• Thursday, May 23, 2024
businessday logo

BusinessDay

Telcos lament 45 charges, say sector can’t be palliative for economic woes

Telcos renew push for first general tariff hike in 11 years

Association of Licensed Telecom Operators of Nigeria (ALTON) has lamented the existence of 45 charges and levies, adding that telecoms sector should not be used as palliative to solve economic woes.

Gbenga Adebayo, highlighted the existence of over 45 associated charges and levies on operators, despite the supposed removal of right of way costs, in his address at the Groupe Spécial Mobile Association (GSMA) digital economy report launch which took place in Abuja.

But Bosun Tijani, the minister of communications, innovation, and digital economy, In his speech, firmly rejected tariff hikes, which he said “ are not the panacea for industry woes”.

He however, emphasised the need for a comprehensive approach, rejecting the notion that increasing tariffs alone could resolve the challenges, which experts believe could add about 15 million new internet users, by 2028.

The Global System for Mobile Communications Association (GSMA) has highlighted the potential for significant growth in Nigeria’s telecommunications sector by 15 million internet users in Nigeria by 2028 by implementing an improved policy environment with only 29 percent of Nigerians regularly accessing mobile internet.

“We have to deepen and address so many of these things,” he asserted, highlighting the multifaceted nature of the sector’s predicament.

He further noted that the government and telecom operators must collaborate closely to enact policies that nurture investment and growth pointing fingers at both government policies and industry associations to chart a path forward.

“The issues of how investors perceive our sector require intentional messaging and policies,” he stressed, lamenting the lack of tangible progress despite ongoing discussions.

According to Adebayo, the telecom industry faces numerous challenges that hinder its growth and development. He emphasized the need for sustainable investment, effective regulation, and a conducive business environment to drive progress.

The GSMA digital report, launched in Abuja highlights the telecom’s 8% contribution to Nigeria’s GDP and 13.5% when considering the broader ICT ecosystem.

The report also highlights the significant challenges plaguing the industry including investment challenges, right of way, multiple taxation, and regulation.

Adebayo highlighted the existence of over 45 associated charges and levies on operators, despite the supposed removal of right of way costs.

He lamented that this has created an unfavorable business environment, discouraging investment and hindering the industry’s ability to deliver quality services.

He also stressed that regulatory interference and the lack of independence for the regulator exacerbate the problem.

According to him, “The price review should be a simple regulatory process. The public debate this has gained makes it appear the industry is insensitive to people’s concern. While the government tries to provide incentives for the public on account of ongoing macroeconomic headwinds, the telecoms sector should not be used as a palliative to solve the people’s problem.

“We must price right to sustain the industry; we must price right to have the right investment,” Adebayo said.

He noted that the industry must be allowed to operate sustainably, with the right investment and regulation, to deliver quality services and drive economic progress.

He also called for encouragement of stakeholders, including policymakers, regulators, and operators, to work together to address the challenges facing the industry in order to drive economic growth, and fulfill its potential as a critical sector in Nigeria’s economy.