Telecom operators, subscribers at odds over proposed tariff hike

Stakeholders within the telecommunication sector are at loggerheads over the proposed hike in web knowledge tariff, voice calls, and brief message providers (SMS).

The Affiliation of Telecommunication Firms of Nigeria, ATCON, and the Affiliation of Licensed Telecoms Operators of Nigeria, ALTON, insist that the telecom sector might not survive if the Nigerian Communications Fee (NCC), the sector’s regulatory physique, fails to approve a brand new tariff regime.

They argued that rising operational prices, weakening Naira, and growing the value of vitality and infrastructure upkeep have severely affected telecom firms.

Nevertheless, subscriber associations just like the Affiliation of Telephones, Cable TV and Web Subscribers of Nigeria, ATCIS, insist that telecom operators should not have any justification to suggest a tariff hike, owing to the present financial realities.

Tariff hike

In its first half (H1, 2024) monetary report, MTN Nigeria reported an after-tax lack of N519. 1 billion, pushed by foreign exchange volatility and inflationary pressures. Airtel Africa, Nigeria’s second-largest telecom operator by market share, additionally reported after-tax losses to the tune of $89 million for its full yr ended March 2024.

To make issues worse, incessant vandalism, fibre cuts and theft of kit already price telecom operators billions of Naira to switch, along with the service disruption the considerations set off.

Whereas the value of web knowledge has remained comparatively steady up to now decade, requires an upward evaluate by telecom operators might change the established order.

President of the Affiliation of Telecommunication Firms of Nigeria, ATCON, Tony Emoekpere argued that the present tariff construction is now not tenable and a worth improve has turn out to be crucial to ensure high quality service supply.

“These tariffs have been frozen for such a very long time and to maintain them stagnant is completely unrealistic,” Mr Emoekpere advised PREMIUM TIMES.

“We perceive the truth that any worth improve will have an impact however what the tariff hike will present is healthier high quality of service to subscribers.”

Mr Emoekpere mentioned in its talks with the NCC, the regulatory physique urged telecom operators and firms to give attention to enhancing the standard of their providers and discover different measures quite than a tariff hike. He nevertheless expressed confidence that an approval is imminent.

“I don’t assume there will probably be a rejection; I believe the worst-case state of affairs is that the NCC might approve a lesser proportion of what’s being requested,” he added.

Subscribers’ counter-argument

A rise within the worth of voice calls, brief message providers (SMS) and knowledge might undermine Nigeria’s efforts to bridge the digital divide and obtain a broader broadband penetration, in accordance with some subscribers.

NCC knowledge reveals that the nation’s broadband penetration at present stands at 41.56% as of September, falling in need of the bold 70% goal set for 2025.

The Nationwide Bureau of Statistics, in partnership with the United Nations Growth Programme, reported in a 2021 survey that solely 22% of casual companies in Nigeria use the Web for his or her day by day operations. Contemplating Nigeria’s financial downturn, this quantity might endure a decline if the proposed tariff hike is carried out.

The proposed tariff hike has made subscribers and enterprise homeowners like Taiwo Matthew very involved, as his enterprise centre and looking cafe outlet rely closely on good web connectivity for easy operations.

Mr Matthew has managed to maintain his enterprise afloat for twenty years regardless of Nigeria’s harsh financial circumstances. Nevertheless, a tariff hike threatens to ship the final word blow, he mentioned.

To ensure sustainability, the businessman famous that his prospects will bear the burden of elevated prices as worth changes will probably be made.

“It doesn’t make sense in any respect, as a result of the nation is tough. So in the event that they improve their tariff meaning it’s going to have an effect on prospects as a result of there will probably be a rise in costs,” he mentioned.

The President of the Affiliation of Telephones, Cable TV and Web Subscribers of Nigeria, ATCIS, Sina Bilesanmi, condemned the proposed tariff hike, particularly within the face of Nigeria’s present financial decline.

Mr Bilesanmi said that not solely do telecom operators not have a floor to hike the value of web providers, however customers should be consulted earlier than any resolution might be made.

He mentioned telecom operators ought to name for a correct stakeholder assembly, the place particulars of the proposed tariff hike might be mentioned with customers.

“They can’t do it alone, all stakeholders should come to an settlement,” he mentioned.

