Unexpected Spike in Telephone Tariffs: What It Means for Consumers

Telephone charges will shortly rise as the Federal Government approves telecom companies' request.

Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, conveyed the consent yesterday during a meeting with Mobile Network Operators (MNOs) CEOs.

The new rate regime is expected to begin next month, with the Nigerian Communications Commission (NCC), the sector's regulator, planning to announce rules by the end of the month.
Telephone tariffs were last raised nearly a decade ago.

Since 2022, operators' requests for clearance to hike tariffs have been louder. In recent weeks, MTN Nigeria CEO Karl Toriola and Airtel Nigeria CEO Dinesh Balsingh directly advocated for pricing increases to "save the industry".

Tijani stated at yesterday's meeting that the approval being reviewed by the Federal Government through the NCC was critical to stimulating growth and investment in the sector. The MNOs have been asking for at least a 100% rate increase, but the government announced yesterday that it will not accept it.

Tijani argued that the increase would not be 100%, as requested by the operators.
Dr. Aminu Wada Maida, the NCC's Executive Vice Chairman (EVC), attended the meeting.

According to him, conversations and engagements were ongoing on the subject, and that "very soon, the NCC would approve the new tariffs and make them public to Nigerians."

"You've seen in recent weeks that some of these firms have been agitating for tariff increases. They are proposing a 100 percent tariff rise.

"However, it will not be by 100%. We are still reviewing the study, and NCC will provide a clear guidance on how we will proceed.

"As a government, we want to strike a balance that protects our workers while also ensuring that big firms continue to spend considerably.

"We need to ensure that as a sector, we get our acts together, ensure that from the regulation side, we put the right regulations in place that can ensure the growth of this sector."
On advances in the telecom sector, the minister stated that the Federal Government would no longer rely solely on private enterprises for infrastructure spending.

He stated, "As a country, we have historically left these investments in the hands of the private sector. They often invest in areas where they can expect short- to medium-term gains.

"We do not want this discourse to be solely about tariff increases. The current global focus is on meaningful connectivity.You wish to have access to really high-quality service.

"A part of it is that the consumers may not be aware of the investment that needs to go into the infrastructure that is used to deliver these services."
He stated that it was now necessary for MNOs to comply with directives to simplify their tariff templates so that Nigerians could see prices per minute for voice calls, SMS, and megabytes of data.

"We are transitioning away from a regime in which you will have a main rate. Then you will receive a bonus at a different rate.

"It makes it often complicated and difficult for Nigerians to actually understand what they are being charged for."So, we spent a lot of time over the last year looking at data, and there is concern that the MNOs are taking our data."
Mr. Dinesh Balsingh, CEO of Airtel Nigeria, justified the proposal for pricing increases by citing the operators' ability to provide superior connection and create digital inclusivity.

Balsingh's spokesman, Mr. Femi Adeniran, explained that the proposed tariff adjustments are necessary to ensure the sector's long-term sustainability and provide significant benefits to consumers.
ATCON President Tony Emoekpere praised the anticipated clearance for MNOs to hike tariffs as a positive move.

According to him, the decision came after a protracted period of tariffs remaining at the same level despite macroeconomic headwinds.

He stated, "We are following the news as it unfolds. If tariff increases are approved, that is a positive development.

"Remember that expenditures have increased by 400% to 500%. As a result, the approval margin is critical to the industry's health.

When asked if anything less than the MNOs' full demand would satisfy, Emoekpere stated, "The main challenge is that this issue has been left ignored for too long. That's why a 100% increase seems like a lot. Given the current situation, it is not as significant as it appears. However, we shall wait and see what is suggested.
Gbolahan Awonuga, Executive Secretary of the Association of Licensed Telecom Companies of Nigeria (ALTON), stated the permission came after roughly a decade of a stagnating telecom rate regime.

Echoing Emoekpere, the ALTON CEO stated that the percentage rise granted by the Federal Government is also critical for the health of a sick industry.

Awonuga stated, "We are thrilled with the permission. However, the government's approved percentage increment is currently unknown.However, this is a positive development since we cannot afford to see the industry return to the days of NITEL. We applaud the development. Let's start someplace to save the industry."

The NCC's EVC noted that yesterday's meeting with essential stakeholders was focused on the industry's sustainability.
Maida stated, "We have considered all of these factors, and as the minister mentioned, it is unlikely that we will approve a 100% tariff increase."

"I understand that Nigerians are anxious to learn the exact proportion approved. We are still working on certain stakeholder engagements, but you should hear from us within the next week or two.
According to Maida, the NCC has implemented a number of methods and instruments throughout the years, including amending its quality of service regulations to ensure compliance with service quality standards.

Sina Bilesanmi, President of the Association of Telephone, Cable TV, and Internet Subscribers of Nigeria (ATCIS-Nigeria), who has continuously opposed the push for higher end-user tariffs, stated that the association's position will be announced later.

"We plan to meet with the Nigerian Communications Commission (NCC) tomorrow (today). The meeting today (yesterday) included the MNOs or their COOs, the NCC, and the minister. So, we're meeting with the NCC tomorrow (today)," he stated over the telephone.
Deola Ogunbanjo, President of Nigeria's National Association of Telecom Subscribers (NATCOMS), could not be reached yesterday.

Calls to the phone number were not picked up.

However, in prior responses to the pricing hike discussion, Ogunbanjo, who first backed a small increase that would not disenfranchise network customers, eventually shifted his attitude to outright rejection.