The National Association of Telecommunications Subscribers (NATCOMS) has announced plans to contest the Federal Government’s approval of a 50% tariff hike for telecom operators in court.
This decision, according to NATCOMS, was made without adequate consultation with key stakeholders, including subscribers.
Mr. Deolu Ogunbanjo, President of NATCOMS, expressed dissatisfaction with the tariff increase approved by the Nigerian Communications Commission (NCC) in an interview with NAN.
He described the decision as burdensome, particularly for small businesses and individual subscribers.
“This will affect everyone from the biggest industry to the smallest company, such as the Point of Service (POS) operators. It will increase operational costs,” Ogunbanjo stated.
He acknowledged the financial challenges facing the telecommunications sector but emphasized that a marginal increase of 5% to 10% would have been more acceptable.
“We painfully agreed that, look, a moderate or marginal five per cent to 10% increase will be fine. We do not mind an increase if it is to salvage the industry that is helping us, that means so much to us and that is also contributing double-digit to Nigeria’s Gross Domestic Product,” he added.
Alternative funding options
Ogunbanjo suggested that telecom operators explore alternative funding sources, such as Initial Public Offerings (IPO), to raise capital instead of imposing a 50% tariff increase on subscribers.
“The industry operators can opt for an Initial Public Offer (IPO) for Nigerians to buy shares in their companies as a way of raising funds.
However, a situation where a whole 50% is granted for tariff hike is not cheap and it is a no! no! from us subscribers,” he insisted.
Ogunbanjo confirmed that NATCOMS would challenge the decision in court, citing the financial strain the hike would impose on subscribers already grappling with economic challenges.
NCC defends the tariff adjustment
The Nigerian Communications Commission (NCC), in a statement signed by its Director of Public Affairs, Dr. Reuben Muoka, justified the 50% tariff adjustment as a necessary measure to address rising operational costs in the industry.
“The NCC has prioritised striking a balance between protecting telecoms consumers and ensuring the sustainability of the industry, including the thousands of indigenous vendors and suppliers who form a critical part of the telecommunications ecosystem,” the statement read.
- The commission noted that while some operators had requested a 100% tariff increase, it approved a maximum adjustment of 50% after extensive consultations with stakeholders.
“The NCC recognises the financial pressures faced by Nigerian households and businesses and remains deeply empathetic to the impact of tariff adjustments. To this end, the commission has mandated that operators implement these adjustments transparently and in a manner that is fair to consumers,” the NCC stated.
Benefits of the adjustment
The NCC assured subscribers that the tariff increase would enable operators to invest in infrastructure and innovation, leading to improved service quality.
“These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefiting consumers through improved services and connectivity,” the commission added.
