*The Nigerian Communications Commission鈥檚 core mandate is to protect telecoms consumers and it acknowledges the telecoms service providers鈥� agitation for upward tariff reviews. Yet, the regulatory Commission has maintained the Mobile Network Operators should focus on improving service quality and explore other measures rather than tariff hikes for subscribers in the digital ecosystem

Gbenga Kayode | 绿帽献妻

The telecoms companies’ (Telcos) renewed calls for tariff increments have continued to generate reactions among industry stakeholders, including consumers, Mobile Network Operators (MNOs), Association of Telecommunications Companies of Nigeria (ATCON), and Association of Licensed Telecoms Operators of Nigeria (ALTON) in the ecosystem.

绿帽献妻 reports the Nigerian Communications Commission (NCC), as the country鈥檚 foremost telecoms sector regulator, has affirmed it duly acknowledged the recurring demands for upward tariff reviews by MNOs, especially under the auspices of ATCON and ALTON, citing high operational costs as the fundamental reason for their proposed tariff hikes in Internet data, voice calls, and Short Message Services (SMS) respectively.

The Commission, however, has equally said that in line with international best practice and established regulatory procedures in Nigeria, it will continue to ensure that requisite regulatory activities are guided by regular cost-based and empirical studies to determine appropriate cost (upper and floor price) within which service providers are allowed to charge their subscribers for services delivered.

Telecoms consumers

It should be noted that since his assumption of office also, Dr. Aminu Maida, Executive Vice-Chairman and Chief Executive Officer (EVC/CEO) of NCC, has clearly stated that the regulator, under his leadership, would continue to encourage the network operators to seek 鈥渋nnovative ways to sustain their businesses鈥� while exploring a lasting solution to their requests within the telecoms ecosystem.

Dr. Maida鈥檚 leadership vision for NCC is apparently focused on advancing collaborations with other critical sectors of the Nigerian economy to drive innovation, efficiency, Quality of Service (QoS) and consumers鈥� Quality of Experience (QoE) in the country.

Therefore, with the fresh parameters for network operators in its QoS Regulations 2024, the NCC recently disclosed that it aims to achieve a 50 percent QoS target by the end of 2024, besides other ambitious goals, including boosting Broadband deployment and penetration to 70 percent by 2025.

According to the regulator, the Quality of Service Regulations for telecoms companies was designed for immediate implementation to achieve results.

The Commission disclosed the QoS Regulations 2024 specifically, set measurable parameters for the different network segments of the Telcos, covering 2G, 3G, and 4G networks respectively in Nigeria.

The regulations as well focus on stipulated parameters, including Drop Call Rates, Call Setup Success Rate, and Traffic Congestion, among others.

According to the telecoms industry regulator, Telcos鈥� failure to meet such specified parameters would attract a N5 million fine, as well as N500,000 daily penalty for each infraction in the telecoms ecosystem.

Why MNOs鈥� persistent push for telecoms tariff hikes

Recently, the leadership of ATCON and ALTON, among other stakeholders, have further pushed their argument to justify NCC鈥檚 approval for their proposal to jack up costs of telecoms services by noting that the Nigerian telecoms sector 鈥渕ay not survive鈥�, if the Nigerian Communications Commission, fails to approve a new tariff regime.

The telecoms service providers as well contended that rising operational costs, weakening value of the Naira, and increasing the prices of energy, including diesel and power supply, and infrastructure maintenance have severely affected telecoms companies.

Other major factors cited include incessant vandalism, fibre cuts, and theft of equipment already cost telecoms operators billions of Naira to replace, besides the service disruptions the concerns that result therefrom.

In regard to MNOs鈥� repeated agitations for tariff increments, industry observers have noted the NCC appears to have been sandwiched between the need to activate its core mandate of protecting telecoms consumers from undue market exploitation, and approving MNOs鈥� proposals for tariff hikes in view of the current socio-economic realities in the West African country.

We must return the industry to profitability, says Toriola, MTN CEO

As regards industry performance, in the company鈥檚 first half (H1, 2024) financial report, MTN Nigeria Communications Plc reported a Loss After Tax (LAT) of N519. 1 billion, reportedly occasioned by Foreign Exchange (Forex) volatility and inflationary pressures.

Similarly, Airtel Africa, Nigeria鈥檚 second-largest telecoms operator by market share, also recorded and reported Loss After Tax of about $89 million for its full year ended March 2024, according to report.

Stressing the importance of tariff hikes in the telecoms industry, Mr. Karl Toriola, Chief Executive Officer (CEO) of MTN Nigeria, noted that it is a necessity for reform in the country鈥檚 telecommunications sector.

鈥淲e must return the industry to profitability,鈥� Toriola said, explaining the foremost network provider is currently operating on its reserves, describing the situation as “unsustainable” in the long run.

