Amid rising Inflation and escalating living costs, Nigeria’s recent increase in Telecommunication Tariffs has ignited widespread public outcry. Citizens, already struggling with economic challenges, view the increases as a further strain on their finances. Meanwhile, the industry stakeholders noted that the adjustment is crucial for business sustainability. However, these sectors have long been considered affordable compared to other sectors. Moreover, current economic pressures such as inflation, subsidy removal, and increased energy costs have made it increasingly difficult for telecom companies to remain profitable.
To address these industry challenges, operators have pushed for fee increases, raising concerns among consumers already struggling with daily expenses. Over the past twelve years, the cost of telecom services has remained largely unchanged despite soaring inflation rates. This stagnant pricing structure has rendered the sector’s operations unsustainable in a high-cost environment. Rising energy prices, the cost of imported equipment, and other economic pressures have significantly inflated operational expenses for telecom companies across the country.
Inflation, rising operational costs, and tariff adjustments.
The Nigerian Communications Commission (NCC) also recently signalled the tariff adjustment, which, if implemented, will increase call charges from ₦11 to ₦15.40 per minute, SMS costs from ₦4 to ₦5.60, and a 1GB data bundle from ₦1,000 to ₦1,400. The Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, further confirmed this increase but clarified it would not reach the 100% hike initially proposed by operators. He emphasised the need to balance Consumer Protection with industry profitability. This price adjustment is driven mainly by the industry’s mounting economic pressures. As a result, operators argue that tariff adjustments are necessary to maintain quality services and business continuity.
Furthermore, the Secretary-General of the Private Telecommunications and Communications Senior Staff Association, Okonu Abdullahi, acknowledged the industry’s struggles. Although Trade unions typically oppose tariff hikes, Abdullahi admitted that the current economic circumstances make the situation far more complex. Rising operational costs have started affecting workers as employers struggle to adjust Salaries in line with inflation. For the average citizens, the increases will add to an already heavy financial burden. Rising inflation has eroded purchasing power, with households struggling to meet basic needs. So, any increase will further strain consumers, many of whom rely heavily on affordable communication services for both professional and personal use.
Challenges and opportunities for growth and sustainability in the sector.
Meanwhile, Nigerians have expressed frustration over the changes, questioning why major telecom operators struggle despite significant revenues. Some argue that the quality of service remains inconsistent despite the increased charges. The public’s concern centres around whether the additional Revenue generated from the increase will lead to noticeable improvements in service quality. Moreover, as the country increasingly embraces digital solutions, data services have become a significant revenue driver for telecom operators. According to the National Bureau of Statistics (NBS), voice subscriptions have declined while data subscriptions continue to rise.
MTN Nigeria, the largest telecom operator in the country, reported that data services contributed 43 percent of its revenue in 2023, surpassing voice revenue for the first time. This shift is driven by evolving consumer habits, with more users relying on data for communication, online transactions, and content creation. The increase in data costs will particularly affect sectors such as Education and the creative industry, where affordable Internet Access is crucial for growth. Therefore, this increase will have significant long-term implications for the national economy, particularly for vulnerable groups such as students, content creators, and small businesses.
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While the new developments may be necessary for the sector’s sustainability, the trade-off involves placing additional financial pressure on consumers. The government must ensure telecom operators remain profitable while safeguarding the public’s interests. To balance industry growth with consumer protection, policymakers must explore alternative strategies, such as reducing operational barriers for telecom companies or implementing targeted Subsidies for vulnerable groups. As the debate continues, Nigerians remain concerned about how the new tariffs will impact their daily lives.