NAIRAMETRICS
Telecommunications operators in Nigeria are preparing to increase tariffs for voice and data services to reflect the current economic conditions in the country.
Nairametrics learnt that a cost-based study conducted by KPMG, the consultant hired by the Nigerian Communications Commission (NCC), is nearing completion.
This study aims to recommend the most appropriate pricing structure for the industry based on its findings considering the economic variables of the operating environment.
Officials from various telecom companies, speaking to Nairametrics, indicated their anticipation for the NCC’s decision based on the study’s outcomes. They expect the study to recommend an increase, citing several industry indicators that point towards the need for higher tariffs.
According to these officials, adjusting prices upwards is essential for sustaining the telecom business amidst current economic challenges, such as the high cost of diesel and the significant depreciation of the naira against the dollar, which affects equipment imports.
A matter of urgency
An official from the telecom sector, who preferred to remain anonymous, expressed to Nairametrics that the planned price increase has become critically urgent. Delaying it further, he warned, could threaten the viability of some telecom businesses.
The official highlighted that with the majority of their costs in dollars and earnings in Naira, sustainability is impossible without a tariff revision, especially as equipment importation becomes increasingly costly.
- “We are earning in Naira and about 80% of our costs are in dollars. There’s no way we can have a sustainable business without increasing our prices with the value of the Nigerian currency falling every day.
- “Already, it’s becoming very difficult to import equipment as costs continue to increase. So, increasing tariffs is no longer a matter of choice. It is a matter of urgency because a further delay will be at the detriment of the industry,” he said.
Another industry source, who also spoke in confidence with Nairametrics said:
- “You know we are a heavily regulated industry. While the increment has been due since 2022 when the cost of diesel that powers our base stations jumped to N800 per litre, we had demanded for an increment, but the regulator said no.
- “But they have also realised that the survival of the industry is at stake and that was why the cost-based study was commissioned. What we are waiting for now is the report of the study, which will give us the idea of a new floor price.”
