Nigeria: NATCOMS Proposes 10% Tariff Increase for Telecoms Amid Rising Costs

The National Association of Telecommunications Subscribers (NATCOMS) has urged the Nigerian Communications Commission (NCC) to approve a 10% tariff increase for telecommunications companies (Telcos) to address rising operational costs.

Speaking to the News Agency of Nigeria (NAN), Mr. Adeolu Ogunbanjo, National President of NATCOMS, emphasized that the proposed increase is essential to support telecom operators struggling with financial challenges. He noted that while the industry faces significant cost pressures, the government and NCC should collaborate with stakeholders to find a solution that balances the interests of both telecom companies and subscribers.

Ogunbanjo stated that experts believe a marginal tariff increase would enable telecoms to enhance service delivery, suggesting that the 10% hike should directly translate to improved services for customers. He remarked, “Once the NCC approves the marginal 10% increase, it is crucial that telecom operators use it to upgrade their services for subscribers. Our macroeconomists are urging for assistance to this critical sector.”

Ogunbanjo acknowledged that while the public may be hesitant about higher tariffs, it may be a necessary step to ensure continued access to quality services amid rising costs. He stressed that the telecom industry has not raised service charges in over a decade, despite recent surges in operational expenses, particularly for fuel and other essentials that keep the networks running.

In light of these challenges, telecom operators have proposed load shedding as an alternative to price hikes. This approach would involve limiting services to specific areas at designated times, similar to electricity rationing. However, Ogunbanjo rejected this idea, warning that it could have devastating effects on key sectors of the economy.

He explained that load shedding would disrupt critical industries, including banking, education, health, and business, which are increasingly reliant on uninterrupted telecom services. “If telecom companies resort to load shedding, it will significantly disrupt businesses, particularly in major commercial hubs like Lagos. Virtual meetings, online marketing, and other digital services would all be severely affected,” he cautioned.

Ogunbanjo added that subscribers would hold telecom companies accountable for any service disruptions, underscoring the potential ripple effects on the economy if load shedding becomes a reality. He highlighted that the current quality of service in the telecom sector is already suffering due to mounting operational costs.

Furthermore, he referenced a recent analysis by Bismarck Rewane, Managing Director of Financial Derivatives, who described the telecom industry as being in a “state of crisis.” Rewane’s findings, based on a comprehensive industry survey, indicated that the sector is financially strained and in urgent need of intervention.

“Respected economists like Rewane have highlighted that the telecom industry is in an ‘intensive care unit.’ This situation calls for urgent action to revive the sector and prevent further deterioration,” Ogunbanjo said.

In conclusion, he urged the NCC and stakeholders to consider the 10% tariff increase as a viable solution to strengthen the telecom sector and ensure the continued provision of essential services to Nigerians.