The ATCIS president additionally raised concern over NCC’s effectiveness in regulating the telecoms sector, underneath the brand new administration.

“Earlier than we used to see how lively the NCC was however since this new administration resumed, NCC has been happening. We don’t know if the regulatory physique has been compromised however we’re prepared to research the matter, expose and likewise sue them,” he mentioned.

Poor web service, knowledge depletion persist

Amid the clamour for tariff hikes, subscribers proceed to expertise poor web providers.

Simisola Adigun works for a broadcast station in Lagos the place tv information manufacturing varieties the core of her duty. In response to Ms Adigun, the poor web connectivity has significantly impacted the newsroom’s productiveness. She says the scenario has gotten so unhealthy that conducting interviews by way of Skype or Zoom is sort of not possible.

She mentioned calls to the web supplier provide little or no resolution. The scenario has given her organisation a foul fame as interviews take longer than vital as a result of poor web connection.

“The poor community service is a giant downside for folks like me who work within the media, because it impacts our productiveness,” she mentioned.

“Now we have earned a foul fame as that media home with an unstable community and such a tag is de facto unhealthy for the model.

“Making numerous calls to the community supplier yields little or no end result on the finish of the day,” she added.

Ms Adigun questioned the effectiveness of the NCC in imposing the supply of fantastic web connectivity by telecom firms and operators.

She added that telecom operators ought to first enhance the standard of their providers earlier than proposing a tariff hike.

“We aren’t getting worth for the cash we’re paying, so there is no such thing as a justification for the rise. Persons are struggling to make a dwelling and also you now anticipate these identical folks that you’re providing unhealthy providers to fulfill up with the brand new tariff. It makes completely no sense,” she mentioned.

Apart from poor web connectivity, knowledge depletion is one other problem subscribers grapple with.

Each month, Mr Matthew purchases the limitless subscription package deal at the price of N28,000 to run his enterprise. Nevertheless, the subscription, which should be limitless as marketed, will get exhausted inside two to a few weeks regardless of temperate utilization.

He mentioned the scenario makes him incur additional operational prices.

“Each month, I subscribe for the Airtel limitless package deal which prices 28,000 per thirty days. Nevertheless, it doesn’t final for the total month, it finishes by the third week,” he mentioned.

Operators, NCC maintain mum over particular proportion improve

Not a lot is thought in regards to the particular proportion improve telecom operators are proposing. When requested, Mr Emoekpere declined to offer a quantity.

“The proposed improve continues to be underneath dialogue with related businesses so I gained’t be capable to specify what precisely the proportion improve is, however I do know that discussions are nonetheless ongoing with reference to tariffs,” he mentioned.

Adeolu Ogunbanjo, the president of the Nationwide Affiliation of Telecommunications Subscribers (NATCOMS), advised PREMIUM TIMES that his organisation proposed a rise of 10 per cent as a greater various to loading shedding.

Load shedding occurs when telecom operators shut down some cell websites and rotate connectivity.

He mentioned the tariff hike would increase the telco’s profitability and, in flip, assist enhance the standard of service to finish customers.

“Reasonably than permitting the telecom trade to be killed, it’s higher we enable a rise of not more than 10% in order that they’ll survive,” he mentioned.

PREMIUM TIMES reached out to Reuben Muoka, the NCC Director of Public Affairs, to hunt readability in regards to the fee’s stance on the proposed tariff hike, if the downturn in web connectivity is linked to the demand for a tariff hike, amongst different points.

Mr Muoka, nevertheless, declined to touch upon the matter, saying “it’s not a topic of media dialogue.”

In October, NCC mentioned it had commenced “pre-enforcement measures” towards Elon Musk’s Starlink for growing its subscription costs with out approval.

READ ALSO: MTN Nigeria’s nine-month loss soars amid naira devaluation

The web firm had introduced it was growing its month-to-month subscription price from N38,000 to N75,000. It additionally elevated the value of its {hardware} from a earlier worth of N440,000 to N590,000.

The announcement sparked outrage from client safety associations like ATCIS and native telecommunications suppliers.

Checks by PREMIUM TIMES present that the value adjustment had been reversed and the outdated worth remained on Starlink’s web site.