The Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, has said that the planned increment in telecommunications tariffs to be approved by the Nigerian Communications Commission (NCC) should not be more than 60%.
Tijani stated this while featuring on a Channels TV program on Wednesday, where he insisted that the 100% increment requested by the telecom operators is impossible.
According to him, the government is doing a lot of other things policy-wise to ease the burden on the telecom operators and ensure the industry’s sustainability.
Responding to a question on the possible percentage increment the NCC may likely come up with having dismissed the 100% request, the Minister said:
“It shouldn’t be more than anywhere between 30% to 60%.”
Supports for the telecom industry
Tijani said while the telecom operators believe that a 100% increase is needed to sustain their businesses, the government is looking at several ways to drive the industry’s sustainability.
“This is a sector that is responsible for driving growth in our country, it will be harmful to our people to allow the MNOs to increase by 100%.
“But what we’re now doing that people are not paying attention to is that we’re asking difficult questions, that is, saying can we possibly increase the local content in that sector?
“Can we reduce the amount of imports that are coming into that sector, which means they have to look for foreign exchange, which is more expensive?”
- The Minister added that the government has also declared all telecom infrastructure as critical national infrastructure, which is what the operators have been clamoring for over the years.
- According to him, the government took the decision because it realized that when people go and vandalize telecommunications equipment, it drops the quality of service and the telecom operators also spend a lot of money to repair it.
- In the ongoing tax reform, Tijani said the government is also harmonizing the multiple taxes that the operators are paying to allow them to thrive.
Investment in infrastructure
Tijani said the government is also working on investing in telecom infrastructure, which will also take some investment burden off the telecom operators.
“We are, for instance, investing in 90,000 kilometers of fibre. When we do the investment, it will allow these companies to be able to reach more people.
“If we’re investing in towers in difficult-to-reach locations in rural areas, it will give them the opportunity to increase the pool of customers that they have without making that heavy investment,” he said.
What you should know
Echoing the sentiment of the industry in a recent interview, the CEO of MTN Nigeria, Mr. Karl Toriola, had said that the telecom industry was facing a sustainability threat that must be addressed through a tariff review, adding that the telecom operators had put forward a request for 100% increase.
- 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.
