Earlier this month some operators had asked the regulator for permission to raise prices by up to 100% after they had been held at the same level for 11 years
The Nigerian Communications Commission (NCC) has said operators in the country can increase their tariffs by up to 50% for the country’s 210 million mobile customers. Earlier this month, some operators had lobbied the regulator to allow increases of up to 100% on the grounds that price rises has not been allowed in 11 years, despite inflation and some radical moves by the government intended to jump start growth of the economy.
They claimed that they could not remain financially viable unless the NCC allowed them to put up their charges in Africa’s most populous country.
Ongoing industry reforms
The NCC stated, “The adjustment, capped at a maximum of 50% of current tariffs, though lower than the over 100% requested by some network operators, was arrived at taking into account ongoing industry reforms that will positively influence sustainability… Tariff rates have remained static since 2013, despite the increasing costs of operation faced by telecom operators.
“The approved adjustment is aimed at addressing the significant gap between operational costs and current tariffs while ensuring that the delivery of services to consumers is not compromised. These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefitting consumers through improved services and connectivity, including better network quality, enhanced customer service, and greater coverage.
“Recognising the concerns of the public, this decision was made after extensive consultations with key stakeholders across the public and private sectors. The NCC has prioritised striking a balance between protecting telecom consumers and ensuring the sustainability of the industry, including the thousands of indigenous vendors and suppliers who form a critical part of the telecommunications ecosystem.
“The NCC recognises the financial pressures faced by Nigerian households and businesses, and remains deeply empathetic to the impact of tariff adjustments. To this end, the commission has mandated that operators implement these adjustments transparently and in a manner that is fair to consumers. Operators are also required to educate and inform the public about the new rates while demonstrating measurable improvements in service delivery.”
State of the nation
MTN Nigeria is the country’s biggest mobile operator and a subsidiary of MTN Group. Its shares jumped by about 10% after the NCC’s decision was announced. MTN Nigeria said in a note to the stock exchange, “This development is a significant milestone in ensuring the long-term sustainability of the telecoms industry in Nigeria, supporting the country’s critical infrastructure and services, while empowering millions of people and businesses and contributing to the country’s overall economic development.”
Nigeria’s other mobile operators are Airtel Nigeria, Globalcom (generally known as Glo) and 9mobile.
Consumers have reacted less enthusiastically with the National Association of Telecoms Subscribers (NATCOMS) is reportedly threatening court action. It had proposed tariff rises should be between 5% and 10%.