Why Nigeria Telecom Operators Plan To Hike Tariff

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telecoms mastTelecom operators in Nigeria want to hike tariff rates due to the rising cost of doing business. The country’s telecom regulator acknowledged the operators’ demand but said due process must be followed. The regulator also allayed Nigerians’ fear with regard to the impending tariff hike.

Last week, telecom operators in Nigeria penned a letter to the country’s telecom regulator, the Nigerian Communications Commission (NCC), demanding an increase in the costs of calls, data and SMS.

In the letter that the regulator has confirmed receipt of, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) explained that the demand became necessary owing to the growing cost of doing business. Part of the letter by ALTON said in parts:

Given the state of the economy and the circa 40% increase in the cost of doing business, we wish to request for an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.”

As expected, the development elicited widespread reactions from different sections of the Nigerian public, most of whom believe the costs of telecom services are already high as they are.

Recall that Nigeria’s inflation rate jumped to 15.92% in March, even as the prices of virtually every consumer product and commodity have skyrocketed. Further increase in the prices of telecom services would further plunge more families into economic hardship.

In the meantime, the NCC has acknowledged ALTON’s agitation and the public reactions that trailed the news. The regulator also noted that the telecom service providers may have a justifiable reason for their demand. But this notwithstanding, it was assured that tariff would not be increased until due cost appraisal processes are followed.

“For the avoidance of any doubt, and contrary to MNOs’ agitation to increase tariffs for voice and Short Messaging Services (SMS) by a certain percentage, the Commission wishes to categorically inform telecoms subscribers and allay the fears of Nigerians that no tariff increase will be effected by the operators without due regulatory approval by the Commission,” said a part of the statement by the NCC.

The statement by the NCC further explained that its regulatory activities are underpinned by periodic cost-based and empirical studies which help it to determine the appropriate costs telecom service providers should charge their customers. The regulator also stressed that the process of determining the cost is transparent, fair, and akin to international best practices

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