- NCC hike telecom tariff price by 50% after decades of lobbying and pushing for adjustment
- NLC, House of Reps kick, ask NCC to reverse hike, citing harsh economic situation
- NCC, Telecom operators adamant, say the hike is for network improvement
On January 24, 2025 after more than a decade of lobbying and pushing, the Minister of Communication, Innovation and Digital Economy, Bosun Tijani, announced that the Federal Government approved a 50 per cent tariff hike for telecommunication companies to sustain the industry.
The minister added that the new tariff would allow telecommunication companies to be able to invest in new infrastructure and improve connectivity.
He said this at the maiden Robotics and Artificial Intelligence Nigeria (RAIN) summit on Saturday in Ibadan with the theme: “The Rain of Transformation is upon us: CEOs Arise.”0:00 / 0:00
Knowing the economic implications the minister urged Nigerian youths to drive technological progress as the present administration provides the infrastructure.
According to the minister, “the biggest challenge for governments is individuals, as we invest in infrastructure to drive the progress of technology.
“We need individuals; we need innovators; we need entrepreneurs to actually build the technologies.”
Commending the founder of RAIN, Dr Olusola Ayoola, the minister said that “without folks like him and the work they are doing in ICT terrain, it will be difficult for Nigeria to develop technologically.”
“I think we are grateful that Nigeria has the privilege of a man like Ayoola who is putting Ibadan on the map.
“Governments cannot build the progress that we want to build. What governments will build is the foundation for that progress to happen,” Tijani said.
The minister said the future of robotics and Artificial Intelligence (AI) in Nigeria had already been made known.
According to him, the productivity and prosperity that nations want to build will come from the smart application of AI.
“And with what RAIN is building, we will start to see more direct application coming from the innovation that the young people are building.
“And that is what any nation wants to see. Our role is to continue to support,” he said.
He noted that the government’s role was to continue to invest in infrastructure that would enable technological progress and make it happen.
Chief Aderemi Oseni, the special guest at the event and Chairman, House Committee on Federal Road Maintenance Agency, underscored the importance of identifying and developing capacities in technology for youths.
Oseni noted that creating opportunities in technology would help reduce the high unemployment rate among the youth.
Also, the former Chief Executive Officer of First Bank of Nigeria Ltd., Dr Adesola Adeduntan, said the transformational impacts of robotics and AI were enormous.
According to him, it has changed the face of how businesses and companies operate and enhanced decision-making, proficiency, reduced operational costs, and delivered personalised services to customers.
The Senior Special Assistant to Oyo State Governor on ICT and e-Governance, Mr Bayo Akande, spoke on the giant strides the state had made technologically.
According to him, the state government will continue to support and provide an enabling environment for technology transformation.
Akande noted that the state had invested massively in building a robotics and artificial intelligence hub for educational purposes.
Earlier, the convener and Chief Executive Officer (CEO) of RAIN, Dr Olusola Ayoola, said the summit was to bring together a community of Nigerian young people and entrepreneurs.
According to him, the government and other stakeholders need to know that Nigeria has the capacity and capability in the latest technologies that can bring prosperity to the nation if well harnessed.
“RAIN already has a coverage. We have a RAIN network in about 50 institutions in Nigeria, and this is to pursue the goals we believe in, which is tech development through AI and robotics,” Ayoola said.
He said the policy direction should be to enhance easy learning of AI and robotics for the youth through developing local content by sourcing local experts as trainers.
Though the last significant increase in telecom tariffs in Nigeria occurred in 2013, analysts are of the opinion that the recent increase is coming at the wrong time when the citizens are yet to come out from the painful economic reform policy.
However, since the 2013 increase, the telecom industry has experienced massive changes, including rapid technological advancements and increased demand for data services. Telecom companies argue that despite these changes, their revenue streams have not grown proportionally due to regulatory restrictions on pricing, leading to financial strains on their operations.
Analysis of the effect of the hike
The Nigerian Communications Commission approved a 50 per cent increase in call tariffs on Monday, which may raise the average cost of calls to N16.5 per minute.
