By Niyi Jacobs
The Nigerian Communications Commission (NCC) has approved a 50% increase in telecom service tariffs, sparking widespread outrage among subscribers and industry stakeholders. This decision, announced on Monday, follows sustained lobbying by Mobile Network Operators (MNOs), who had initially proposed a 100% hike to cope with rising operational costs. While the NCC capped the increase at 50%, the decision has been met with resistance from various quarters, with Nigerians vowing to challenge the move in court.
Under the new regime, the cost of calls will rise from ₦11 to ₦16.5 per minute, SMS charges will increase from ₦4 to ₦6, and 1GB of data will now cost ₦431.25. These adjustments mark a significant departure from the 2013 price template, the last time telecom tariffs were reviewed.
The implications of this hike are far-reaching:
1. Increased Cost of Living: Already grappling with high fuel prices, transportation costs, and soaring food inflation (reported at 38.90% in December 2024), Nigerians are set to face an additional financial burden.
2. Economic Multiplier Effect: Small and medium-sized enterprises (SMEs), reliant on affordable telecom services, may have to raise their prices, passing the costs onto consumers. This will further strain household budgets and dampen consumer spending.
3. POS Operators at Risk: Members of the Association of Mobile Money & Bank Agents in Nigeria (AMMBAN) have hinted at possible increases in their service charges. With their operations heavily dependent on data services, these agents are among the hardest hit.
The National Association of Telecoms Subscribers (NATCOMS) has announced plans to drag the federal government to court, citing the disproportionate impact of the tariff hike on impoverished Nigerians. Adeolu Ogunbanjo, the association’s president, condemned the move, stating that subscribers had only agreed to a modest 5–10% hike.
“We’ve painfully agreed to a telecom tariff hike. We know we are going to pay more, but not 50%. This is unacceptable,” Ogunbanjo told Daily Post. “Anything beyond 10%, we are going to court.”
Ogunbanjo further criticized the Minister of Communications and Digital Economy, Bosun Tijani, for endorsing a policy that he argues will exacerbate poverty. He called for alternative solutions, such as encouraging telcos to raise funds through the capital market instead of burdening subscribers.
Telecom operators, on the other hand, have argued that the tariff hike is necessary to sustain their operations. Rising costs of diesel, equipment, and foreign exchange fluctuations have significantly increased their overheads. Without the increase, many operators warn they may be forced to shut down operations, a scenario that could cripple Nigeria’s connectivity infrastructure.
Despite this, public sentiment remains largely unsympathetic. Critics argue that telecom companies, many of which report substantial profits, should prioritize efficiency and explore innovative cost-saving measures rather than transferring their financial challenges to consumers.
A Threat to Financial Inclusion
The tariff hike poses a direct threat to Nigeria’s financial inclusion goals. Mobile money services, a cornerstone of the country’s efforts to extend financial services to underserved populations, rely heavily on affordable telecom infrastructure.
Ogungbayi Ganiyu, National Public Relations Officer of AMMBAN, expressed concern over the potential ripple effects on mobile money operations. While some POS operators may absorb the increased costs, others may have no choice but to raise their service fees, making financial transactions more expensive for rural and low-income communities.
The tariff increase also raises questions about the federal government’s policy direction under President Bola Ahmed Tinubu. Critics argue that the administration’s economic policies, including fuel subsidy removal and currency devaluation, have disproportionately impacted the poor.
The telecom tariff hike is seen as yet another blow to the average Nigerian, further eroding public trust in the government’s ability to balance fiscal reforms with social equity. The timing of the increase, amid widespread economic hardship, has fueled perceptions that the government is out of touch with the realities faced by ordinary citizens.
Nigeria’s telecom sector has been a bright spot in the economy, contributing significantly to GDP growth and job creation. However, the sector is not immune to the broader economic challenges facing the country, including inflation, exchange rate volatility, and declining foreign direct investment.
Telecom operators argue that the tariff hike is essential to maintaining network quality and expanding coverage, particularly in underserved areas. However, the question remains whether this increase will achieve these goals or merely pad the profit margins of already lucrative companies.
The new tariff regime is set to take effect in February 2025. As stakeholders brace for its implementation, the outcome of the legal challenge by NATCOMS will be closely watched. A court ruling in favor of subscribers could force a revision of the tariff policy and set a precedent for greater consumer protection in the telecom sector.
For now, the focus is on how Nigerians will adapt to this new reality. Businesses may need to rethink their strategies, consumers may need to cut back on usage, and policymakers may need to grapple with the unintended consequences of their decisions.
The approval of a 50% telecom tariff hike has set the stage for a contentious battle between subscribers, operators, and the federal government. While the financial pressures on telecom companies are undeniable, the decision to pass these costs onto consumers risks deepening poverty and undermining economic recovery efforts.
As Nigeria navigates this challenging period, it is crucial for stakeholders to find a balance that supports the sustainability of the telecom sector while safeguarding the interests of consumers. Whether through legal action, policy adjustments, or industry innovation, the path forward will require collective effort and compromise.
