Telcos seek 100 per cent tariff hike amid pushbacks

• MTN finally exits Guinea, sells business to the Guinean govt

Telecommunications operators said they proposed a 100 per cent tariff hike to the regulator, the Nigerian Communications Commission (NCC), across voice, data and digital offerings.

MTN Chief Executive Officer, Karl Toriola, disclosed this, yesterday when he featured on a TV programme to speak on some burning issues in the industry. Toriola, who doubted the approval of the 100 per cent tariff hike plan, said the campaigns for increment are not about profitability, but the sector’s sustainability.

He stressed that the telecoms industry, which has remained the pillar of the economy, must be sustained so that it does not collapse. He said: “This is not about profitability but the sustainability of the sector. I think the Federal Government was very supportive in 2024 with significant structural changes to support the industry, one of them was the Critical National Infrastructure (CNI) bill, which protects telecoms infrastructure as critical and gets all the security agencies behind it. The other is addressing the indebtedness of the entire sector, and we have been put to task on QoS obligations, and we shall put to task on that even more in 2025.

“Sustainability is at the heart of what is driving the economy. If you don’t have a sustainable industry, the economy and well-being of the people will be affected. Yes, everyone in Nigeria has gone through difficult times in the last two years due to economic challenges: inflation, and naira depreciation among others. For us, we are not talking about profitability, but sustainability. Profitability will come on a long-term basis.

“We have put forward a request of approximately 100 per cent tariff increase to the regulators, but I doubt if that will be approved because they are very sensitive to the current economic situation in the country. But we are hopeful that the realities are staring us in the face and that the right decisions will be made for the sustainability of the industry.

“If you imagine a company that four or five years ago, earned N1trillion and was making 10 per cent profit- N100 billion, looking at this, the total cost put together was N900 billion. Subsequently, two or three things happened like devaluation of the naira.

“Official exchange has gone up from about N420/$ or N450/$ to N1550/$ at the end of the year. So, that has driven our cost structures up drastically. Diesel has gone from pre-COVID-19 times of N200-N300/litre to N1000; petrol has gone up severalfold. This is even as power generation and the cost of procuring materials have equally gone up.”

He said raw materials in the sector include batteries, fibre cables and base station towers. Toriola explained that network service providers pay software licensing fees for the networks, which have risen astronomically.

Checks showed that the cost of a phone call is still between N6.40 and N50, while charges for SMS are pegged at N4 while the average price of a 1GB bundle is N1,000. But operators have asked for 100 per cent. The calls for tariff increase by the operators have met brick walls and intense backlashes.

For instance, the National Association of Telecoms Subscribers rejected the proposed increase in telecommunication tariffs, describing the plan as “insensitive” and a further burden on consumers already grappling with economic hardship.

According to a communiqué, signed by National President, Adeolu Ogunbanjo, and National Secretary Barrister Bayo Omotubora, NATCOMS criticised the tariff increase.

NATCOMS argued that these increases would exacerbate financial strain and reduce access to vital communication services for many Nigerians. The association also raised concerns about the cumulative impact of taxes on telecom services. NATCOMS highlighted the excise duty introduced by the 2020 Finance Act, which was suspended following public outcry and is currently the subject of a legal challenge.

Meanwhile, MTN Group said it has concluded the sale of its Guinea operations to the State of Guinea, marking its final exit from the market. According to a statement from the Group, the sale was concluded on December 30, 2024.

MTN said the transaction aligns with its focus on portfolio optimisation and simplification, as part of the Ambition 2025 strategy.

Commenting on the sale of the business, MTN Group President and CEO, Ralph Mupita, stated: “This milestone marks a new phase for MTN Guinea-Conakry under local ownership and MTN thanks the staff, customers, regulators and broader stakeholders in Guinea for the support during the time MTN has been operational in the country.

“Concluding this transaction is in line with the strategy to simplify the portfolio and allocate capital to markets where we can make a difference as MTN and deliver long-term growth and returns.”

The decision to exit the Guinea market stems from MTN’s assessment of portfolio fit within its risk management framework. Speaking to the media in Johannesburg in August 2024, Mupita explained the group’s rationale for disposing of operations in Guinea-Conakry and Guinea-Bissau.