Based on the 2023 national telephone traffic data, this hike could generate over N6.74tn in revenue for telecom operators in 2025 if call volumes remain stable, hence Nigerians may pay this amount to the firms.
However, this projection excludes the impact of free and discounted call promotions, which may alter actual revenue figures.
An analysis of data from the latest 2023 Subscriber/Network Performance Report by the NCC showed that in 2023, total outgoing telephone traffic was 205.3 billion minutes, while incoming traffic stood at 203.2 billion minutes.
The report read, “As of December 2023 total outgoing Local and National Traffic was 205,298,114,995.11 minutes while Total incoming Local and National Traffic was 203,187,588,876.00 minutes. MTN had the highest total outgoing and incoming Traffic of 122,667,600,437.00 and 123,762,501,615.00 minutes respectively in 2023.”
This implies that Nigerians spent about 408.5 billion minutes making local calls in 2023.
Since there was no fresh data yet for 2024, our analysis was based on the available data for 2023, which might vary for 2025.
Our analysis also excluded international calls, although Nigerians spent 1.5 billion minutes on international calls in 2023, according to the NCC.
Further analysis showed that MTN led the market, recording 122.7 billion minutes of outgoing traffic and 123.8 billion minutes of incoming traffic.
At the new rate of N16.5 per minute, MTN’s combined revenue from outgoing and incoming calls is projected to exceed N4tn, making it the primary beneficiary of the tariff adjustment and accounting for over 60 per cent of the market’s total revenue.
Airtel is expected to follow with a projected revenue of approximately N1.78tn, reflecting its strong share of both outgoing and incoming traffic.
Glo, the third-largest operator, is estimated to generate N536.2bn.
Smaller players, including Smile and Ntel, are expected to earn N5.7bn and N13.1bn respectively, affirming their minimal market influence.
9mobile (EMTS) is likely to generate about N105.6bn from its traffic volumes.
The projected N6.74tn revenue highlights the significant impact of the tariff increase.
Outgoing calls alone are expected to bring in N3.28tn, while incoming calls will contribute an estimated N3.23tn.
Despite the growing popularity of data services and over-the-top messaging platforms, voice calls remain a significant revenue driver for telecom operators.
MTN’s dominance in outgoing and incoming traffic reinforces its leadership position, with Airtel and Glo following as major contributors.
In contrast, smaller operators continue to face challenges, with limited market penetration and a smaller customer base impacting their revenue potential.
It was further observed that the 50 per cent tariff hike approved by the NCC will likely raise the average cost of an SMS to N6, and significantly boost revenue for telecom operators in Nigeria.
Based on the 2023 SMS traffic data, the projected earnings for 2025 could surpass N137.84bn, assuming traffic remains unchanged.
According to the NCC’s 2023 annual report, a total of 22.97 billion SMS were sent and received during the year, representing an 11.38 per cent decline from the 25.92 billion recorded in 2022.
MTN accounted for the highest SMS traffic, with 8.21 billion sent messages and 8.57 billion received, bringing its total to 16.79 billion SMS.
With the revised tariff of N6 per SMS, MTN is expected to earn approximately N100.72bn, making it the likely largest beneficiary of the hike.
The telecom giant’s share of SMS traffic represents over 73 per cent of the total market, securing its position as the dominant player in the sector.
Airtel is projected to generate N26.26bn in revenue from its total SMS traffic of 4.38 billion, comprising 2.01 billion sent messages and 2.37 billion received.
This accounts for 19 per cent of the projected industry-wide earnings. Glo, with a total SMS count of 1.35 billion, is expected to earn N8.10bn, representing 5.88 per cent of the total revenue.
Meanwhile, smaller operators such as EMTS and Smile are likely to see modest revenues.
EMTS, with 458 million SMS, is projected to earn N2.75bn, while Smile, which recorded just 1.2 million SMS, is expected to generate N7.36m.
Combined, these smaller players contribute less than two per cent of the total projected revenue for 2025.
The telecom industry is projected to earn N137.84bn from SMS in 2025, driven by the tariff hike.