It is also argued that the cost of Internet data has remained comparatively stable in the past decade, and calls for an upward review by telecoms operators may change the status quo in the telecoms market.

Regulator 鈥榤ay approve a lesser percentage鈥� of MNOs鈥� request 鈹�ATCON

Mr. Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria, while making a submission on the market development in the country recently, maintained that the current tariff structure is no longer tenable and a price increase has become imperative to guarantee quality service delivery.

Emoekpere reportedly stated: 鈥淭hese tariffs have been frozen for such a long time and to keep them stagnant is totally unrealistic.

鈥淲e understand the fact that any price increase will have an effect but what the tariff hikes will provide is better quality of service to subscribers.鈥�

Referencing the Association鈥檚 recent talks with the telecoms regulator on calls for tariff increases, the President of ATCON affirmed the NCC rather urged telecoms operators and companies to focus on improving the quality of their services while exploring other measures rather than outright tariff hikes.

He, however, expressed confidence that an approval is imminent.

Emoekpere further noted: 鈥淚 don鈥檛 think there will be a rejection; I think the worst-case scenario is that the NCC may approve a lesser percentage of what is being requested.鈥�

Likewise, the National Association of Telecommunications Subscribers (NATCOMS), is said to have thrown its weight around the service providers in seeking approval for tariff increments for the industry regulator.

Chief Adeolu Ogunbanjo, President of NATCOMS, submitted that his organisation proposed an increase of 10 percent as a better alternative to loading shedding, a situation in which telecoms operators shut down some cell sites and rotate connectivity, affecting quality of service in some parts of Nigeria in recent times, according to report.

Ogunbanjo seems to have concurred with the ATCON President that tariff hikes would boost the Telcos鈥� profitability and, by implication would help to heighten the quality of service to consumers.

He stated: 鈥淩ather than allowing the telecoms industry to be killed, it is better we allow an increase of no more than 10% so that they can survive.鈥�

Subscribers鈥� counter-argument

However, some telecoms subscribers have contended that any increase in the costs of voice calls, SMS, and data could undermine the country鈥檚 efforts at bridging the digital divide, and achieving a broader Broadband penetration.

The Commission鈥檚 data indicated that Nigeria鈥檚 Broadband penetration currently stands at 41.56 percent as of September 2024, falling short of the ambitious 70 percent target the NCC has set for 2025.

But in order to guarantee sustainability in the key sectors of the Nigerian economy, the businesses have reasoned their customers will bear the burden of increased costs as price adjustments would be effected in this regard.

鈥淚t doesn鈥檛 make sense at all, because the country is hard.

ACTIS President: No justification to propose tariff hikes in telecoms

In apparent disagreement with the position of ATCON and NATCOMS on possible approval for price increments to raise telecoms QoS in the country, the Association of Telephones, Cable TV and Internet Subscribers of Nigeria (ATCIS), has insisted that telecoms operators do not have any justification to propose any tariff hike in regard to the current economic realities.

Aside from this, amid the current economic hardship in Nigeria, several consumers have continued to complain about relatively poor Internet connectivity, reportedly linked to the Telcos鈥� demand for tariff hikes, among other issues affecting their QoE.

Sina Bilesanmi, President of ATCIS, condemned the proposed tariff hikes, especially in connection with the current economic decline in the West African country, report said.

Bilesanmi argued not only do telecoms operators not have a ground to hike the prices of Internet services, but consumers must be consulted before any decision could be made.

He, however, said telecoms operators should call for a proper stakeholder meeting, where details of the proposed tariff hikes could be discussed with consumers for mutual understanding.

The ACTIS Chief averred that the Telcos could not do it alone, stating 鈥渁ll stakeholders must come to an agreement.鈥�

According to Bilasanmi, the Association is yet concerned about the effectiveness of NCC in regulating the telecoms sector of the Nigerian economy under the new administration.

鈥淏efore we used to see how active the NCC was but since this new administration resumed, NCC has been going down.

“We don鈥檛 know if the regulatory body has been compromised but we are ready to investigate the matter, expose and also sue them,鈥� he reportedly noted.

NCC鈥檚 focus on advocating improved service quality and QoE

Amid the continued agitations by telecoms consumers for increased service tariffs over time, the NCC has stated that 鈥渁ny cost determined, as an outcome of such transparent studies is fair enough as to enhance healthy competition among operators, provide wider choices for the subscribers, as well as ensure sustainability of the Nigerian telecoms industry.鈥�

The Commission has urged telecoms operators to rather focus on improving the quality of their services towards evolving a healthier, more trustworthy, and consumer-centric telecoms space environment in Nigeria, and explore other innovative measures rather than tariff hikes for consumers.

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