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By Chinenye Anuforo
Nigeria’s telecommunications industry faces a looming financial crisis, with operators citing unsustainable operating costs and an outdated tariff structure as major challenges.
Industry leaders have issued warnings that without the 50 percent tariff hike, the sector risks insolvency, potentially triggering network failures with recovery timelines stretching into years. These warnings come as the Nigeria Labour Congress (NLC) plans mass protests against the proposed increase.
Tobe Okigbo, MTN Nigeria’s chief corporate services and sustainability officer, painted a bleak picture of the industry’s future during the telecom CEOs forum held yesterday in Lagos, emphasising the urgent need to address pricing challenges.
He pointed out the stark contrast between soaring costs for essential goods (like “tomatoes, bread, and potatoes,” which have increased by over 100 percent in the past year) and stagnant telecom tariffs.
“The discussion should not be about whether we should increase prices; it should be about whether we want a telecom sector that continues to drive the Nigerian economy. If operators can no longer sustain services due to financial strain, the cost of restoring the industry will be immense,” Okigbo stated.
Unlike electricity, which offers backup solutions like generators, telecommunications networks have no such alternatives. Network failures would cripple businesses, financial transactions, and everyday communication. The proposed 50 percent tariff increase, Okigbo stressed, is not about profit but about survival, necessary to maintain network operations, enhance service quality, and expand coverage to unconnected rural areas.
“The last cost study was conducted in 2021 but was never implemented because the government felt the suggested price hikes were too high. The reality is, the study recommended a 100 percent increase, but the government only approved 50 percent,” Okigbo explained.
Fiber cuts and vandalism pose a significant challenge. MTN Nigeria experiences 37 fiber cuts daily, while Airtel suffers 44, largely due to construction activities and theft. These disruptions degrade service quality, leading to dropped calls and slow internet speeds. The government’s designation of telecom infrastructure as Critical National Infrastructure (CNI) and the resulting stricter penalties for damaging telecom assets, Okigbo believes, will lead to improved service quality within the next three months.
Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), echoed these concerns, warning of widespread insolvency if financial losses continue.
“The telecom sector is the superhighway of the economy. If it collapses, the entire economy will suffer. The number of telecom operators has already declined due to financial pressures. Without urgent action, the sector could hit a tipping point from which recovery would be extremely difficult,” Adebayo cautioned.
Adebayo dismissed arguments for artificially low telecom prices due to economic hardship. “Telecom operators cannot subsidize the economic difficulties in other sectors. If prices stay unsustainably low, service quality will deteriorate, and ultimately, the industry will collapse,” he warned.
He used a powerful analogy to illustrate the industry’s plight: “If a patient needs 100 liters of oxygen and you only provide 10, we all know what happens. The proposed 50 liters is already a compromise—a lifeline that allows us to survive, recover, and contribute to the economy,” he said.
Following government approval of the 50 percent price increase, telecom operators have submitted tariff adjustment proposals to the Nigerian Communications Commission (NCC).
Ugonwa Nwoye, MTN Nigeria’s chief customer relations and experience officer, confirmed the ongoing regulatory process, stating that customers should expect phased price adjustments in the coming weeks, with full implementation anticipated by February. Operators have pledged transparency in communicating the new rates and minimizing service disruptions.