However, the new pricing may affect consumer behaviour, as more Nigerians may shift towards over-the-top messaging platforms such as WhatsApp and Telegram, which offer cost-free alternatives.
However, with the new price adjustment of 50 per cent increase, the average cost of phone calls will likely rise from N11 to N16.5 per minute, SMS charges will increase from N4 to N6, and the cost of 1GB of data will jump from N350 to N525.
Reactions trail the hike
Expectedly, following this hike, organization, groups and indeed many Nigerians have continued to kick against such astronomical price hike.
The President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, has rejected the imposition of a new duty on the telecom sector, warning that it would worsen the taxation burden and negatively impact Nigerians.
“There was no agreement reached at the meeting with stakeholders,” Ogunbanjo said. “We presented our case, but nothing concrete was resolved during the meeting with the NCC in Abuja.”
The association has vowed to take legal action if the proposed duty is implemented without addressing subscribers’ concerns.
Ogunbanjo noted that while the association might accept a tariff increase of 5 to 10 per cent, anything beyond that would be unacceptable.
“If this new duty is implemented, we will take the matter to court. This kind of policy cannot stand,” he declared.
He suggested alternative funding mechanisms for telecom operators, such as raising capital through Initial Public Offerings.
“Let Nigerians be part of the business by buying shares. MTN has already gone public, and others can follow. This way, operators can raise funds without overburdening subscribers,” he said.
Ogunbanjo also highlighted the critical role the telecom sector plays in Nigeria’s economy, noting its contribution to foreign direct investment and GDP growth.
“Apart from oil, telecommunications is the only sector attracting significant investment. We cannot allow policies that will collapse the industry,” he stated.
He appealed to the minister to reconsider policies that could further impoverish Nigerians, citing poor electricity and economic conditions as ongoing challenges.
“A 50 per cent increase will cripple Nigerians. We will not accept this. A moderate increase is enough, and operators should explore other ways to generate funds,” Ogunbanjo insisted.
The Association of Telephone, Cable TV, and Internet Subscribers of Nigeria stated that with such an increase in tariff, there is a need for significant improvements in service quality.
President of the consumer group, Sina Bilesanmi told The PUNCH that the regulators including the NCC, and the minister were part of a virtual meeting in the morning where the decision for tariff hike was made.
Bilesanmi stated that the new tariff is to be implemented in February and warned that service providers must enhance their infrastructure and service quality within two weeks of the rollout.
“If we don’t see tangible improvements, we will take legal action against the telcos, the NCC, and the Federal Government,” he said.
The association’s support for the adjustment was driven by several factors, including the need to prevent the telecom sector from collapsing and to foster economic growth.
However, Bilesanmi made it clear that their acceptance is contingent on improved service delivery. “We urge our members to accept the tariff adjustment, but only if it results in better service. Otherwise, we will hold the authorities accountable,” he added.
Acknowledging the pressure in making the decision, Bilesanmi noted that stakeholders argued that rejecting the hike could lead to a shutdown of services. “I don’t want to be seen as an enemy of the economy,” he stated.
As February approaches, the association said it will closely monitor developments and remains committed to protecting consumer interests through all available legal means if service quality falls short of expectations.
House of Reps orders suspension of the hike
The House of Representatives on Tuesday directed the telecom regulator and the Minister of Communications, Innovation, and Digital Economy to suspend the tariff increase, arguing that Nigerians cannot afford higher telecom costs amid rising inflation and the removal of fuel subsidies.
The House of Representatives intervention came after a motion of urgent public importance was raised by a member of the Peoples Democratic Party from Bayelsa State, Oboku Oforji during Tuesday’s plenary session.
The motion, titled “Need for the Nigerian Communications Commission not to approve the impending hike in the telecommunications tariffs,” sought to halt the tariff increase.
Oforji argued that while telecommunications companies justified the tariff hike by citing rising operational costs and the need for improved service delivery, the timing was particularly problematic given the economic hardship many Nigerians face.
