Nigerians have expressed their dissatisfaction over a move by the telecommunication operators to increase the tariff for voice calls, short message services (SMS), and data services in the country.
Operators of telecommunication companies under the Association of Licensed Telecom Operators of Nigeria (ALTON) had asked for upward reviews in voice calls, short message services (SMS) and data costs by as much as 40 per cent.
ALTON said this in a letter addressed to the Nigerian Communications Commission (NCC), citing the rising cost of running a business. According to ALTON, the proposed upward review of the price of calls will increase from N6.4 to N8.95, while the price cap of SMS will increase from N4 to N5.61.
In swift reactions, mobile phone users, who spoke in separate exclusive interviews with LEADERSHIP yesterday, noted that, though, the proposed increase is understandable following rise in operating expenses, the timing for such proposed increase is a major concerns, judging from the fact that most Nigerians are barely struggling to survive financially.
To this end, Nigerians have called on the federal government to take action, stating that if government allows this, it will lead to other sectors of the economy following suit, making life more unbearable for citizens.
For instance, Mr Ifeanyi Chizor, a car spare part seller in Lagos said: “we could barely afford to pay our electricity bills. Food price has increased tremendously, making it difficult for us to eat three square meals. Now, it is telecoms industry. Life is already hard for us. How can we survive? I plead with the Nigerian government to weigh-in, as the cost of living is making Nigeria difficult to live in.”
As for Lekky Mamora, a 100 level students of the University of Lagos, increasing the tariff of calls and SMS, would only make life more difficult for the poor masses. “No doubt, our politicians can afford it, that is why they don’t care, when the prices of food stuff increased, when PHCN increase their tariff, and they won’t care if telecoms industry decided to increase the calls and SMS tariff,” he added. Mamora, however, pleaded with the telecoms industry to consider the masses, because they are the ones that will be affected.
Meanwhile, stakeholders in the telecoms industry have also called on the operators to consider Nigerians when reviewing the price of tariff. Cyber security expert, Alhaji Hakeem Ajijola told LEADERSHIP that, “most sectors of the economy are grabbling with the high cost of operation, and the telecoms industry is not immune. However, they should consider Nigerians who are already struggling to survive, while planning to increase the tariff.”
In his view, a stakeholder who spoke with LEADERSHIP anonymously called on the Nigerian government to beef up security, especially, in the northern part of the country. To him, the cost of operating in these states is high due to the insecurity.
“Staff are scared to go to work, our infrastructures are stolen or vandalized nearly on a daily basis, and consultants have increased their fee as they now have to pay for military escorts to those areas. Government must do something the insecurity in the country and also review their policies on tax and the high cost of obtaining licence like 5G, which will also bounce back to the public in the form of the calls and SMS tariff,” he added.
Earlier, the telecommunication operators, under the aegis of the Association of Licenced Telecoms Operators of Nigeria (ALTON), are seeking permission from the Nigerian Communications Commission (NCC), to increase the tariff of voice calls, short message services (SMS), and data services.
Since 2003, telecoms operators have not reviewed their call and SMS tariff, LEADERSHIP findings reviewed. For decades, the MTN Tru talk Plus tariff plan, offers subscribers 11 kobo per second call rate to all networks in Nigeria, with a daily access fee of N5. Networks like 9Mobile, Airtel and GLO also offer their subscribers 11 kobo per second call rate to all networks which is about N6 naira per minute, with an access fee of N5 naira, which will be deducted daily on the first call of the day.
But this is about to change, the head, Operations at Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbolahan Awonuga tells LEADERSHIP, while revealing that telecoms operators under ALTON, have written to NCC for a review of tariff of calls, SMS and data services.
Awonuga said, “Since 2003, we didn’t review the tariff, not because it has been all great, (like other sectors, telecommunication industry was financially impacted following Nigeria’s economic recession in 2020), but because, we didn’t want to add unnecessary financial burden on Nigerians.
“However, in recent times, the high cost of operation has become unbearable, ALTON’s head of operation said, adding that, “The cost of doing business in Nigeria has increased tremendously in the past years, and operators could no longer bear the loss. For instance, the high cost of diesel, multiple taxation and insecurity are the major reasons why operators are clamouring for increase in call and SMS tariff,” he added.
He explained that most telecoms operators don’t rely on the national grid to power their towers, adding that the cost of diesel required to power operators’ Towers, Base Stations and offices rose by a staggering 233 per cent from N225 per litre in January 2022 to over N750 per litre in March 2022. “Additionally, the introduction of new lines of fiscal obligations via the recent Excise Duty of 5 per cent on telecommunications services further exacerbates the burden of multiple taxes and levies in the sector,” he added.
Other sectors like power sector, food processing industry etc, have increased their goods and services, Awonuga said, adding that it is high time telecoms operators increased theirs. He confirmed that a letter from ALTON has been sent to NCC in that regard. Awonuga, while quoting part of the letter said, “As the Commission may be aware, the Power sector under the supervision of Nigerian Electricity Regulatory Commission (NERC), in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds.
“In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the Commission’s intervention in order to minimize the impact of the challenging economic issues faced by our members. Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the Mobile (Voice) Termination Rate (MTR) for Voice; Administrative Data floor price and cost of SMS as reflected in extant instruments. With respect to Voice and SMS cost, ALTON respectfully requests the commission to consider a Mark-up approach to address the upward price adjustment desirable for industry.
“We wish to request that the Commission implements the recommendations in the August 2020 KPMG Report on the Determination of Cost Based Pricing for Wholesale and Retail Broadband Services in Nigeria (Report). “We respectfully request that the proposed upward review of the Frequency Pricing Regulations and current administrative fees regime for services such as numbering fees, type approval fees, promotion fees and tariff modification/revalidation fees be suspended. It is our expectation that the above mentioned proposals will support our members and ameliorate the challenging economic situation facing the telecommunications industry.”
Awonuga however disclosed that, “If we don’t increase the tariff, the only option left is retrenchment. For us to survive, we either increase call tariff or retrench staff and then shed the financial loads equally. We will start retrenching staff, which will not be good for the economy, considering the high rate of unemployment in Nigeria. In order to meet our subscribers’ expectation, it is high time we jacked up the price a bit.”