Telcos fume as FG orders tariff hike reversal

Telcos fume as FG orders tariff hike reversal

The Federal Government has ordered telecommunication companies to reverse their recent 10 per cent hike in calls and data prices.

This decision means that telcos like MTN Nigeria and Airtel, who had initially increased the prices of their data bundles by about 10 per cent, will now need to revert to their old prices.

This was revealed by the Nigerian Communications Commission on Wednesday.

The commission said the initial consideration for 10 per cent approval for tariff adjustments for different voice and data packages was in line with the mandates of the commission as provided by the Nigerian Communications Act, 2003, and other extant Regulations and Guidelines, as this was within the provisions of existing price floor and price cap as determined for the industry.

However, it stated that its decision to allow telcos such as MTN Nigeria and Airtel to review the prices of some of their tariffs was taken after it critically and realistically reviewed and analysed the operational environment and the current business climate in the nation.

The NCC said that even though the tariff adjustment was provisionally approved by its management, its board has now overturned it.

A statement signed by the Director, Public Affairs, Reuben Muoka, said, “The Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, has maintained that his priority is to protect the citizens and ensure justice to all stakeholders involved.

“As such, anything that will bring more hardship at this critical time will not be accepted. This was also why he obtained the approval of President Muhammadu Buhari for the suspension of the proposed 5 per cent excise duty, in order to maintain a conducive enabling environment for the telecom operators.

“Much as there is an increase in the cost of production, the provision of telecom services is still very profitable and it is necessary that the subscribers are not subjected to a hike in charges. In view of the above, the Commission, through a letter sent on the 12th of October 2022, has already directed the affected Mobile Network Operators to reverse the upward tariff adjustment.

“The Commission will carry our further consultations with all industry stakeholders on the best approaches that will protect and uphold the interest of both the consumers and the service providers.”

Since the turn of the year, telcos have been agitating for an upward price review of their services because of increases in their cost of production. In a recent letter to the NCC, the Association of Licensed Telecoms Operators of Nigeria, revealed that the cost of operation for telcos has increased by 40 per cent since the Russia-Ukraine war started.

Findings show telcos have implemented the latest directive but were angry over the development.

According to sources in the telecoms industry, telcos have reserved their prices but the move by the government is telling and will impact investor confidence.

One telcos source said, “To be honest with you, we had to reverse the prices about a week ago. We did it quietly. There are so many layers to this. If we were in a serious country, how can a regulator give approval then deny it did so after a while.

“They don’t know the gravity of this decision. The prices of everything have gone up, even bread is now more expensive. We use scarce foreign exchange in the industry. The only reason why we are still surviving is because of volume. The cost of production has seriously gone up, eating into margins. Investors that should come to the country will not come. We cannot talk because we are still trying to protect our business, but we will continue to bear this.”

Another telcos source blamed the recent move on politics. The source refused to speak but said, “I am a businessman, I don’t want to heat up the business climate.”

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