Nigeria: Telecom Tariff Hike Proposal Sparks Division Among Subscriber Bodies

Two major subscriber groups in Nigeria—the National Association of Telecommunications Subscribers (NATCOMS) and the Association of Telephone, Cable TV, and Internet Subscribers of Nigeria (ATCIS-Nigeria)—are at odds over calls by mobile network operators (MNOs) for the Federal Government to approve a telecom tariff increase. The MNOs, citing rising operational costs and a substantial decline in sector investment, have continued to push for this adjustment, highlighting the National Bureau of Statistics (NBS) report showing a 70.5% drop in telecom investments from $456.8 million in 2022 to $134 million in 2023.

NATCOMS has advocated for a 10% tariff increase, encouraging the Nigerian Communications Commission (NCC) to grant approval to relieve telcos from financial strain. However, ATCIS-Nigeria stands firm in opposing any tariff hike until MNOs first address service quality concerns and engage in meaningful discussions with subscribers.

NATCOMS President Adeolu Ogunbanjo argued that the current economic climate has made a tariff increase necessary, noting that despite a sharp rise in operational expenses over the past decade, service tariffs have not been adjusted. “Telecom services are declining in quality as operators face growing pressures,” Ogunbanjo noted, emphasizing that without a tariff increase, telecom providers face severe financial risks.

In contrast, ATCIS-Nigeria President Sina Bilesanmi has voiced subscriber concerns about service quality, including complaints of unexplained data depletion, which have led some to suspect that telcos may be unilaterally raising charges. “We oppose any tariff increase at this time as it will only burden subscribers further. Telcos should hold town hall meetings to involve subscribers, ensuring transparency in the decision-making process,” he argued, calling for a more inclusive approach.

For months, MNOs have been lobbying for a tariff review, emphasizing the need for a pricing framework that accommodates their financial challenges and enables future investments. MTN Nigeria’s CEO, Karl Toriola, underscored the sector’s precarious state, warning that without intervention, Nigeria could see a return to the inefficiencies that plagued the former NITEL monopoly. Toriola emphasized that many operators are reporting losses, urging stakeholders to review the companies’ financial statements on the Nigerian Exchange.

In August, MNOs cautioned that continued financial pressures could lead to service suspensions and even prompted load-shedding due to budget constraints. Industry groups such as the Association of Licensed Telecom Companies of Nigeria (ALTON) and the Association of Telecom Companies of Nigeria (ATCON) have petitioned the Federal Government to allow a dialogue on a tariff framework that balances consumer affordability with operator viability. They also stressed that rising operational expenses have severely impacted the industry, which has not seen a price adjustment in over 11 years.

ALTON and ATCON raised concerns over additional challenges facing the telecom sector, such as vandalism of infrastructure and regulatory obstacles. They urged the government to designate telecom infrastructure as critical national assets to deter theft and vandalism. “Attacks on towers, fiber cables, and other infrastructure disrupt services and incur significant financial losses,” they stated, calling for better infrastructure protection.

They also highlighted multiple taxation issues, high right-of-way charges, inconsistent power supply, and regulatory interference as obstacles that hinder industry growth and development. ALTON and ATCON urged the Federal Government to ensure the regulatory independence of the NCC to foster confidence among investors and sustain telecom sector growth.

“To unlock the full potential of Nigeria’s telecom sector and contribute to economic growth, we must prioritize a conducive regulatory environment, secure telecom assets, and adjust pricing to reflect economic realities,” they stated.

While the NCC recognizes the challenging environment, it maintains a cautious stance on the tariff hike request, suggesting that the MNOs’ campaign for an increase may be exaggerated, possibly to justify a price change.