Nigerian telecom operators have raised alarms over the severe financial challenges they currently face, suggesting that these difficulties could compel them to adopt a load-shedding strategy similar to that of the power sector.
This move would result in the selective provision of telecom services across the country, sparking concerns about the potential impact on subscribers and related industries.
The Chairman of the Association of Licensed Telecom Operators in Nigeria (ALTON), Engr. Gbenga Adebayo, shared these concerns during an event organized by the Financial Derivatives Company titled “Telecom Industry 2.0: The Next Investment Frontier in Nigeria.”
Adebayo explained that the economic woes in Nigeria have severely impacted telecom operators, potentially limiting their ability to service all their facilities simultaneously.
“The point at which telcos have found themselves at the moment is where they could only service a part of their facilities at a time, meaning that the area they are able to service will enjoy better services, while other areas not so lucky at the time may just have to bear epileptic services,” Adebayo said.
NCC Dismisses Threats
Reacting swiftly to these developments, a spokesperson for the Nigerian Communications Commission (NCC) dismissed the operators’ threats as a tactic to pressure the regulatory body into approving tariff hikes.
“We agree that the operating environment is difficult, but it is not only for the telcos; every other sector is going through the same hard times.
If the operators say they cannot provide quality services because of economic conditions, it is not strange.
It is their strategy,” a source at the NCC said. “We cannot be arm-twisted by subtle threats.”
Price Increase: A Necessity?
Joining the discourse, MTN Nigeria CEO, Mr. Carl Toriola, emphasized the urgent need for price adjustments in the telecom sector.
He highlighted that the sustainability challenges facing telcos threaten the survival of the industry, which has otherwise thrived for over two decades since its liberalization.
“Price increase has become imperative; it is now an absolute necessity because the sector is in an intensive care unit, ICU, and needs urgent rescue to avoid total collapse,” Toriola remarked.
“There’s no way under the surface of the earth, in the kind of inflationary environment and forex devaluation that we’ve seen, that an industry can maintain prices the same for 11 years.”
Subscribers to Hold NCC Accountable
In response to the ongoing situation, the President of the National Association of Telecom Subscribers (NATCOMS), Chief Deolu Ogubanjo, warned that subscribers would hold the NCC accountable if the telecom industry collapses due to inadequate regulatory actions.
“Telecom has become a legacy with the Nigerian society now because telephone is life.
In several stakeholder meetings, we have advocated that the telcos should be allowed a decent level of tariff pricing to tally with the high operating cost, and the regulator is not doing anything about it,” Ogubanjo stated.
“If anything happens to the telecom sector today, the banking, education, health, and entertainment sectors, among others, will go with it.”
Calls for a Sustainable Pricing Model
Engr. Adebayo further reiterated the need for a pricing model that reflects the operational costs in the telecom sector.
He criticized the current pricing regime for being static and unresponsive to economic realities, urging the NCC to conduct periodic cost-based studies to determine appropriate tariffs.
“The pricing system in our sector is such that we cannot navigate even within the tariff band.
Our call is that the NCC should periodically commission cost-based studies to determine what tariff we should charge,” Adebayo explained.
The Need for Regulatory Independence
In a joint statement with the Association of Telecom Companies of Nigeria (ATCON), the telcos called on the government to address the sector’s challenges, including infrastructure deficits, multiple taxation, and regulatory constraints.
They also stressed the importance of maintaining the NCC’s regulatory independence to inspire investor confidence and attract foreign direct investment.
Stakeholders Support Telcos’ Call for Pricing Flexibility
Telecom industry stakeholders and analysts have thrown their weight behind the telcos’ call for pricing flexibility, arguing that it is crucial for the sector’s sustainability.
Dr. Falade Muritala Adesola, a senior lecturer at Trinity University, emphasized the need for a transparent and collaborative approach to tariff adjustments.
“The current pricing window, sanctioned by regulators, is a foundation, but the industry needs greater flexibility to navigate cost fluctuations while ensuring service quality and accessibility remain uncompromised,”
Dr. Adesola said. “The clamour for cost-reflective tariffs is not merely about short-term gains but a strategic imperative to sustain the sector’s growth trajectory.”
