Telecommunications operators in Nigeria are pushing for an increase in Tariffs to balance out the rising expenses in operations and investments. This call for a tariff review follows a period of 11 years without any changes in rates, despite the industry’s need to cope with higher costs and investments for improving and expanding network infrastructure. The joint statement from both the Association of Licensed Telecom Companies of Nigeria and the Association of Telecom Companies of Nigeria revealed this information.
The Federal Government was urged by industry associations to engage in a productive conversation with stakeholders from the telecommunications sector in order to tackle pricing difficulties as well as create a system that considers both the financial Sustainability of operators and the affordability of consumers. Despite facing economic challenges and several uncertainties, the industry has refrained from increasing its pricing structure for general services over the past years, largely because of regulatory limitations that they have to abide by.
ALTON and ATCON raised concerns about deliberate vandalism and others.
In order to achieve a completely liberalised and deregulated industry, the existing Price Control mechanism, which does not reflect economic truths, poses a risk to the sector’s long-term viability and could diminish investor trust, a portion of the statement stated. ALTON and ATCON raised concerns about deliberate vandalism, theft, and various obstacles hindering the sector’s development. Their plea was for the safeguarding of assets and network infrastructure, and they implored the federal government to enact laws that classify telecoms Infrastructure as essential national infrastructure.
They are concerned about the impact of attacks on cell towers, fibre optic cables, and other essential assets, causing disruptions in telecommunications services and significant financial losses. Nigeria’s National Security and socioeconomic development heavily rely on a reliable telecommunications infrastructure, particularly due to the country facing various Security challenges that demand quick and decisive responses. ALTON and ATCON highlighted that their members continue to face obstacles in accessing vital Telecommunication services due to various issues such as excessive Taxation and regulations, costly right-of-way fees, insufficient Electricity provision, and damage to telecommunications infrastructure.
A significant drop in investments from $456.8m to $134m was experienced.
Therefore, they are advocating for the preservation of regulatory independence in the telecommunications industry to prevent any interference or intrusion into the Nigerian Communications Commission’s authority. This commitment to independence will help build confidence in the sector and promote Investment opportunities. Additionally, the group emphasised the importance of regulatory impartiality and autonomy in promoting a successful telecommunications industry. They restated their dedication to cooperating with the government to tackle the various issues impacting the telecommunications sector in Nigeria.
Furthermore, the associations concluded that to maximise the telecommunications sector’s potential in Nigeria, the government must focus on creating favourable regulations, improving infrastructure, increasing security measures, and allowing for appropriate pricing changes. This will not only boost Economic Growth but also drive social development. In 2023, the telecommunications sector in Nigeria experienced a significant drop in investments, falling from $456.8m to just $134m. This marks a substantial decline of $322m, representing a decrease of 70.5%, as reported by the National Bureau of Statistics. Experts warn that this reduction in investments could create obstacles for telecom companies in maintaining or improving the quality of their services.
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On the other hand, the impact of tariff hikes on people can be significant, as it can lead to increased expenses for consumers. This can be particularly challenging for individuals and families who are already struggling financially or living on a fixed income. Furthermore, higher tariffs can also limit access to essential communication services for those who rely on them for work, education, or staying in touch with loved ones. This can result in social isolation and reduced opportunities for economic advancement.