By Lukman Laleye Babalola
The Nigerian Communications Commission (NCC) recently approved a 50% increase in telecommunications tariffs, a decision that has sparked debates across the country. While telecom operators argued that the hike is necessary for the industry’s survival amid rising costs, consumer rights groups and labor unions see it as an additional financial burden on Nigerians already struggling with inflation and economic instability.
As the new tariff policy takes effect, stakeholders remain divided over its implications. This feature examines the reasons behind the increase, its impact on consumers and the economy, and possible ways forward.
Why Did the NCC Approve the 50% Tariff Hike?
Nigeria’s telecom industry has operated under a fixed pricing structure for over a decade, despite rising inflation, currency devaluation, and increased operational costs. Telecom operators, including MTN, Airtel, Glo, and 9mobile, have repeatedly called for a tariff review, citing the following challenges:
1. Inflation and Naira Depreciation
The cost of importing telecom infrastructure—such as network equipment, fiber optics, and software—has skyrocketed due to the fall in the value of the naira against the dollar. Many telecom components are priced in dollars, making them significantly more expensive than they were a decade ago.
2. High Operational Costs
Telecom operators spend billions of naira on fuel and electricity to power base stations, especially in remote and underserved areas. Additionally, the insecurity in parts of the country has increased operational risks, forcing companies to spend more on security.
3. Heavy Taxation and Multiple Levies
The telecom industry is one of the most taxed sectors in Nigeria. Operators face multiple levies from federal, state, and local governments, adding to their financial strain.
To address these challenges, the NCC opted for a 50% increase, rejecting an initial 100% hike proposal from telecom operators. This compromise aims to keep the industry financially stable while minimizing the impact on consumers.
Public Reactions: Backlash from Consumers and Labour Unions
While telecom operators welcome the tariff hike, many Nigerians see it as a harsh economic decision at a time of financial hardship. The Nigeria Labour Congress (NLC) and other advocacy groups have condemned the move, calling it “insensitive” and “unjustifiable.”
NLC President Joe Ajaero announced a nationwide protest scheduled for February 4, 2025, demanding the reversal of the tariff increase and urging the government to take action against rising living costs.
“The government should be reducing costs for Nigerians, not increasing them,” Ajaero stated. “This decision will only make life harder for the average Nigerian.”
Many consumers share this sentiment, arguing that data, call, and SMS rates are already expensive compared to the average income level. With food prices, fuel costs, and transportation fares rising, the added burden of higher telecom bills is seen as unfair and unnecessary.
Telecom Industry’s Perspective: A Necessary Adjustment
Despite public opposition, industry experts insist that the tariff hike is necessary to sustain Nigeria’s telecom sector. The Global System for Mobile Communications Association (GSMA) supports the increase, projecting that it will:
Attract over $150 million in new investment, boosting the industry.
Expand 4G network coverage to 94% of the population, connecting about 9 million more people, including 2 million in rural areas.
Create approximately 2 million jobs in the telecom sector.
Generate N1.6 trillion in tax revenue for the government.
Dr. Bode Ajibade, an ICT expert, believed the increase is long overdue.
“If we continue with low tariffs while costs keep rising, telecom companies will struggle to maintain service quality. In the long run, poor network coverage and slower internet will hurt consumers more than a price increase,” he said.
What’s the Way Forward? Possible Solutions
As tensions rise between consumers, labor unions, and telecom operators, some experts suggest a more balanced approach to the tariff adjustment. Possible solutions include:
1. Phased Implementation
Instead of an immediate 50% increase, the NCC could introduce a gradual increase over 6 to 12 months. This would give consumers time to adjust while still allowing telecom operators to recover their costs.
2. Government Intervention to Reduce Costs
Rather than passing all financial burdens onto consumers, the government could ease operational costs for telecom companies by:
Reducing multiple taxation that inflates telecom expenses.
Providing incentives for alternative energy solutions to reduce reliance on expensive fuel and generators.
Investing in telecom infrastructure, especially in underserved areas, to lower expansion costs for operators.
3. Special Consumer Relief Measures
To protect vulnerable Nigerians, the NCC could mandate affordable packages for:
Students who rely on mobile data for education.
Low-income earners who need access to communication services.
Small businesses that depend on telecom services for digital transactions.
If implemented, these solutions could ensure industry sustainability while minimizing the financial impact on consumers.
Conclusion: A Delicate Balancing Act
The NCC’s 50% tariff hike represents a difficult but necessary step in maintaining the long-term health of Nigeria’s telecom industry. While it addresses the rising costs faced by operators, it also places additional financial pressure on consumers who are already struggling with economic hardship.
The key challenge now is finding a middle ground—one that keeps the telecom sector competitive without making communication unaffordable for Nigerians.
As the February 4 protest date approaches, the government must decide whether to review the tariff policy, introduce relief measures, or maintain the current plan. Whatever the outcome, one thing is certain—the future of Nigeria’s telecom industry and digital economy depends on striking the right balance between business sustainability and consumer protection.
What’s your take on the NCC’s tariff hike? Should the government intervene, or is this a necessary step for industry survival? Share your thoughts.
*Lukman Laleye Babalola, Publisher Emporium Reporters online and Emporium Magazine.He writes from Abuja 08037469328. babalolalukman@gmail.com