Non-implementation Of Proposed 50% Tariff Hike May Cripple Telecom Sector – Operators

The non-implementation of the proposed 50 per cent tariff hike may cripple the telecom sector of the nation’s economy, telecom operators have said.

This is even as Nigeria’s telecommunications industry is at risk of financial collapse as operators decried rising costs and an unsustainable tariff structure.

Hence, industry leaders are now warning that without implementation of the 50 per cent tariff hike, the sector could slide into insolvency, leading to network failures that would take years to recover from.

They gave this warning in view of the planned mass action by the Nigeria Labour Congress (NLC) to protest the 50 per cent telecom tariff hike.

The chief corporate services and sustainability officer at MTN Nigeria, Tobe Okigbo, at a forum with telecoms CEOs, over the weekend, painted a grim picture of the industry’s future if pricing issues remain unaddressed. Okigbo emphasised that, while the cost of essential goods like tomatoes, bread, and potatoes has surged by over 100 per cent in the past year, telecom tariffs have remained stagnant.

“The discussion should not be about whether we should increase prices; it should be about whether we want a telecom sector that continues to drive the Nigerian economy. If operators can no longer sustain services due to financial strain, the cost of restoring the industry will be immense,” Okigbo stated.

Unlike electricity, where individuals can turn to generators during outages, telecommunications has no alternative backup solution. If the network fails, businesses, financial transactions, and everyday communication would be severely impacted. The industry is proposing a 50 per cent tariff increase, which Okigbo insists is not about profit but survival. The adjustment is necessary to keep networks running, improve service quality, and extend coverage to rural areas where millions remain unconnected.

“The last cost study was conducted in 2021 but was never implemented because the government felt the suggested price hikes were too high.

The reality is, the study recommended a 100 percent increase, but the government only approved 50 percent,” Okigbo explained.

The chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, warned that continued financial losses could lead to widespread insolvency in the industry.

“The telecom sector is the superhighway of the economy. If it collapses, the entire economy will suffer. The number of telecom operators has already declined due to financial pressures. Without urgent action, the sector could hit a tipping point from which recovery would be extremely difficult,” Adebayo cautioned.

Adebayo rejected arguments that telecom prices should remain artificially low due to economic hardship. “Telecom operators cannot subsidise the economic difficulties in other sectors. If prices stay unsustainably low, service quality will deteriorate, and ultimately, the industry will collapse,” he warned.

Following government approval for a 50 per cent price increase, telecom operators have submitted tariff adjustment proposals to the Nigerian Communications Commission (NCC).

The chief customer relations and experience officer at MTN Nigeria, Ugonwa Nwoye, confirmed that the regulatory process is underway, and customers should expect phased price adjustments within the next few weeks, with full implementation likely by February. Operators have promised transparency in communicating the new rates to customers while working to ensure minimal service disruptions.