Telecommunications service subscribers have opposed the planned increase in the cost of voice calls, short message services (SMS) and data services in the country.
They claimed the economic hardship, including steep inflation rise, has shrunk disposable incomes significantly making the planned tariff hike ill-timed.
The telecom operators under the aegis of the Association of Licensed Telecoms Operators of Nigeria (ALTON) have written to the Nigerian Communications Commission (NCC) about the possible tariff review.
ALTON, while citing a rise in energy cost, impacts of insecurity and other operating challenges in the country on their operations, claimed they are left with no choice but to increase tariffs unless the situation improves.
The body made its plan known in a letter addressed to the leadership of the NCC. The letter was dated April 25, 2022, but received and acknowledged by the NCC on April 27, 2022.
Telecom companies proposed a 40 per cent increase in the cost of calls, SMS, and data to the NCC as a result of the rising cost of business operations.
Based on their proposal, the price floor of calls will increase from N6.4 to N8.95 while the price cap of SMS will increase from N4 to N5.61.
The letter, which was signed by the Chairman and Head of Operations, Gbenga Adebayo and Gbolahan Awonuga respectively, said the challenges have impacted their operations significantly.
But the president of the National Association of Telecoms Subscribers of Nigeria (NATCOMs), Chief Deolu Ogunbanjo, said telcos should not increase tariffs because subscribers are passing through a lot of challenges now.
Ogunbanjo said the operators should hold the Minister of Communications and Digital Economy, Prof. Isah Pantami, and the NCC responsible for the drop in their revenues.
“The Chairman of ALTON, Gbenga Adebayo, and I were at a television programme, last month, where he denied any planned hike in service tariffs. The challenge with them is the NIN-SIM issue, where over 72 million telephone lines have been barred. This definitely would impact their revenues. So, instead of venting their anger on subscribers, they should appeal to the Federal Government to extend the verification by three months. It will allow them to increase their revenues. For subscribers, tariff hike is a ‘no no’,” he stated.
ALTON had said that the economic challenges in the country resulted in an increase in energy costs (which constitutes an appreciable 35 per cent of ALTON’s members’ operating expenses).
“Consequently, the cost of diesel required to power operators’ towers, base stations and offices rose by a staggering 233 per cent from N225 per litre in January 2022 to over N750 per litre in March 2022.
“Additionally, the introduction of new lines of fiscal obligations via the recent Excise Duty of 5 per cent on telecommunications services further exacerbates the burden of multiple taxes and levies in the sector.
“As the Commission may be aware, the Power sector under the supervision of the Nigerian Electricity Regulatory Commission (NERC) of the Power sector in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds reported above.
“In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the Commission’s intervention in order to minimise the impact of the challenging economic issues faced by our members,” the letter said.
The association also demanded an upward review of the price determination for voice, data and SMS.
For data services, it requested that “the Commission implements the recommendations in the August 2020 KPMG Report on the Determination of Cost-Based Pricing for Wholesale and Retail Broadband Services in Nigeria.”
In addition, it called for the suspension of punitive monetary sanctions and extension of the payment timeline of relevant regulatory levies/ fees in compliance with the Commission’s mandate by, at least, three months from the stipulated date of fulfilment.
They also want the Commission to prevail on the federal government to sign the Executive Order declaring telecommunications infrastructure as critical national infrastructure for the due protection of the infrastructure and to mitigate cost expended towards replacing the damaged/stolen infrastructure and other amenities.