Feature

Interrogating The Socio-Economic Implications Of Telecoms Tariffs Hike

By Stella Enenche, Abuja

Like a bolt from the blue, the Nigerian Communications Commission (NCC) recently announced a tariff hike, which would have immediate and consequential effects on cost of phone calls, data usage, Short Message Service (SMS), and Unstructured Supplementary Service Data (USSD).

The approval given by the regulator to the telecommunications operators on Monday, January 20, to jerk up tariffs by 50 percent has continued to elicit mixed reactions, amid its socio-economic implications on the masses. This is more so that the development came at a time Nigerians are still grappling with the harsh realities of the economic reforms introduced by the present administration of President Bola Tinubu.

Announcing the hike, NCC said it would remain within the tariff bands stipulated in its 2013 Cost Study, and requests will be reviewed on a case-by-case basis as is the Commission’s standard practice for tariff reviews.

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“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 benefiting 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 said it is recognises the financial pressures faced by Nigerian households and businesses and remains 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.

“Additionally, the NCC reaffirms its dedication to fostering a resilient, innovative, and inclusive telecommunications sector. Beyond protecting consumers, the Commission’s actions are designed to ensure the long-term sustainability of the industry, support indigenous vendors and suppliers, and promote the overall growth of Nigeria’s digital economy.

“As a regulator, the NCC will continue to engage with stakeholders to create a telecommunications environment that works for everyone—one that protects consumers, supports operators, and sustains the ecosystem that drives connectivity across the nation”.

Just like the increment in fuel price, transportation, food staples, housing, education ,electricity, health care among others, Nigerians will have to contend with the recent hike by mobile network providers.

As at December 2024, inflation rate in Nigeria stood at 34.80%, according to official statistics released by the National Bureau of Statistics (NBC). However, for millions of Nigerians, these hikes will further strain their already tight household budgets.

Telcos on the other hand have longed for this hike following the harsh operating environment that has spiked their operating cost by 300 percent over the years. Record losses since 2023 after a significant devaluation of the naira have further compounded telcos’ woes, fueling their requests for tariff hikes.

As expected, a cross-section of Nigerians, who spoke with TheFact Daily on the new tariff regime, expressed divergent views, as they spoke for and against the increase.

A consultant, Harmony Lifu said ,”Clearly, the 50 per cent hike in tariff by Telecos will further worsen the plight of the Nigerian masses, who have continued to endure the removal of fuel subsidy among other harsh economic realities staring them in the face. At all times, government must ensure that its policies and programmes are a product of painstaking cost/benefit analysis; they must be people-centred”.

A businessman, Charles Ifeanyi, described the development as insensitive. His words: “The tariff increase demonstrates another level of insensitivity on the part of the government. The government just load the citizens with all the problems. The economy looks like it will collapse because the people can no longer breathe.

“The government came in and removed fuel subsidy, we are still dealing with that one they did reform in power sector, the band A,band B . They have tactically put everybody in Abuja on band A at three times higher than the cost of buying electricity all of these put together. Transportation hike, food inflation, everything pressing the common man and they still went ahead to increase tariff on telecoms. It is insensitive to say the least. What will Nigerians do, nothing . We will just stay and look up to the government.

“Those who will die will die .Those who will live will live. Those who can steal will steal and Nigeria moves on. It is unfortunate. I hope this country wakes up on day and begins to do things better”.

An automobile Engineer, Francis Adah said It’s an injustice to the Nigerian workers whose salary has not been reviewed upwardly.

“It’s insensitive on the side of government to increase tariff. This will only increase the economic hardships of the citizens. I wonder what they have in mind each time they introduce such hard policies on the masses. It is unfortunate”.

Adaeze Obiagui, a civil servant said Increment of tariff does not determine the domestic income of a country rather it will only make people shy away from certain commitment .

“When the tariff is low, people engage more thereby sustaining the economy of the country. So taxing people because you just want to boost economy is not all right. There are other avenues for a country to develop because we are tax payers is not by tariffs alone. I don’t see the burden of tariff increment as a necessity. I believe that a country can still thrive by low tariffs. Tariffs that are minimal, welcoming and okay for the citizens because we are the people paying. When everything is moving well that is when you will say okay, there is need for an increment, not when you know that people are barely surviving and you are channeling your energy on increment. I think it’s a no, no and it’s not the way forward for a developing country.”

Speaking in favour of the increment, a Business development expert, Ogechi Immaculata said “From my understanding, no business wants to be at loss, hence the increment in tariffs. if you ask me if I like the increment,No I don’t, but what if they decide to suspend the services who will suffer it, I will. I will definitely adjust. If we can adjust to increment in fuel and electricity tariffs then I will with that of network providers. The only thing is that it will limit the number of unnecessary calls I make.”

A lecturer, Deborah Madaki said “As much as it feels like everything keeps increasing at the same time in Nigeria, we must also consider that the cost of doing business has also increased which may be one of the reasons for the increased tariff on calls and SMS, the sad thing is that it is the masses who bears the brunt, but I guess this is the country we find ourselves, so I will not totally blame NCC because I feel increase in the cost of running business may be behind this increase in tariff”.

The last may not, however, been heard about the tariff hike, as the Nigeria Labour Congress (NLC), and the Trade Union Congress (TUC) push for a reversal.

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