The Federal Government has said it is now working to address issues threatening the sustainability of the country’s telecom sector to ensure the availability of connectivity for all Nigerians.
The Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, stated this after receiving an interim report on the sustainability of Nigeria’s telecom sector from KPMG.
The report is expected to make recommendations on the raging issue of tariff review being clamored by the telecom operators, who argued that the industry’s sustainability faces a severe threat with the current tariff regime.
Between sustainability and availability
Welcoming the receipt of the interim report, the Minister said the government would strive to strike a balance between sustainability of the telecom sector and availability of connectivity for Nigerians.
“Today, I welcomed consultants from KPMG Nigeria and SimmonsCooper Partners as they shared an interim report on the sustainability of Nigeria’s Telecoms Sector.
“As a government, we are working to find a balance between the sustainability of the sector and ensuring the availability of meaningful connectivity for our people.
“This report is part of our commitment to ensure that we achieve our goal of providing internet access as a human right for all,” he said.
Long term solution
Speaking earlier on an Arise TV program, the Minister had said the government was looking at a medium to long-term solution in response to the request for tariff increase by the telecom operators.
- According to him, the study by KPMG was to identify issues around sustainability of the telecom sector and what the government would need to do to support the industry.
- He added that beyond the call for tariff increase, there are a lot of other issues that need to be addressed by the government, and that was why the study was conducted.
“Beyond just the conversation that has been out there about increasing tariff, which is what everybody is talking about, we think, yes, there may be a need for it, but there are so many other things that we need to do as a country to ensure that that sector is competitive.
“And beyond just supporting them to be competitive, the government must also invest in digital infrastructure as well,” he said.
What you should know
Against the backdrop of rising operational cost, telecommunications operators have been raising concerns about sustainability and demanding that the Nigerian Communications Commission (NCC) approve a tariff increase for them.
Specifically, the CEO of MTN Nigeria, Mr. Karl Toriola, recently stated that the telecom industry is now facing a sustainability threat that must be addressed through a tariff review.
- While emphasizing that telecommunications is a fundamental human right and a critical element for driving an economy, Toriola noted that without a sustainable industry, Nigerians’ economy and well-being will suffer.
- He highlighted how inflation, foreign exchange devaluation, and rising energy prices have drastically increased operational expenses for telecom operators.
- According to him, diesel costs have risen from pre-COVID levels of N230 to over N1,000 per liter, while the official exchange rate has shifted from N424.50 to about N1,550 at the end of 2024, drastically increasing the cost of importing critical infrastructure like base stations, which now cost nearly four times more than they did two years ago.
