In a significant development for Nigeria’s telecommunications industry, the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, has announced that telecom service tariffs are set to increase by 30 to 60 percent. This adjustment, far below the 100 percent hike initially demanded by mobile network operators (MNOs), aims to balance industry sustainability with consumer affordability.
During an interview on Channels TV, Dr. Tijani revealed that the new rates would see call charges rise from the current average of N11 per minute to approximately N18.33 per minute, if a 60 percent adjustment is adopted. SMS charges will increase from N4 to N6.67, while the cost of 1GB of data could climb from N1,000 to N1,667.
“The sector drives growth in our country. Allowing a 100 percent tariff increase would be harmful to citizens who heavily depend on telecom services,” Dr. Tijani stated, underscoring the government’s focus on protecting consumers while ensuring the industry remains viable.
Challenges Driving the Increase
This announcement comes amid ongoing struggles in the telecom sector, where operators have been grappling with escalating operational costs, reportedly rising by 300 percent over the last decade. The devaluation of the naira in 2023 further compounded these challenges, with many telcos reporting significant financial losses.
Telecom operators, including MTN Nigeria, have long advocated for tariff adjustments to reflect the realities of operating in a volatile economic environment. MTN Nigeria’s CEO, Karl Toriola, reiterated that while MNOs initially requested a 100 percent hike, the Nigerian Communications Commission (NCC) is unlikely to approve such an increase due to the nation’s economic sensitivities.
“We remain hopeful that the right decision will be made to ensure the sustainability of the industry,” Toriola said.
The Role of NCC and the Need for a Tariff Review
As the regulatory body, the Nigerian Communications Commission (NCC) plays a critical role in ensuring that tariff adjustments align with both industry needs and broader economic realities. For years, the NCC has monitored and regulated telecom pricing to balance consumer protection with the financial viability of the sector. However, with the drastic increase in operational costs faced by telecom companies, the need for a tariff review has become more urgent.
The increase in costs, driven by factors such as inflation, the naira’s devaluation, and rising infrastructure expenses, necessitates an upward adjustment in pricing. This move is seen as essential for ensuring the survival of telecom operators while continuing to meet the demand for quality and affordable services.
“The industry must be able to reflect the economic reality. Without an appropriate tariff structure, operators will struggle to sustain investments in technology and infrastructure, which are crucial for the development of a robust digital economy,” explained an industry expert.
Balancing Sustainability and Affordability
The new tariff plan reflects a decade of negotiations between telecom operators and regulatory authorities, including the NCC. While the increment aims to alleviate the financial strain on MNOs, it also considers the socio-economic challenges facing millions of Nigerians who depend on affordable telecom services for daily activities.
Industry stakeholders are optimistic that the moderate hike will help stabilize the sector, foster investment, and maintain the growth trajectory of Nigeria’s digital economy. However, the burden on consumers, particularly in a challenging economic climate, remains a key concern.
The NCC’s proactive stance in monitoring the situation will be crucial as it seeks to strike a balance between supporting the telecom industry’s sustainability and shielding consumers from steep price increases. The commission is expected to provide further updates on the implementation timeline and regulatory framework guiding the tariff adjustment.
