…As telcos await green light on new tariff
Karl Toriola, MTN Nigeria’s chief executive officer, is confident that the telecommunication company will meet the three-month Nigerian Communications Commission (NCC)’s service quality deadline.
This is after the NCC tied its 50 percent tariff hike to improved network quality, “improved services and connectivity, including better network quality, enhanced customer service, and greater coverage.”
“We will now be measured on quality of service,” Toriola explained on Tuesday. He noted that the tariff increase will unlock more funds for the telco, which has been battling with high operating costs.
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“While we make N2.4 trillion in revenue, our commission on sales and operating expenditure takes more than 60 percent off.”
He stated that when interest payments on loans, statutory licenses, and other obligations are added, the telco is left with no cash to pay its bills.
“We are spending 120 percent of what we earn,” he said. Outside of these costs, the MTN boss explained that other hidden costs like fibre cuts, pegged at 1000 per month, and an economic slump that increased inflation to 34.8 percent in December 2024 have also exacerbated the telcos’ cost of operations.
“Based on our projections, there would be more cash flow, meaning additional funding to expand and provide quality service, redundancy on our network and better customer experience,” Toriola explained.
Dinesh Balsingh, CEO of Airtel Nigeria, also shares Toriola’s sentiment, saying, “The price increase will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers.”
Despite its potential to unlock more funding for telcos, industry insiders note that the NCC has yet to approve the new tariff plans despite the announcement of approval.
“We don’t have the price increase in our hands because, even though it has been announced and based on Section 108, every single product that you want to increase its price has to go to the NCC, be iterated, and approved,” one source said, noting that telcos expect the regulator to respond this week.
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The proposed tariff increase will raise the floor price (minimum acceptable price) of calls to N9.6 per minute from N6.40, the cost of SMS to N6 from N4, and the cost of 1GB of data to N431.25 from N287.5. The average price of calls will rise to N16.5 per minute from N11, unlocking at least N6.59 trillion in revenues and N244.99 billion ($160 million) in network investments for telcos.
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