What telcos’ phone call 50% tariff hike means for everyone
Instead of the huge tariff newly introduced, critics say telcos can opt for an Initial Public Offer (IPO) which encourages Nigerians to buy shares in their companies to raise much needed funds.
On Monday, 20 January 2025, the Mobile (NCC) approved a 50 percent increase in phone call tariffs after several requests from telecom operators citing rising operational costs and inflation rates. This was confirmed in a press statement released by the agency.
In the release, it shared that the last tariff review had been conducted in 2013 under the administration of President Goodluck Jonathan.
The NCC’s decision to approve the tariff hike this time was driven by several factors[ such as the inflation rate in Nigeria soaring to over 34.80%, significantly higher than the rate of 11 years ago.
This has led to increased operational costs for the telcos. Additionally, the removal of fuel subsidies and the devaluation of the naira have led to further strain. All the reasons why the regulator yielded some grounds to lessen the burdens companies have to face.
According to the statement yesterday signed by Reuben Muoka, the NCC’s director of public affairs, it is pursuant to the commission’s power under Section 108 of the Nigerian Communications Act, 2003 (NCA) to regulate and approve tariff rates and charges by telecommunications operators that it will be granting approval for tariff adjustment requests by Network Operators in response to prevailing market conditions.
The spokesperson says the adjustment which is capped at a maximum of 50% of current tariffs, though lower than the over 100% requested by some network operators was arrived at taking into account ongoing industry reforms that will positively influence sustainability.
More of the statement touched on having adjustments that remain within the tariff bands earlier stipulated in the 2013 NCC Cost Study and if more requests will be reviewed, it would be on a case-by-case basis as had always been the practice at the NCC whenever tariff reviews are discussed.
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See you in court
Maybe a just, sympathetic explanation was what the Nigerian Communications Commission thought it was putting out, but it is not the way critics of the move see things, particularly the National Association of Telecoms Subscribers (NATCOMS) which practically means every Nigerian household who needs to make a phone call.
Should the 50 percent tariff hike go into effect, NATCOMS through its president Deolu Ogunbanjo chatting with reporters yesterday says it will sue the Nigerian Communications Commission, especially when members like him weren’t consulted before the final move.
At most a 10 percent increment was what the picture showed the last time the association was contacted over their view which has been ignored.
Instead of the huge tariff newly introduced, Mr Ogunbanjo said that the industry operators can opt for an Initial Public Offer (IPO) for Nigerians to buy shares in their companies as a way of raising funds.
However, a situation where a whole 50 per cent is granted for a tariff hike is not cheap and it is a no! no! from us subscribers, adds the NATCOMS exec. I mean! For what we are already going through. No for us. We will challenge this in court.
What making a phone could now mean
With the new tariff hike, the average cost of phone calls is expected to rise to ₦16.5 per minute, up from ₦11.
Even when they get free airtime bonuses, this means that consumers will now pay more for every minute they spend on the phone.
It is a downside for the callers, but certainly not for the operators as the fresh tariff is expected to help them generate significant revenues. Based on last year’s data from the NCC monitoring mobile communications services as part of its mandate, the increase could result in over ₦6.74trillion revenue from calls alone.
MTN, Airtel, Glo, and 9mobile are the major players in the Nigerian telecom market, and the benefits are projected to spread around this quad although there would be main gainers.
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.