He noted that inflation, which hit a record 34.6 per cent in November 2024, and the removal of fuel subsidies had already placed significant financial strain on citizens.
“The House is aware that telecom operators have been advocating for this hike for over eleven years,” Oforji said.
“However, the National Association of Telecoms Subscribers has rejected the proposed increase, describing it as insensitive and a further burden on consumers who are already grappling with economic challenges and poor network service delivery.”
Oforji emphasised that the telcos must first address long-standing issues related to poor network service before implementing a price increase. He warned that the tariff hike would only exacerbate financial struggles for many Nigerians, deepening poverty and widening inequalities.
“Affordable connectivity is a must for progress in critical sectors like digital banking, education, healthcare, agriculture and e-governance,” stressing that “informal sector workers who depend on affordable mobile data to access gig work opportunities may find it harder to stay connected.”
He further argued that small businesses “which rely heavily on affordable telecommunication for operations, marketing, and customer engagement, will face additional financial burden.”
Oforji said, “It is estimated that a 10 per cent increase in telecommunications costs would reduce small business profitability up to 7 per cent, potentially leading to the closure of businesses.”
Another lawmaker from Edo State, Billy Osawaru, called on the service providers to first improve the quality of their services before coming up with a hike in tariff.
“Why is it that when things go wrong in this country, the poor people must suffer? First, it was the electricity tariff, now it is the turn of the telecom companies. Nigerians must enjoy these services.
“In the developed world, people are not used to carrying two mobile phones but this is the practice here. The thinking is if there is no service in one, you might be lucky with the other one. I believe that this increase in tariff should wait until services improve,” he said.
NLC kicks, directs members to boycott telecoms
The Nigeria Labour Congress (NLC) has called on workers and the public to boycott the services of MTN, Airtel, and Glo over a recent 50 percent increase in tariffs.
The decision was reached following a meeting of the NLC’s central working committee (CWC) in Kogi state.
In a statement on Wednesday, Joe Ajaero, the NLC president, described the hike as “arbitrary” and demanded an immediate reversal.
He said the boycott would begin on Thursday and run daily from 11:00 am to 2:00 pm until the end of February 2025.
The union said the boycott would continue until the tariff is reverted to the previous rate pending the conclusion of discussions by the relevant committee.
“As a first step in resisting this arbitrary tariff hike, the CWC has directed that, beginning Thursday, February 13, 2025, Nigerian workers and other willing citizens shall boycott the services of MTN, AIRTEL, and GLO daily between 11:00 AM and 2:00 PM until the end of February 2025,” the statement reads.
On Tuesday, the House of Representatives asked the ministry of communications, innovation and digital economy to suspend the approval granted to telecommunications companies to increase tariff by 50 percent.
The House directed the ministry of digital economy and the Nigerian Communications Commissions (NCC) to “suspend the impending hike in telecommunications tariffs until their service improved”.
Economic impacts of the tariff hike
WITHIN NIGERIA check showed that Telecommunication tariffs in Nigeria have long been considered affordable, particularly when compared to other sectors where prices have steadily risen. However, the prevailing economic challenges, rising inflation, the removal of subsidies and increased energy costs have made it increasingly difficult for telecom companies to maintain profitability. As a result, operators have pushed for tariff hikes, a move that has raised concerns among consumers struggling to manage daily expenses. Since over two decades, Nigerians can easily buy a recharge voucher of say N100, N200 and N500 and make about twenty to thirty minutes calls.
Operators struggle for survival
The Director and Chief Economist at Proshare Nigeria LLC, Teslim Shitta-Bey, described the telecom operators’ predicament as a “Catch-22,” a situation where they are faced with two bad choices. He explained that while inflation has surged, the cost of telecom services has remained relatively stagnant for over 12 years, making the sector’s operations unsustainable.
In his words, “Inflation rates have increased significantly, and in the past 12 years, the cost of services to users has not gone up. This has become unsustainable for the telecom sector,” Shitta-Bey said.
