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Thursday, 29 February 2024 07:31

Economic Crisis Imminent As Telecom Operators Insist On Increasing Tariffs


 

The lingering economic hardship may be compounded as telecom operators insist on increasing their tariffs. The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has been advocating for a tariff hike, citing rising operational costs.

In a recent meeting with the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, ALTON Chairman Engr. Gbenga Adebayo, argued that the tariffs set by the regulator were insufficient in light of escalating operational expenses.

He pointed out that, unlike the telecoms sector, other heavily regulated industries like power and insurance had seen price increases to reflect macroeconomic changes and the increased cost burden on operators.


While noting that the current price of services as pegged by the Nigerian Communications Commission (NCC) is unsustainable, the ALTON Chairman said: “Insurance prices have risen 200 per cent with power raising prices by over 40 per cent.

Telecommunications is the only sector that has not experienced a pricing regulatory framework review raising prices notwithstanding local and global macroeconomic realities.

“Not only has this impaired investor confidence and depleted available investible funds necessary to optimise infrastructure for improved service delivery, but it also threatens the very sustainability of our members’ operations.”

He also noted some challenges such as multiple taxation and deficiency in infrastructure. Industry players had urged the Federal Government to prioritise investment in telecoms infrastructure to aid the digital economy in the country.


They said the government should woo foreign investors into Nigeria and also encourage the local investors to put their money into infrastructural development, especially in the rural areas.

It is believed that opening up the rural areas will expand broadband and consequently improve the digital economy. Meanwhile, the telecoms operators have said they are investing in infrastructure to improve the quality of service as well as the quality of experience for all subscribers.


They said: “This is evidenced by the continued investments in network coverage and capacity to improve overall quality of service for the benefit of our esteemed customers.”

Adebayo urged the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, to collaborate with the operators to tackle the challenges affecting the industry, especially the infrastructure challenge, while urging the government to come up with policies that would make the business easy for them.

“However, as the Honourable Minister may be aware, ALTON’s members have continued to encounter strong macroeconomic headwinds, which have occasioned tough operating conditions, leading to a decline in CAPEX (domestic) and foreign direct (capital inflow) investments into the industry by 30.37 per cent and 46.9 per cent respectively between 2021 and 2022.

 

“It is ALTON’s considered view that many teething investment-impacting causal factors need to be definitively addressed to help deepen investment with the overall objective of driving increased CAPEX deployment for overall QoS improvement in line with the targets of the strategic plan to achieve 50 per cent improvement in QoS by the end of 2024,” he said.

Speaking on the damages done to telecoms infrastructure, Adebayo said there was a need to curb the acts by vandals, saying all these have been the factors that may make them increase their tariffs.

He said: “Telecommunications serves as an ‘enabler’ for all other critical infrastructure and infrastructure sectors vital to national productivity and security.

“To function optimally, telecommunications infrastructure relies on complex and interconnected support ecosystem consisting of fiber, satellites, towers, base stations, switches, data centers, etc., which need to function uninterrupted for delivery of optimal QoS.


“There have, however, been incidences of adverse cross-sectoral impact on QoS arising from damage to such infrastructure due to excavation during civil works such as road construction, deliberate/negligent vandalization and sabotage as well as theft of cable, equipment, and supplies such as diesel, generators and batteries, undue delay in issuance of site approvals for new towers/base stations as well as harassment of staff /site access denial by state/local agencies to enforce levy payments.”

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