The telecommunications operators in Nigeria are gearing up for an impending adjustment in tariffs for voice and data services. This move comes in response to a comprehensive cost assessment conducted by KPMG, on behalf of the Nigerian Communications Commission (NCC), signaling potential changes that could affect consumers’ wallets.
According to insights obtained by Nairametrics, the KPMG study, nearing completion, aims to propose a revised pricing structure for the industry. Expected to factor in various economic variables, including the soaring costs of diesel and the depreciation of the Naira, the study may recommend tariff increases to maintain the financial viability of telecom operations.
Telecom officials, speaking with Nairametrics, underscore the urgency of tariff revisions, highlighting the precarious position of telecom businesses amidst mounting economic challenges. A delay in implementing tariff adjustments, they warn, could pose significant threats to the sector’s sustainability.
An anonymous telecom sector official emphasized the critical nature of the planned tariff increase, stressing that a failure to act promptly could jeopardize the viability of telecom enterprises. With a substantial portion of operational costs tied to the dollar and earnings in Naira, tariff revisions have become imperative to navigate the economic headwinds effectively.
Meanwhile, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) has been actively advocating for tariff hikes. ALTON Chairman, Gbenga Adebayo, recently engaged with Bosun Tijani, the Minister of Communications, Innovation, and Digital Economy, to address the pressing need for tariff adjustments. Adebayo emphasized that current tariffs set by regulators are insufficient, especially in light of escalating operational costs.
In adherence to the Nigerian Communications Act (NCA) 2003, which mandates the NCC with tariff regulation in the telecom industry, the Commission ensures that pricing regulation is guided by periodic cost-based studies. These studies aim to establish appropriate cost structures that foster healthy competition, expanded choices for subscribers, and the sustainability of the Nigerian telecom industry.
Against the backdrop of double-digit inflation affecting virtually all products in Nigeria and a weaker Naira exacerbating costs, the need for tariff adjustments becomes increasingly pressing. In January 2024, Nigeria’s headline inflation rate surged to 29.90%, reflecting the persistent inflationary pressures gripping the nation.
As stakeholders await regulatory approval from the NCC, the telecom sector braces for potential tariff revisions that could impact consumers and shape the industry’s landscape in the coming months.
Credit: Nairametrics
