How telecom tariff hikes may stifle online businesses, remote workers
From Adanna Nnamani, Abuja
At a time when many businesses are moving online, the Internet, for many Nigerians, is more than just a luxury or source of information, it is a means of livelihood.
From small business owners who sell on social media platforms to remote workers who rely on Zoom calls and emails, affordable data and call tariffs are essential. But with the recent 50% increase in telecom tariffs, coupled with the already harsh economic conditions of the country, many of these digital workers may now struggle to keep their businesses afloat.
Higher telecom costs mean lower profits, as they mostly rely on data to engage with customers, upload product listings and process orders.
Freelancers and remote workers also fear facing similar struggles as their jobs mostly require constant Internet access for communication, research and collaboration. If their data plans run out faster, they may have to spend more to maintain productivity, or risk delays in their work.
According to Miss Lesi Nwisagbo, a content strategist and digital inclusion advocate, “the federal government’s approval of a 50% hike in telecom service charges is a troubling development. Telecom services are a vital part of our everyday life. It powers work, education, businesses and even everyday communication. So, this decision will disrupt these critical activities and place a great financial burden on millions of Nigerians.
“A 50% increase is steep and difficult to absorb. For remote workers like myself who depend on a stable Internet for their livelihood, this hike would threaten our productivity and financial well-being. It also threatens digital inclusion, widening the gap for those already struggling to access affordable internet.
“It will also create a ripple effect in the economy and lead to increased cost of goods and services all around us. Businesses will pass on these higher costs to consumers, which will further stretch household budgets at a time when inflation is already at record levels.”
She said “a gradual or phased approach would have been a better solution because this 50% increase is excessive.”
Also lamenting the telecom tariff hike, a communications strategist, Mrs. Gift Nosa, who works remotely, said: “Honestly, this is going to be crazy because I rely on data, and now I have to buy more at a higher cost. If I used to spend N20,000 on data that lasted a month and two weeks, with this 50% tariff increase, the same N20,000 will no longer be enough. I currently get 100GB on MTN for two months, but now, that might not even last a month. That’s really bad.
“Being online is essential for my work, and now I will have to make serious cutbacks. Even airtime is becoming more expensive. I recharge, and before I know it, my call ends abruptly because my airtime runs out. Yet, salaries are not increasing; I’m still earning the same amount I was three years ago when tariffs were lower. This will affect other aspects of my life, including my ability to deliver work on time. I might even have to wait until I’m in the office to get work done, which is not ideal.”
She added: “This hike is a huge burden on us. We already pay too much for data and airtime, and increasing tariffs by 50% feels like an attempt to limit our communication. It’s frustrating, honestly.”
Similarly, Miss Obianuju James, who runs a women’s wear store on Instagram, lamented the huge sum she spends daily on data to run her business online, adding that the hike would definitely affect her profit margins as she relies heavily on data to run her business online.
“The price of data increasing is definitely going to affect my business because I run an online store. I usually spend about N3,000 in three days to post my wares and handle transactions, but now I may have to spend N4,000 to N5,000 within the same period.
“My data does not last because I post more videos than pictures and stay online for about five to six hours daily. I upload 80 to 100 videos a day, and despite trying to reduce data consumption, I cannot avoid it since I need to be active to respond quickly to customers.
“Some customers message without buying, which still consumes data. Even with network glitches, data drains as long as I’m online. Imagine buying N5,000 worth of data, and in two days, it’s exhausted. I have to keep buying more to sustain my business. I spend about 22 hours online daily, so this increase will double my expenses and affect my profit margins. It’s frustrating.”
She appealed to the government to find a means of making it easier for businesses to cope.
“Honestly, if there is a way the government can go about this and make it easier, especially for business owners, it would be very nice,” she added.
The tariff hike has sparked reactions from labour unions and consumer rights groups, many of whom argue that it places an unfair burden on Nigerians without a corresponding increase in wages.
The Nigeria Labour Congress (NLC) has stated its intention to strongly oppose the hike, including a planned nationwide mass protest on February 4.
The NLC, which described the decision as unjust, said the rally will serve as a warning to the government about the dangers of imposing such an increase on a population struggling with a minimum wage of only N70,000 and facing rising costs in petrol, food, electricity, and inflation.
The congress warned of the possibility of escalating actions, including shutting down telecommunication services and additional mass actions, if the hike is not reversed.
“The decision is insensitive, unjustifiable and a direct assault on Nigerian workers and the general populace, who are already burdened by worsening economic hardship foisted on them by policies of government, which was no fault of theirs,” it said.
Meanwhile, the National Association of Telecoms Subscribers (NATCOMS) has threatened to take legal action against the Nigerian Communications Commission (NCC) due to the commission’s failure to reverse the tariffs increase or reduce it to a more acceptable 10 per cent.
Deolu Ogunbanjo, president of NATCOMS, insisted that now is not a good time to increase telecom tariffs, warning that it could have a ripple effects on the economy.
“We now depend on telecoms for our meetings, for the banks, everybody depends on it even the education sector. A lot of things depend on it.
“A situation where a whole 50 percent is granted for tariff hike is not cheap and it is a no no from us subscribers. We will challenge this in court,” he said.
Contributing to the increasing legal battles facing the NCC, the Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit at the Federal High Court in Abuja against President Bola Tinubu’s government. The rights organisation described the tariff increase as “arbitrary, unconstitutional, unlawful, unfair and unreasonable.”
The SERAP is requesting the court to assess whether the NCC’s decision to approve the tariff hike infringes upon Nigerians’ freedom of expression and their right to access information.
However, telecom operators justify the increase, blaming it on inflation, rising operational costs, and the need to invest in better infrastructure.
Several federal government agencies and industry stakeholders, including Finance Minister Wale Edun and the Lagos Chamber of Commerce and Industry, have expressed their support for the tariff adjustment. They argue that the increase is necessary to tackle the operational challenges facing telecom operators and have called for corresponding enhancements in service quality to validate the hike.
According to Mr. Gbenga Adebayo, the chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), the tariff increase is a necessary response to the harsh economic challenges facing telecom operators.
Adebayo said: “The industry has been grappling with escalating costs, including diesel, energy and inflation, without a corresponding adjustment in tariffs for 12 years.
“This has resulted in unsustainable operational costs, prompting telecom operators to seek a tariff review to maintain the quality of their services.
“The 50 per cent tariff hike was approved by regulatory authorities after a thorough review of economic indices, and is in line with the provisions of the Communications Act.”
The ALTON boss addressed concerns regarding the constitutionality of the increase, stating that the process adhered to all necessary regulatory protocols. He assured that the tariff adjustment would ultimately be of benefit to consumers, as telecom operators would be able to improve service quality, optimize their networks and attract additional investments.
Adebayo also pointed out the effects of foreign exchange volatility on the industry, explaining that many telecom contracts were established at earlier exchange rates, while operators are now required to meet their obligations at elevated rates.
He called for stability in the foreign exchange market to foster industry growth, stressing that a robust telecom sector is crucial for overall economic stability.
“We understand the concerns, but this adjustment is necessary to maintain service quality,” he said.