The announcement by the Nigerian Communication Commission (NCC) that it has given approval to telcos’ request to increase tariff threw the nation into frenzy. Many continue to condemn the approval, describing it as “anti-people,” while others say the hike has become inevitable; BENJAMIN UMUTEME writes.
When the federal government announced the removal of petrol subsidies, it led to a sharp increase in the price of goods and services. From May 29, 2023, the pump price of petrol moved from N197 per litre to about N1, 000 as at January 2025.
The high cost of petrol automatically meant that the costs of goods and services would also go up leading to wage increase demands.
While a school of thought has come out to condemn the reasons behind the increase which took off in February, others argue that with increases in virtually every sector, it was only a matter of time telecoms service providers take the much dreaded step like other sectors.
Granting approval
The announcement by the NCC that it was granting approval for tariff adjustment requests by network operators was met with much angst as Nigerians say the government is not sensitive to the harrowing experiences they were going through.
But in granting the approval, the NCC said it considered the prevailing market conditions.
According to the telecoms regulator, tariff rates have remained static since 2013, despite the increasing costs of operation faced by telecom operators.
“The approved adjustment is aimed at addressing the significant gap between operational costs and current tariffs while ensuring that the delivery of services to consumers is not compromised. These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefiting consumers through improved services and connectivity, including better network quality, enhanced customer service, and greater coverage.
“Recognising the concerns of the public, this decision was made after extensive consultations with key stakeholders across the public and private sectors. The NCC has prioritized striking a balance between protecting telecom 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 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. Operators are also required to educate and inform the public about the new rates while demonstrating measurable improvements in service delivery,” the Commission said.
Precarious situation
In a chat with Blueprint Weekend, an economist, Adefolarin Olamilekan, admitted that the current economic reality of Nigerians is making it difficult for them to accept the telcos tariff hike.
According to Adefolarin, the fuel subsidy removal and the poor run of the Naira against the Dollar has only further complicated the issues.
He said, “The current precarious situation is making it difficult for Nigerians to accept the hike in tariff by telcos.
“Going by the high cost of living and other subjective economic situations flowing from recent government policies, be it Fuel subsidy removal and continued naira technical devaluation.
“And talking about naira devaluation, this is a major challenge that has affected the operation of the telcos over the years. The majority of the return on investment in that sector is nothing to write about.
“However, the majority of Nigerians believe we don’t need another burden from higher tariffs as telcos are not in any way pleased with the recent upward 50% tariff across call, data and SMS messages.
“From the perspectives of telecom operators, this hike is necessary and very germane to their operational survival and providing the right and affordable service to consumers,” he said.
Economic pressures
But the Association of Licensed Telecom Operators of Nigeria (ALTON) have insisted that rising economic pressures and the need to sustain the industry were factors responsible for the 50 per cent tariff hike.
According to the ALTON, the Association increased tariff considering the significant economic challenges as they were left with no other option.
Furthermore, the ALTON noted that smaller telecoms players, burdened by high debt profiles continue to be vulnerable to the economic downturn, making network optimisation crucial.
“I urge the public to recognise that rising costs are a global economic reality, and not unique to the telecom industry.
“The industry has been grappling with escalating costs, including diesel, energy, and inflation, without a corresponding adjustment in tariffs for 12 years.
“This has resulted in unsustainable operational costs, prompting telecom operators to seek a tariff review to maintain the quality of their services.
“The 50 per cent tariff hike was approved by regulatory authorities after a thorough review of economic indices, and is in line with the provisions of the Communications Act.” ALTON Chairman, Gbenga Adebayo, said.
Increasing opposition to hike
Many Nigerians are still spoiling for a fight. According to them, the telcos should perish the thought of implementing the increase adding that any increase should not be at this very difficult time in the country.
Vowing to lead the fight, the Nigeria Labour Congress (NLC) says it is embarking on a nationwide mass rally on February 4, over the tariff hike.
In a communiqué signed by NLC President, Comrade Joe Ajaero, if the telcos fail to reverse their increment, they will be left with no choice but to escalate to a nationwide boycott of the telecom sector.
Ajaero said, “NAC-in-session totally rejected the 50% telecom tariff hike which it considers as too harsh for citizens. It therefore strongly condemns the Nigeria Communications Commission’s decision to approve the increase in telecommunications tariffs. This decision is insensitive, unjustifiable, and a direct assault on Nigerian workers and the general populace, who are already burdened by worsening economic hardship foisted on them by Policies of government which was no fault of theirs.
“To express our collective opposition to this arbitrary tariff hike, the NLC will embark on a nationwide mass rally on Tuesday, February 4, 2025.
“The rally will serve as a warning on the dangers of imposing such an unfair increase on a struggling population earning a minimum wage of only ₦70,000; a population that has suffered outrageous hikes in the price of petrol, high cost of food, hike in electricity tariff and general rising inflation.
“Should these not be heeded, the Nigeria Labour Congress will escalate its actions, including the possibility of a nationwide boycott of telecommunication services and further mass actions which may involve nationwide withdrawal of our service to resist policies that exacerbate poverty and inequality.
Hike long overdue
For Harrison Eneji, a public affairs commentator, the hike is long overdue. He told this newspaper that there have been increases in virtually every sector of the economy while the telecoms sector continues to operate at the same rate.
He insisted that it would be an act of disservice to the telecoms sector if they are not allowed to charge more for services rendered considering the increases that have occurred since 2023.
“When you consider that the price of fuel has increased, transport costs have gone up, there have been increases in wages, how then should you say there shouldn’t be an increase in tariff.
“Do the telcos operate outside of Nigeria? They go to the same market as players in other sectors do. Nigerians should have known that tariff would increase, it was only a matter of when,” he said.
In the same vein, Adefolarin who is also a development researcher, a lack of understanding of how the telecom sector works may be responsible for the opposition to the tariff hike.
For the development researcher, the country’s economic realities cannot be discountenanced.
“Sadly, the absence of a feedback mechanism as well as understanding how Nigeria’s Telco and economy work may have informed the outcry over the hike in Telco tariff.
“However, Telco consumers must understand that this is private sector led investment. And to be sincere, Telco consumers need information on the sector to be able to appreciate why the hike is necessary.
“Similarly, the Nigerians consumers are also not confident that this hike was done in good faith to bring about better service as against the poor network leading to drop calls, bad network coverage, internet service frustrations and connectivity.
“Meanwhile the issues of insecurity and vandalism in the sector are also worth raising here as factors that have been considered for hike in tariff. In addition to the fact it is over a decade that the sector raised its tariff,” he said.
Going forward
The economist noted that the government should be commended for not yielding to the telcos’ request for a 100 per cent hike in tariff.
“Consequent to the fact that a one hundred percent was the initial demand from Telco operators before it was put down to fifty percent with government intervention.
“We suggested that a gradual increase should have been allowed with twenty five percent as start.
“Telecom operators must demonstrate commitment to provide better service that is worth the payment consumers are paying for service, this we believe would help build confidence in the operators and sector wide operation.
“Stakeholders in the sector must be open to challenges they are facing beyond just the high operational expense cost and vandalism. This would provide opportunity for critical intervention and consumer support.
“Lastly, the government through the NCC must step up their oversight function and ensure Nigerians telecom consumers enjoy uninterrupted services in call, data internet connectivity and wider SMS messages delivery,” he said further.