Telecommunication operators in Nigeria have warned that the rising cost of operations may soon result in service disruptionThey noted that despite inflation surge and foreign exchange volatility, among other challenges, tariffs have remained unchangedIf tariff costs do not go up, the quality of service will drop since the telecom companies cannot maintain their critical infrastructure
Henzodaily.ng journalist Ruth Okwumbu has over a decade of experience and a deep understanding of Nigeria’s corporate sector and emerging trends in the fintech space.
Nigerian Telecommunication operators have decried the rising costs of operation, warning that Nigerians may soon start experiencing service disruptions.
Mr Gbenga Adebayo, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), noted that unless tariff costs increase to make up for the rising cost of operations, TELCOs may not be able to maintain the same quality of service or reach new areas.
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In a statement issued on Monday, December 29, Adebayo noted that these rising costs are driven by volatile foreign exchange rates, rising inflation, and increasing energy costs, which are reflected in fuel prices and electricity tariffs.
ALTON says the telecom companies’ financial burdens have become unbearable and unsustainable, hence the call for an increase in tariffs.
Photo Credit: Daniel Balakov
Source: Getty Images
Despite these, TELCO operators struggle to maintain quality service for customers even though tariff prices have remained unchanged for over a decade.
According to him, these financial burdens have become unbearable and unsustainable for the telecom companies, hence the call for an increase in tariffs.
Shedding service load to survive
According to The PUNCH, Adebayo noted that if telecom companies are not allowed to increase tariffs, operators may start shedding their service load to survive.
This would mean limiting telecommunication services in areas perceived to be unprofitable or at certain hours of the day due to operational issues.
Since a lot of businesses depend on connectivity to operate, it could have a significant economic impact.
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He said:
“There will also be national economic disruption where key sectors like security, commerce, healthcare, and education which rely heavily on telecom infrastructure, will face serious disruptions.”
Adebayo added that the strain on telecommunication operators’ finances also means that they would be unable to maintain or update critical infrastructure to improve their services.
Possible tariff increase in 2025
In a related development, Henzodaily.ng recently reported that telecom companies could soon secure approval to raise call and data tariffs.
This is coming after over a decade of unchanged tariffs and is likely to happen before the end of the first quarter in 2025.
Over the last decade, telecom companies have moved to increase their prices several times, but they have always been met with resistance, especially from the National Association of Telecommunications Subscribers (NATCOMS).
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Source: Henzodaily.ng