Telecom tariff hike divides subscriber bodies

Two subscriber bodies, the National Association of Telecommunications Subscribers (NATCOMS) and the Association of Telephone, Cable Tv and Internet Subscribers of Nigeria (ATCIS-Nigeria) are at loggerheads over the push by mobile network operators (MNOs) to persuade the Federal Government to accede to hike end user tariffs of their services.

 The MNOs have never given up on calls for an upward tariff review in a move to offset the soaring costs of operation and declining investments in the telecom sector which the National Bureau of Statistics (NBS) said was approximately a 70.5 per cent decline to $134m in 2023 from $456.8million in the corresponding year, a decline of $322million.

 While NTACOMs has urged the sector’s regulatory body, the Nigerian Communications Commission (NCC), to approve a 10 per cent tariff hike for the telcos, ATCIS-Nigeria has insisted on improved service quality and proper engagement with the subscribers first before any discussion for tariff hike. 

 NATCOMS President, Adeolu Ogunbanjo, in a telephone conversation, had argued that a hike had become long overdue in the light of the roller-coaster drive the economy has been subjected to over the years.

 Like ATCIS-Nigeria, Ogunbanjo acknowledged the worsening quality of telecom services, blaming it on the current economic climate which he said made it increasingly difficult for them to maintain standards.

 “Telecom services have significantly declined in quality, and operators are facing mounting pressures,” Ogunbanjo said.

 He noted that, despite increased operational expenditures over the last 11 years, there has been no matching increase in service tariffs.

 This lack of adjustment has left telecom businesses in a risky financial situation, necessitating collaboration among stakeholders to find a sustainable solution.

 ATCIS-Nigeria President, Sina Bilesanmi, expressed concern over service quality, a development which he said needed to be addressed before the MNOs started rail-roading tariff hike into the throats of the subscribers.

 According to him, he has been inundated with complaints about persistent and inexplicable data depletion by members of the group, strengthening the belief that the telcos may have secretly unilaterally increased service charges.

 He said: “We are against any tariff hike at this time because it will increase the yoke on the frail necks of our members. Instead of playing to the gallery, the telcos should engage the subscribers in a town hall. Let them carry the subscribers along so that there will be a sense of belonging. The ultimate incidence of tariff hike will inevitably fall on the subscribers. If this is a settled truth, why are you not carrying them along?

 “Let the MNOs be more open and transparent. We acknowledge the difficulties in the operating environment but we insist that the consumer is king and should be given an audience too.”

 For the past few months, Nigerian telecom companies have been advocating for an increase in telecom tariffs and canvassing for policies they feel will benefit them and boost their capacity to invest in networks for expansion.

MTN Nigeria CEO, Karl Toriola, said the sector was already in an intensive care unit (ICU) gasping for breath, warning that if urgent steps were not taken, all the gains of the now famous telecom revolution will be wiped off.

 He also warned of the likelihood of a return to the inglorious era of NITEL characterized largely by inefficiency.

 He said all the telcos have been posting losses, a statement that could easily be confirmed by going through the companies’ books (especially MTN Nigeria and Airtel Nigeria) shared with the Nigeria Exchange as publicly listed business entities.

 In August, the telcos threatened to stop services, and implemented a load-shedding schedule due to budgetary constraints.

 This demand comes after 11 years of stability in tariffs, during which the industry has faced significant increases in operational costs (opex) and investments in network expansion and upgrades.

 The telcos had in a joint statement through its industry focused pressure group, Association of Licensed Telecom Companies of Nigeria (ALTON)  and the Association of Telecom Companies of Nigeria (ATCON) sought regulatory approval to hike tariffs.

 The associations called on the Federal Government to facilitate a constructive dialogue with industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with operators’ financial viability.

 According to the group, this will assist to reduce the sector’s escalating opex, which has been a long-standing issue.

 “Despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.

 “For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” part of the statement read.

 The groups expressed worries over the spate of wilful infrastructure vandalism and theft and other challenges mitigating the growth of the sector.

 They had requested the protection of assets and network infrastructure and urged the Federal Government to pass legislation that designates telecommunications infrastructure as critical national infrastructure.

  “Attacks on cell towers, fibre optic cables, and other critical assets disrupt telecom services and result in significant financial losses for operators,” telcos lamented.

 On infrastructure deficits, ALTON and ATCON said members still lack access to essential telecom services due to a myriad of challenges, including multiple taxation and regulations, prohibitive right-of-way charges, inadequate electric power supply, and vandalism of telecommunications infrastructure.

 ALTON and ATCON demanded the sustenance of a culture of independence in the regulatory landscape to safeguard against undue influence and unwholesome incursion into NCC’s domain, which will inspire trust in the telecommunications sector and encourage investment.

 Further, the group said regulatory neutrality and independence were crucial to ensuring a thriving telecommunications sector.

 They reaffirmed commitment to working collaboratively with the government to address the challenges facing the telecommunications industry in Nigeria.

 “By fostering a conducive regulatory environment, prioritising infrastructure development, enhancing security measures, and facilitating pricing adjustments, the government can unlock the full potential of Nigeria’s telecommunications sector, driving economic growth and societal development,” the associations said.

 While the regulator acknowledged the difficult environment, it nonetheless believes the campaign of the telcos is but a cheap blackmail to justify a pricing increase..