With the Federal Government reversing the recent hike in data tariffs by both MTN Nigeria and Airtel, both telecoms operators will likely experience a dip in their income as a result of rising costs of operations. This year alone, pump price of diesel has risen by as much as 85 percent. Added to cost outlay for security of base stations among other facilities, telecoms operators, like other businesses in the country, are experiencing significant increase in their operating expenditure.
Industry regulator, the Nigerian Communications Commission (NCC), reversed the price hikes without recourse to it as stipulated in its regulations. The hikes, as much as 10 percent, were mainly for data services by the two operators. NCC’s Director, Public Affairs, Reuben Muoka, made this known in a statement on Wednesday in Abuja.
Muoka said that the consideration for 10 percent approval was in line with the mandate of the commission as provided by the Nigerian Communications Act. He also said that it was in line with other regulations and guidelines, as this was within the provisions of existing price floor and price cap as determined for the industry. He said that the decision was taken after a critical and realistic review, analysis of the operating environment and the current business climate in Nigeria, as it affects all sectors of the economy.
“The tariff adjustment was proposed and provisionally approved by the (NCC) management, pending the final approval of the Board of the Commission. However, in the end, it did not have the approval of the Board of the Commission. As a result, it is reversed,” he said.
Isa Pantami, Minister of Communications and Digital Economy, says that his priority was to protect the citizens and ensure justice to all stakeholders involved, Muoka quoted the minister to have said. In view of the above, he said the Commission would carry out further consultations with all industry stakeholders on the best approaches to protect and uphold the interest of both the consumers and the service providers.
In 2021, MTN Nigeria declared a profit after tax of ₦298.7billion, up 45.5 percent from ₦205.2billion in 2020. It grossed ₦1.654trillion, up from ₦1.346 trillion in 2020. However, rising cost and increasingly difficult operating terrain may negatively impact earnings.
The dip in earnings may not be obviated even with the growing tele density, which currently stands at 203.5 million subscribers’ base.
Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.
