Federal Gov’t Caps Telecom Tariff Hike At 60%

The Nigerian government has announced that any increase in telecommunications tariffs will be capped at 60 per cent, following a request by telecom operators for a 100 per cent hike to address rising operational costs.

Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, disclosed this during a Channels TV programme on Thursday.

Telecom operators, led by MTN Nigeria’s CEO, Karl Toriola, had earlier raised concerns over rising inflation, foreign exchange fluctuations, and soaring energy prices, which had driven up costs.

Toriola revealed that diesel prices had skyrocketed from N230 to over N1,000 per litre since the pandemic, while the exchange rate had increased significantly, making it costlier to import essential infrastructure.

Toriola emphasised that while the government acknowledges the challenges faced by telecom operators, a 100 per cent increase would be detrimental to Nigerians.

“It shouldn’t be more than anywhere between 30 per cent to 60 percent” Tijani stated, underscoring the government’s commitment to balancing industry sustainability with consumer protection.

Tijani outlined government measures to ease the financial burden on operators and sustain the industry. These include declaring telecom infrastructure critical national assets to prevent vandalisation and harmonising multiple taxes paid by operators.

The minister also highlighted plans to invest in telecom infrastructure, including 90,000 kilometres of fibre and towers in remote areas. These efforts aim to reduce operators’ investment costs and expand their customer base.

Tijani said the government is exploring ways to enhance local content in the telecom sector, to reduce  reliance on costly imports and foreign exchange.

“This is a sector that drives economic growth, and we cannot afford to impose undue burdens on the people or the operators,” Tijani said.

The proposed tariff review is expected to be finalised by the Nigerian Communications Commission (NCC), with the government committed to ensuring affordability and sustainability in the industry.

Call, Data Rates May Hit N18/min, N1,667/1Gb

The anticipated hike in telecom service prices may push the floor costs of calls, SMS, and data up by between 30 and 60 per cent.

If 60 per cent is adopted, the average cost of phone calls will increase from N11 to N18.33 per minute, SMS charges will rise from N4 to N6.67, and the price of a 1GB bundle will increase from N1,000 to at least N1,667.

Tijani highlighted that increasing costs by 100 per cent will be harmful to citizens who are dependent on telecom services.

“This sector is responsible for driving growth in our country, it will be harmful to our people to allow the MNOs to increase by 100 per cent,” said Tijani.

This announcement follows a decade-long agitation for tariff hikes by telcos, who say they have faced a harsh operating environment that has spiked their operating cost by 300 percent over the years.

Record losses since 2023 after a significant devaluation of the naira have further compounded telcos’ woes, increasing their requests for tariff hikes.

In December, Tijani agreed that tariffs would go up in the interests of the industry’s sustainability.

Karl Toriola, the chief executive officer of MTN Nigeria, said that while telcos have asked for a 100 percent increase, the Nigerian Communications Commission (NCC) may not approve that quantum of increase as it is sensitive to the country’s current economic situation.

“We are hopeful and optimistic that the realities are staring us in the face and the right decision will be taken for the sustainability of the industry,” he said.