The Nigerian telecom sector is facing a growing crisis due to escalating operating costs, including rising fuel prices, power costs, labor, and security, as well as fluctuations in the forex market. These factors have put immense pressure on telecom businesses, prompting calls from telecom operators for tariff increases to maintain operations and ensure business sustainability.
In a recent meeting with Mobile Network Operators (MNOs), the Federal Government, through the Ministry of Communications, Innovation & Digital Economy, acknowledged these challenges and granted approval for a tariff hike, though not to the full extent requested by the operators. The new tariffs are expected to be announced by the Nigerian Communications Commission (NCC).
The telecom industry relies heavily on foreign exchange, especially for the importation of equipment and software, which has led to a mismatch between costs, which are often in US dollars, and revenues, which are generated in Naira. As a result, the operational expenses of MNOs have surged by over 300% in the past 18 to 24 months.
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With significant investments in infrastructure and network upgrades required to ensure service quality, the rising costs of diesel, energy, and security are making it difficult for operators and infrastructure companies (INFRACOs) to maintain uninterrupted services. Without tariff adjustments, this could lead to poor service quality, network downtimes, and increased job losses within the sector, which would have negative ripple effects on Nigeria’s economy.
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Telecom leaders, including Karl Toriola (MTN Nigeria), Dinesh Balsingh (Airtel Nigeria), and Obafemi Banigbe (9mobile), have called for fair tariff hikes to allow for continued investment in telecom infrastructure, improve quality of service, and support the sector’s long-term growth.
The situation calls for immediate intervention to avoid further deterioration of the telecom sector, a key driver of Nigeria’s digital economy.
By Damilola Adeleke| January 12, 2025
Adeleke Damilola (ACTION) is a versatile content writer with expertise in news writing and a seasoned media professional and broadcast specialist. Currently serving as News Editor for DNews Info, Damilola is also the CEO of the ACTION brand, committed to shaping lives and establishing a legacy of excellence for present and future generations.
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