Telcos sector relief as FG plans tariff adjustment

By Abubakar Yunusa

Telecommunication companies in Nigeria are set to experience some relief as the government prepares for a tariff increase, a move long advocated by the sector.

The Minister of Communications and Digital Economy, Dr. Bosun Tijani, announced the impending tariff adjustment, though he emphasized that it would fall short of the full 100% increase sought by operators.

The expected rise, which could range between 40% and 50%, is seen as necessary to ensure the financial sustainability of the sector amid mounting economic pressures.

The Nigerian telecommunications industry has been grappling with soaring operational costs, exacerbated by the devaluation of the Naira and rampant inflation.

These factors have heavily impacted the profitability of major telecom players like MTN Nigeria and Airtel, who reported significant financial losses linked to foreign exchange challenges.

MTN Nigeria, for instance, posted a staggering loss of N514.93 billion for the nine months ending September 2024, driven largely by foreign exchange losses.

Despite the severe economic strains, telecom companies have been unable to adjust their tariffs for over a decade due to regulatory constraints enforced by the Nigerian Communications Commission (NCC).

The NCC requires operators to obtain approval for any pricing changes, a framework intended to protect consumers from excessive hikes.

However, operators have consistently argued that the regulatory cap has hindered their ability to cover rising costs.

The anticipated tariff increase, which will likely be finalized in the coming weeks, marks a significant shift in the government’s stance.

The move is seen as crucial for attracting continued investment and ensuring the survival of the sector, which plays a vital role in communication, education, and business for millions of Nigerians.

However, the rise in tariffs is expected to have a ripple effect on the cost of living, potentially making essential telecom services less accessible to a large portion of the population.

This could further widen the digital divide, underscoring the delicate balancing act the government faces in supporting both industry growth and consumer welfare.

As the government weighs the final details of the increase, attention will be on the potential impacts on the broader economy and the everyday lives of Nigerians who rely on affordable telecom services.