The Federal Government has defended its decision to approve a 50% increase in telecom service tariffs, despite mounting criticism from advocacy groups, subscribers, and legal challenges. Speaking before lawmakers on Tuesday, Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, explained that the tariff hike was necessitated by rising economic pressures, including inflation and increased costs of imported goods.
Minister Tijani highlighted the challenging economic environment faced by telecom operators:
• Inflationary Pressures: “Rising inflation and operational costs are the reasons for the recent tariff increase,” he said.
• Investment Challenges: He noted that telecom operators traditionally focus investments in areas with high economic activity. Using night-time satellite data, these companies determine locations with visible electricity and economic activity, which influences their infrastructure rollout.
• National Fibre Project: The Minister referenced the government’s 90,000-kilometre fibre project, emphasizing its role in addressing infrastructure gaps and ensuring a more equitable distribution of telecom services.
The tariff increase has drawn significant backlash from the National Association of Telecoms Subscribers (NATCOMS) and the Socio-Economic Rights and Accountability Project (SERAP), both of which are threatening legal action:
• NATCOMS Position:
• NATCOMS President, Adeolu Ogunbanjo, described the hike as excessive and “burdensome.”
• The group is seeking to engage the telecom regulator, Nigerian Communications Commission (NCC), this week to negotiate a rollback to a 10% increase.
• Failing a resolution, NATCOMS intends to proceed with legal action next week.
• SERAP’s Ultimatum:
• SERAP issued a 48-hour deadline to the government and telecom operators to reverse the hike, calling it “unlawful.”
• The organization posted on X (formerly Twitter): “The Tinubu administration and telcos must immediately reverse the unlawful increase in calls and data costs. We’ll see in court if the 50% tariff hike is not reversed within 48 hours.”
Subscribers have also expressed frustration, arguing that the increase disproportionately affects low-income Nigerians who rely on affordable telecom services for work, education, and communication.
The Nigerian Communications Commission (NCC) approved the tariff adjustment, citing the need to address the operational challenges faced by telecom operators. Key points from its statement include:
1. A Measured Response: The 50% increase is significantly lower than the 100% adjustment initially proposed by some operators.
2. First Tariff Adjustment in 10 Years: The NCC emphasized that the last tariff revision occurred in 2013, and the current move is aimed at balancing consumer interests with industry sustainability.
3. Consumer Protections: Operators are mandated to implement the adjustments transparently and fairly.
4. Support for Local Ecosystems: The adjustment also aims to sustain Indigenous vendors and suppliers within the telecom ecosystem.
The hike has sparked widespread debate:
• For Subscribers: Many Nigerians are concerned about the affordability of essential communication services, especially for low-income households.
• For Operators: Telecom companies argue the increase is necessary to stay profitable amidst rising costs and a volatile exchange rate.
• Economic Context: The rising cost of living, inflation, and reduced purchasing power have heightened public sensitivity to price increases.
Economic analysts suggest that while the tariff hike is a difficult but necessary move to sustain the industry, the timing and magnitude may worsen the financial burden on households.
As the debate unfolds, the outcome of legal challenges from SERAP and NATCOMS will likely shape the future of telecom pricing in Nigeria. The Federal Government and NCC face the challenge of ensuring a fair balance between industry sustainability and consumer protection in a challenging economic climate.
