In the face of economic challenges, Nigeria’s major telecommunications operators, including MTN, Airtel, Glo, and 9Mobile, are poised to implement tariff hikes for voice and data services pending approval from the Nigerian Communications Commission (NCC).
A commissioned cost-based study conducted by KPMG, under the auspices of the NCC, is nearing completion, expected to recommend adjustments to tariffs. The study takes into account various economic factors such as the high cost of diesel and the depreciation of the naira against the dollar, which significantly impact operating expenses for telecom companies.
Telecom industry officials stress the urgency of tariff revisions, warning that delays could undermine the viability of telecom businesses. With a substantial portion of operational costs denominated in dollars and revenue earned in Naira, the widening currency gap poses a sustainability challenge for the sector.
ALTON, represented by its Chairman Engr. Gbenga Adebayo, has advocated for tariff adjustments, highlighting the disparity between telecom and other regulated industries where price increments have been implemented to align with economic realities. ALTON underscores the need for tariffs that reflect macroeconomic changes and escalating operational costs.
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In adherence to the Nigerian Communications Act of 2003, the NCC regulates tariffs to safeguard consumer interests and promote fair competition among operators. Cost-based and empirical studies guide the Commission’s decision-making process, ensuring that tariff adjustments strike a balance between consumer affordability, industry sustainability, and healthy competition.
Nigeria’s persistently high inflation, with the headline rate surging to 29.90% in January 2024, exacerbates economic pressures across sectors. Consumers grapple with rising prices amid a weakened naira, highlighting the urgency for tariff reviews to navigate the inflationary landscape.
As stakeholders await the NCC’s clearance based on the KPMG study, the telecom industry braces for potential tariff adjustments that reflect the prevailing economic challenges while striving to maintain service quality and industry sustainability.
Source: Nairametrics
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