NATCOMS urges 10% telecom tariff hike to combat rising costs

The National Association of Telecommunications Subscribers (NATCOMS) has urged the Nigerian Communications Commission (NCC) to approve a marginal 10% tariff increase for telecom operators to alleviate the impact of rising operational costs on the sector.

The call comes amid growing concerns over the sustainability of telecom services, with operators struggling to cope with escalating expenses.

In a statement to the News Agency of Nigeria (NAN), NATCOMS National President Mr. Adeolu Ogunbanjo highlighted the urgent need for the tariff hike to ensure the survival of telecom companies and improve service quality.

According to Ogunbanjo, economic challenges, including rising fuel prices and inflation, have significantly increased the cost of maintaining telecom networks, putting immense pressure on operators.

“The quality of service rendered by telecom companies has deteriorated, and they are also complaining,” Ogunbanjo noted. “Their operations have become burdensome due to the rising costs of essentials such as petrol, diesel, and other materials critical to network performance. Despite these challenges, service charges have not been adjusted in over 11 years.”

Ogunbanjo acknowledged that while the proposed 10% tariff hike might be a concern for subscribers, it is crucial for enhancing the overall quality of telecom services in Nigeria.

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He stressed that without the increase, the financial strain on telecom operators could further compromise service delivery.

“The moment the NCC approves this marginal 10% increase, operators must channel it towards improving services for their subscribers,” Ogunbanjo stated. He also emphasized the importance of considering macroeconomic inputs, citing insights from economists who have pointed out the sector’s dire need for support

Economist Bismarck Rewane, Managing Director of Financial Derivatives, provided a sobering assessment of the telecom industry’s situation, describing it as being in an “intensive care unit.”

Rewane noted that the sector is facing a crisis, with operators forced to make tough decisions, such as limiting service provision to certain high-revenue areas.

Nairametrics reported that some telecom companies have already begun implementing “load shedding” in various regions to reduce operating costs. This strategy prioritizes areas with higher revenue potential, resulting in better network quality in those locations while other regions experience significant service disruptions.

Ogunbanjo strongly criticized this approach, likening it to the electricity rationing system seen in some parts of the country.

“Load shedding in the telecom sector would be devastating, particularly for critical sectors like banking, education, and healthcare, which all rely heavily on telecom services,” Ogunbanjo warned. “Businesses, virtual meetings, and essential services would be severely impacted if telecom services were to be rationed.”

He added that subscribers would hold telecom operators accountable for any disruptions, which could have far-reaching consequences for the Nigerian economy.

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Ogunbanjo’s call for a tariff hike comes amid mounting pressure on both telecom operators and regulators to find a solution that balances operational sustainability with the needs of subscribers.

Experts in the telecom and economic sectors have echoed Ogunbanjo’s concerns, stressing the need for immediate intervention to prevent further deterioration of services.

Financial analysts argue that without a price adjustment, the telecom industry’s capacity to invest in infrastructure and maintain service quality will be severely limited, deepening the crisis.

The debate over the 10% tariff hike now rests with the NCC, which must weigh the needs of operators against the potential backlash from subscribers already grappling with rising living costs.

However, with growing calls for action and warnings of a looming telecom crisis, stakeholders are urging swift decision-making to protect the future of Nigeria’s telecom industry.