,” mentioned Adebayo. “We want a holistic strategy to enhance the ecosystem—beginning with the safety of telecom infrastructure by way of correct enforcement of the Crucial Nationwide Infrastructure gazette.”
The tariff hike will assist main operators like MTN and Airtel handle their bills and repair money owed, as operational prices have surged by 120%. The extra income may also be directed towards capital investments to boost service high quality. NCC Govt Vice Chairman Aminu Maida has given operators a three-month window to get better losses, after which the regulator will now give attention to service high quality enhancements.
“We stay dedicated to supporting Nigeria’s digital transformation agenda and driving inclusive development,” mentioned Karl Toriola, MTN Nigeria CEO. “This tariff adjustment will assist us keep the essential investments required to ship high-quality providers to Nigerians.”
Nigeria’s broader financial challenges, together with a number of forex devaluations, inflation, and the removing of gasoline subsidies, have exacerbated the telecom business’s monetary pressures. Within the final twenty years, Nigeria has skilled 4 forex devaluations and two financial recessions, all of which have considerably impacted telecom operators’ operational prices..
On the time of Nigeria’s telecom liberalization in 2001, the naira exchanged at ₦104 to the greenback. By 2003, it had risen to ₦135, prompting the NCC to approve a tariff hike. By 2013, when the naira stabilized at ₦155, tariffs have been revised downward because the sector grew quicker than headline inflation r. Nonetheless, the present tariff construction has turn out to be more and more unsustainable because the naira has fluctuated between ₦1,500 and ₦1,700 over the previous yr. Headline inflation has accelerated above 33% since October 2024, placing further pressure on telecom operators’ means to fulfill rising prices.
“What has occurred through the years is compounded inflation and the devaluation of the naira, which has made manufacturing prices considerably larger than they was once,” mentioned a telecom CEO who requested to not be named for worry of suggesting unhealthy religion across the negotiations.
Many operators consider the long-term resolution lies in totally deregulating the telecom sector, permitting costs to be decided by market forces fairly than a centralized tariff system. Beneath the present regulatory framework, the Nigerian Communications Act of 2003 provides the NCC the authority to set worth flooring and ceilings for telecom providers. For example, the value flooring for a one-minute name is ₦6.40, whereas the ceiling is ₦50. Operators can set their costs inside this vary however should search NCC approval for any changes—a course of that’s typically gradual and restrictive.
“The best resolution could be to completely decontrol the telecom market and let tariffs be set by market forces,” mentioned one senior telecom govt who requested to not be named so he may communicate freely. “This is able to permit operators the pliability to regulate costs in real-time to answer financial situations. Nonetheless, such a transfer would require a complete overview of the Nigerian Communications Act.”
Some have proposed another resolution: implementing a hard and fast approval timeline for any tariff hike. For instance, operators would have 90 days to submit worth adjustments, and if the NCC doesn’t reply inside that interval, the proposed worth adjustments could be thought of permitted.