He further noted that telecom companies, especially the major players, are operating in a high-cost environment. From soaring energy prices to the rising cost of imported equipment, maintaining quality service without passing on these costs to consumers has become increasingly difficult.
“For telecom companies, a tariff hike is seen as the only viable option to restore profitability and ensure future growth,” Shitta-Bey warned.
The Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, recently confirmed that telecom tariffs will increase, although not by the 100 per cent proposed by operators. He emphasised the government’s role in balancing consumer protection and ensuring that telecom companies remain profitable enough to continue investing in the sector.
Inflation, rising costs push tariff hike
The Secretary-General of Private Telecommunications and Communications Senior Staff Association, Okonu Abdullahi, harped on the industry’s struggles but also warned that the situation was far more complex than usual.
“While as trade unionists we oppose any tariff hike, the current circumstances are different,” Abdullahi explains.
He noted that the removal of subsidies and hikes in electricity tariffs have skyrocketed operational costs, affecting telecom companies, adding that these sectors contribute directly to the cost of telecom operations, and the rising costs have started taking a toll on workers.
“Employers are unable to adjust workers’ salaries as they too are struggling with rising costs,” the unionist adds. If the hike is not implemented, the telecom sector’s stability could be at risk.
Consumers will inevitably feel the impact, but the unionist remains confident that Nigerians will adjust to the new circumstances. The trade-off, however, remains steep: an economic strain on the public in exchange for the sector’s survival.
Growing financial burden on Nigerians
Needles to say that since the tariff hike took effect, it has continued to take some economic tolls on many Nigerians.
For many Nigerians, the prospect of higher telecom tariffs is unsettling, especially in light of the broader economic pressures they are already facing. With inflation eroding purchasing power and households struggling to meet basic needs, the added cost of telecom services could worsen financial strains.
On X, formerly Twitter, Nigerians expressed frustration over the potential tariff hike, with many questioning why telecom operators, despite their revenues, struggle to provide satisfactory services.
“FG has just approved a hike in telco tariffs. Banks are raking in billions; telcos are reporting billions yearly, even with abysmal services, especially Etisalat (9Mobile). How they still make a profit has to be studied at Harvard. Nigerians are getting poorer on a daily basis. We are doomed,” wrote @Jack_ng01.
Another user, @OpeyemiAni, pointed out that the telecom operators’ push for tariff hikes was driven by a weaker exchange rate, rising operational costs, and the need to restore profitability. “Telcos want tariff hikes because flat tariffs + a weaker exchange rate = lower ARPU in dollar terms. This + rising operating costs have crushed EBITDA margins. Tariff hikes are their push to restore profitability.”
Also, @DanielRegha wrote, “The govt approving “tariff hikes” for telecom operators is just pathetic, especially since these network providers have done nothing to improve bad network services. The gross incompetence is sickening.
Tariff hike threatens consumers
As Nigeria’s telecom sector faces mounting operational challenges, Shitta-Bey added that while a tariff hike may be necessary to save the industry, it could further strain consumers.
However, he points out the potential impact on Nigerians, particularly in the creative economy, where skit makers and musicians rely on affordable telecom services to thrive.
He warns that if the costs go up, it will directly affect users, especially students who rely on the internet for research and education. “The rise in these services will wipe out the increase in minimum wage and affect households across the country,” Shitta-Bey noted.
This price increase is provoked by the removal of subsidies, which has exacerbated inflation and the exchange rate crisis. With the pressure mounting on both telecom companies and consumers, Shitta-Bey argues that while the hike may be unavoidable, it could ultimately harm those who can least afford it.
Future outlook
Analysts contend that the telecom tariff hike is unavoidable, arguing that the current economic climate, characterized by subsidy removals and rising costs in other sectors, has left telecom operators with few options.
“Several employers did not adjust salaries because they were also struggling. If the tariff hike is not implemented, the security of the telecom sector will be at risk,” Shitta-Bey cautioned.
Although Nigerians will feel the effects of higher tariffs, analysts believe the country will ultimately adjust to the new reality. “Naturally, we will adjust to whatever circumstances we find ourselves in,” he concluded.
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