Due to the escalating operational costs of the Telecommunication sector, MTN Nigeria has requested a 100 percent tariff increase from the Nigerian Communications Commission (NCC). Karl Toriola, the company’s CEO, revealed the proposal during an interview on Arise TV, noting the financial challenges confronting telecom operators. Toriola acknowledged the uncertainty surrounding the approval of the tariff adjustment, emphasising the regulator’s vulnerability to the nation’s economic realities. He emphasised that the primary goal is to ensure the long-term viability of the telecom industry, which is pivotal to economic and social well-being.
This proposal underscores the sector’s urgent need to adapt to rising inflation, fluctuating exchange rates, and surging costs of critical inputs such as diesel and power generation. Meanwhile, this sector, a cornerstone of Economic Growth and digital transformation, struggles with significant operational challenges, such as the surging cost of operations. With diesel prices increasing due to unreliable Electricity supply and the naira’s depreciation inflating the cost of imported equipment. Like other key players, MTN Nigeria has reported financial strains linked to these issues, raising concerns about the sector’s ability to sustain itself.
Regulatory hurdles and heavy taxation contribute to this situation.
Despite these escalating costs, Tariffs on telecom services have remained largely unchanged. Regulatory reluctance to approve tariff hikes has made it increasingly difficult for operators to invest in network upgrades or expand coverage, along with regulatory complexities and burdensome taxation. Telecom operators navigate a network of overlapping regulatory frameworks, often marked by inconsistencies that stifle innovation. Excessive levies, some of which are considered borderline illegal, further erode the sector’s financial stability. These challenges deter investments and inhibit the industry’s ability to meet growing demands.
Likewise, the sector has been plagued by vandalism of critical infrastructure, such as base stations and fibre optic cables, alongside rising cyberattacks. These incidents disrupt operations and compromise user trust and data security, amplifying the need for robust protective measures. Service disruptions and network congestion are persistent issues in Nigeria’s telecom industry, particularly in urban areas where demand frequently exceeds capacity. Poor call quality, dropped calls, and inadequate customer support exacerbate user dissatisfaction, highlighting the need for increased Investment in Infrastructure and workforce development.
Banking, education, and healthcare sectors are also affected by the crisis.
Meanwhile, rural and remote areas remain underserved, with limited network reach perpetuating socio-economic inequalities. Efforts to bridge this digital divide have been hampered by the industry’s financial constraints, leaving significant portions of the population without access to essential telecom services. These challenges extend beyond the sector itself, impacting key areas of the economy. Sectors such as banking, education, and healthcare, which depend heavily on reliable telecom infrastructure, face disruptions that hinder their efficiency. These issues threaten broader Economic Stability and impede national development goals.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has warned of potential service disruptions if tariffs are not adjusted. Gbenga Adebayo, ALTON’s Chairman, described the sector as being under siege, citing operational costs that have become unsustainable. Without immediate intervention, operators may be forced to scale back services, reducing access to telecom networks and further compounding economic challenges. The industry’s stakeholders, including ALTON and the Association of Telecommunications Companies of Nigeria (ATCON), have called on the government to facilitate dialogue to balance affordability for consumers with Financial Stability for operators.
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They stress the urgency of finding Sustainable Solutions to secure the future of the country’s telecom sector, which plays a critical role in the country’s digital economy. To address these challenges, it would be necessary to streamline regulatory frameworks and rationalise Taxation to create a more conducive environment for growth. Investments in Renewable Energy could mitigate the reliance on diesel, while enhanced Security measures are necessary to protect critical infrastructure from vandalism and cyber threats. Furthermore, adopting innovative technologies such as 5G and prioritising rural connectivity to improve service quality and coverage.