ALTON: Delay in Tariff Review, Bane of Poor Telecoms Investments in 2024

Emma Okonji

The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo has stated that there was a decline in telecoms investments in 2024 as a result of the delayed review of telecoms tariff.

Adebayo said such delay, negatively affected revenue generation of telecoms operators in 2024, and they were unable to invest significantly in network expansion in 2024.  

“So I can say that 2024 was actually a year of subsidy, where telecoms operators had to subsidise their services for everybody. We provided subsidised services and that is not commendable because it is not sustainable,” Adebayo said.

In 2023, telecommunications companies attracted substantial in Foreign Direct Investment (FDI), infrastructure development, including the expansion of network coverage, which played a crucial role in improving service quality and coverage, according to the 2023 Subscriber/Network Performance Report, released by the Nigerian Communications Commission (NCC).

However, telecoms investments dropped significantly in 2024, a development that has been blamed on the delayed review of telecoms tariff, despite the push by telecoms operators for100 per cent increase in telecoms tariff to boost industry sustainability.

According to the report, Foreign Direct Investment in the form of capital inflow into Nigeria’s telecoms industry in 2023 was $134 million, while telecoms industry contribution to the Nigerian Gross Domestic Products (GDP) increased from 13.55 per cent in the fourth quarter of 2022 to 14.00 per cent in the fourth quarter of 2023.

Also, the total number of towers deployed as at December 2023 stood at 39,356, which included towers owned by TowerCos as well as other operators within the telecoms ecosystem. The total number of Base Stations deployed in 2023 was 137,992, while On-Land fibre optics deployment (not-leased) in Kilometres (Km) was as 83,254.50km. As at December 2023, mobile operators deployed a total of 299,976.06km of Microwave Radio Links as against the 288,947.48km of Microwave Radio Links deployed 2022, which was an increase of 3.82 per cent.

Telecoms operators, through its umbrella body, ALTON, had in April 2022, wrote the NCC, demanding for a 40 per cent hike in voice and data tariff, to enable them cope with the high cost of delivering telecoms services across the country.

Although NCC is yet to accept the demand, the operators kept pushing for tariff hike, and have recently come up with a new demand of 100 per cent hike in telecoms tariff, to enable them provide quality service in 2025 and beyond.

Just as the call for tariff hike has been vehemently resisted by different industry groups representing the interests of telecoms consumers, ALTON has however warned that any further delay in reviewing the current tariff plan, could lead to collapse of the telecoms sector in 2025.

“If telecoms tariff is not reviewed upward this year, the industry will again suffer poor investments in 2025, and this could lead to total collapse of the telecoms industry,” Adebayo told THISDAY.

“I must say it again with even greater urgency that we are in the last days for the survival of this sector. If nothing is done, we might begin to see in the new year, grim consequences unfolding, such as service shedding; and operators may not be able to provide services in some areas and at some times of the day leaving millions disconnected. There will be significant economic fallout, because businesses will suffer from a lack of connectivity, stalling growth and innovation,” Adebayo further said

Worried about the unfolding development, the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, last week in Abuja, assured telecoms operators of possible tariff hike, but insisted the hike would not be as high as 100 per cent, as currently being proposed by telecoms operators.

“You have seen over the past weeks that there have been agitations from the telecoms companies to increase tariffs. They are requesting for 100 per cent tariff increase, but it will not be 100 per cent. The NCC will soon come up with a clear directive on how we will go about it.

“We want to strike the balance as a government, to protect telecoms consumers, and also protect and ensure that the telecoms operators can continue to invest significantly,” the Minister said.