NCC clears telcos to hike tariffs, sets limit

The Nigerian Communications Commission (NCC) has yielded to the intense pressure from telecommunication companies (telcos) to raise calls and data costs, PREMIUM TIMES can authoritatively report.

Except there is a last-minute change in plans, the NCC will announce today (Monday) its approval for the telcos to increase their tariffs, a top NCC official confided in one of our editors.

For a long time, telcos have been pressing the NCC for approval to charge subscribers higher prices due to what they described as rising operational costs, particularly the high cost of diesel used to power their stations.

Industry sources familiar with the matter told PREMIUM TIMES on Monday that telcos consume approximately 40 million litres of diesel monthly to power their stations, resulting in significant operational costs.

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Additionally, the sources said telcos require more financial investment to acquire specialised software and hardware upgrades to maintain and improve their services.

The companies also claimed that last year’s naira devaluation imposed severe financial difficulties on them.

The NCC’s approval will allow telcos to raise their charges within the existing tariff range of N6.40 to N50, which was set in 2013. The exact new tariff rates are expected to be announced later today.

The telcos had initially requested between a 100 and 300 per cent increase in tariff, but the NCC approved a 50 per cent increase to help keep the companies afloat.

“They have been running at losses,” an official source familiar with the matter said. “We have to do something so they do not collapse.”

He said the decision to increase tariffs is necessary to alleviate telcos’ financial pressures while allowing them to maintain and improve their services.

“Industry relies on sophisticated and specialised software and hardware. Telcos are making losses. We have a problem, and urgent action is needed. In the past year, we have pushed and pushed.

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“The industry needs cash flows. MTN recently raised money from commercial papers at 20 per cent. If we do not take decisive action, imagine a Nigeria without connectivity.”

The Nigerian telecommunications sector recorded a major milestone with establishing the Nigerian Telecommunications Limited (NITEL) in 1985, with the merger of two government entities, the telecoms arm of the Post and Telecommunications (P&T) department under the Ministry of Communications and the Nigerian External Communications (NET).

As the country’s sole telecommunications provider, NITEL offered services to mostly organisations and affluent Nigerians.

However, decades later, the Nigerian government began liberalising the telecommunications sector, allowing private companies to enter the market. This led to the establishment of several telecom companies, including MTN Nigeria, Glo Mobile, Airtel and 9mobile, among others.