The Nigerian Communications Commission (NCC) has approved an increase in telecom tariffs, set to commence in January 2025.
This decision concludes over a decade of appeals from telecom operators, including MTN Nigeria, Airtel, and 9Mobile, who have sought price adjustments to align with economic conditions.
For more than eleven years, these operators have faced high operational expenses due to inflation but were unable to adjust their pricing structures accordingly.
The NCC has now acknowledged these challenges, with a representative stating that the forthcoming announcement will consider input from both stakeholders and the public, aiming to benefit subscribers and operators.
The proposed adjustments include a potential 40% increase in telecom tariffs. If implemented, the cost of a phone call may rise from ₦11 to ₦15.40 per minute, SMS charges from ₦4 to ₦5.60, and a 1GB data bundle from ₦1,000 to at least ₦1,400.
The NCC, responsible for reviewing and approving tariff changes in the telecommunications sector, aims to balance the financial impact on consumers while addressing the operational challenges faced by service providers.
In October 2024, the commission denied Starlink’s request to double its subscription fees to ₦75,000, ascertaining its focus on protecting consumer interests.
The anticipated tariff increase has brought up the issue of the possible effect on internet usage, especially given the country’s focus on digital inclusion.
Rising food inflation, currently at 39.93%, adds to these apprehensions. Nonetheless, telecom companies have reported high financial losses attributed to the prolonged period without price adjustments.
MTN Nigeria reported a ₦137 billion loss in 2023, which expanded to ₦514.9 billion in the first nine months of 2024. Similarly, Airtel Africa reported losses of $89 million in the 2024 fiscal year, primarily due to challenges in Nigeria.
Gbenga Adebayo, president of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), argues that implementing cost-reflective pricing will encourage investment and enhance service quality over time.
In addition to tariff adjustments, the NCC is introducing reforms to improve tariff transparency and combat fraud in the Application-to-Person (A2P) messaging sector, inviting collaboration to enhance Nigeria’s telecommunications sector.
Again, the NCC plans to simplify mobile network operators’ tariff plans from the current 369 to seven, aiming to simplify choices for consumers and ensure better understanding and monitoring of services.
These developments occur amid a decline in foreign investments in Nigeria’s telecommunications sector, which dropped by 87% in the third quarter of 2024.
The Federal Government has announced plans to co-invest in expanding telecom infrastructure to reduce connectivity gaps nationwide, aiming to reverse this trend and address industry challenges.
Dr Bosun Tijani, minister of Communications, Innovation and Digital Economy, supports these adjustments, acknowledging their necessity in a recent interview.
With the NCC approving the new telecom tariffs and the regime approaching, stakeholders and consumers are advised to stay informed about the forthcoming changes and their possible impacts on telecommunications services in Nigeria.
Culled from Tech Economy
