Regulator insists on cost-based study before planned telcos’ tariff hike By Adeyemi Adepetun

Regulator insists on cost-based study before planned telcos’ tariff hike
By Adeyemi Adepetun

• Service disruption to affect security, commerce, healthcare, education

Although the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has admitted the need for a possible tariff hike in the telecoms sector, the timeline of the review remains unknown.

While the agitations by telecom companies for a hike in tariffs have been intense lately, a source within the Nigerian Communications Commission (NCC) denied any planned hike effective January 2025, stressing that a cost-based study is needed to know the current situation in the market.

The source said the 2013 hike was determined after such a study was carried out.

“There was a cost-based study, which showed the status of the market. I think KPMG was contracted for the study. The same process is expected to be followed for any price determination. The NCC cannot just wake up one day and fix the price, it is never done that way,” the source said.

What the revelation suggests is that the report, which claimed that NCC has authorised telecom operators to hike tariffs, is not true. Sources point to the absence of a board as one of the reasons the hike may not be approved forthwith.

“It’s only after board approval that the NCC will engage consultants to carry out a study on price review. After the consultants are through, then stakeholders’ engagement will take place to consider economic implications and imperatives that call for a review. Here there will be inputs from all sectors, researchers and academicians will be involved as well as legal practitioners. The telecom operators will also be involved,” a source also revealed.

Speaking to The Guardian yesterday, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said he is aware that the industry is currently working on a sustainability report, which is more encompassing.

“The sustainability report is wider and looks at specific challenges battling each segment of the sector and possible ways to overcome them. I am aware KPMG is also handling it,” he said.

While Tijani (the minister) alluded to the fact that a sustainability report is being conducted to look at challenges bedevilling the sector, Adebayo recalled that the last price review study was done 11 years ago, “imagine the prices of commodities at that time and now. So, many things have changed. It will be a misnomer for prices, whether the Floor Price or Cap Price, to remain as it were 11 years back when prices of everything in the country have gone up astronomically.”

Earlier yesterday, ALTON in a statement, reiterated the call for service shedding in some states, saying this needed to be done to keep the sector afloat. The implication of this is that there will be disruptions of voice, data, and digital services in the country.

Load shedding is a deliberate practice of shutting down some or all of a telecommunications service in a specific area to prevent the entire system from failing.

Adebayo, who signed the statement, said the Nigerian telecommunications industry was facing a critical challenge that required urgent attention.

Adebayo said the challenges operators face are not new, but they have become more acute and more threatening with this passing year.

“Rising operational costs, skyrocketing energy costs, the relentless pressure of inflation, and volatile exchange rates, amongst others have all placed an unsustainable burden on network operators.

“Despite these mounting pressures, tariffs have remained stagnant, leaving operators trapped in a financial quagmire. The resources needed to maintain, expand, and modernise our networks are simply no longer available. Without intervention, the future of this sector is at grave risk,” he stated.

Adebayo, in the statement titled: “Before the Final Call– Telecom Sector under siege,” said if nothing is done, “we might begin to see in the new year grim consequences unfolding, such as service shedding; operators may not be able to provide services in some areas and at some times of the day leaving millions disconnected, there will be significant economic fallout, because businesses will suffer from a lack of connectivity, stalling growth and innovation.

“There will also be national economic disruption where key sectors like security, commerce, healthcare, and education which rely heavily on telecoms infrastructure, will face serious disruptions.”

According to him, as we navigate this near-turbulent year for the sector, “we are confident that history will judge us right for the role we have played in an attempt to rescue this sector. Stakeholders have stood together to uphold the values and importance of telecommunications in our society.

“However, let me be clear: our work is far from over. It is not enough to have kept the sector afloat; we must now focus on securing its future. The sustainability challenges we face today are not just a passing storm—they are a clarion call for decisive action to ensure that this industry thrives for generations to come.”

The ALTON boss expressed confidence that stakeholders would come together to uphold the values and importance of telecommunications in society, adding that more needed to be done to secure the future of the industry.

Adebayo called on stakeholders to acknowledge the urgency of the situation and commit to saving the sector, warning that failure to act may jeopardise one of the most critical pillars of Nigeria’s development.

C) the guardian