The Nigerian Communications Commission (NCC) has yet to approve new tariffs, according to telecommunication operators.
This comes amid reports suggesting the regulator may sanction an increase in the price of calls, SMS, and data by an undisclosed percentage in January 2025.
This is in response to news that the regulator may approve an upward review in the price of calls, SMS, and data by an undisclosed percentage in January 2025. While welcoming the idea of a tariff review, industry operators have denied knowledge of any final decision on their decade-old tariff hike request.
A chief executive officer of a tier-one telecom company told BusinessDay, “Although no tariff increase has been approved, we believe it may happen soon.” Gbenga Adebayo, chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), emphasised that the industry is in a critical situation and that a review is imperative.
He noted that while he is unaware of any breakthrough with the NCC, an increase would be a good development when it happens. “By this, the Government could rescue the sector from imminent collapse. It is the best for the progress of the industry and our digital economy.”
Reuben Muoka, NCC’s director of public affairs, stated that any news of a hike is speculative. “I am not sure anyone from the commission can speak to that. Nobody has any final say on it yet. It is speculative at the time,” he said.
However, the stock price of MTN Nigeria Communications Plc (MTN Nigeria), the nation’s largest mobile network operator, has reacted positively gaining N388.42 billion since news of the upward review started making rounds.
Read also: NCC approves disconnection of exchange telecoms from MTN over debt
MTN, with 80.38 million subscribers, closed trading with a market cap of N3.69 trillion on Friday, 20 December 2024. By Monday, this rose to N3.74 trillion, closing at N4.07 trillion on Friday. Its share price followed suit, climbing from N175.50 to N178 and N194.
Airtel Africa Plc, with 54.45 million subscribers, experienced no movement in its stock price over the same period, staying flat at N2,156.90 per share with a market cap of N8.11 trillion. It is important to note that the telco is in the middle of a share buyback programme.
Telecom operators have been lobbying for an upward review of telecom tariffs for 10 years, citing harsh operating conditions. In 2023, the sector grappled with foreign exchange losses, with MTN and Airtel recording a combined N1.29 trillion in FX losses.
MTN reported a N514.93 billion loss for the nine months ending October 2024, despite a 33.7 percent growth in service revenue to N2.37 trillion. Similarly, Airtel’s revenue fell by 46.9 percent to $755 million during the same period.
Karl Toriola, CEO of MTN Nigeria, described the sector as being in crisis. “Investments will not continue to come. No one will put in a dollar and continue to get 66 cents… We are in a big crisis,” he said.
MTN and Airtel have cut back on network infrastructure investments to survive and at least keep their lights on. Between January and September 2024, MTN’s core capital expenditure dropped 27.79 percent to N217.64 billion, while Airtel’s capex fell by 36.59 percent to $149 million. These cutbacks have worsened network quality.
To adjust, operators have advocated for increased tariff prices, especially as their average revenue per user (ARPU) continues to fall. The ARPU of telecom companies declined by 40.87 percent to $1.85 in the quarter ending September 2024, compared to $3.12 in the same period in 2023.
“There should be no delusion; if the tariff doesn’t go up, we will shut down,” Toriola of MTNN emphasised. After months of lobbying, Bosun Tijani, the minister of Communications, Innovation and Digital Economy, finally acknowledged the need for price adjustments, stating, “We think there may be a need for that” in a December 20 interview on Arise TV.
However, there isn’t any clear communication from the ministry or regulator with operators waiting on a decision. Also, the likely percentage increase remains unclear, but a 2022 proposal by telcos requested a 40 percent hike.
Despite this uncertainty, Starlink recently increased its standard subscription prices to N75,000, weeks after a 97.37 percent hike to the same amount. The NCC faulted the initial increase, stating it had not approved the hike, forcing Starlink to revert to its old price of N38,000.
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