In a recent announcement, Gbenga Adebayo, the Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), revealed that network providers in Nigeria are considering raising the prices of their services. This decision comes as a result of the mounting operational expenses, primarily attributed to a 40 percent surge in electricity tariff by the Distribution Companies (DisCos) and an upswing in fuel prices.
ALTON, which comprises major telecommunications companies such as MTN Nigeria, Airtel Africa, Globacom, 9mobile, Spectranet, Smile, and others, emphasizes that the escalating cost of operation has become an overwhelming burden for network providers. Consequently, they feel compelled to pass on the additional expenses incurred from the recent changes in electricity tariffs and fuel prices to consumers, impacting services like airtime and data sales.
To address this matter, Adebayo stated that discussions are already underway between the telecommunications companies and the Nigerian Communications Commission (NCC) to review the prices of their services. The aim is to find a solution that balances the needs of both the network providers and the consumers in light of the challenging financial circumstances.
As the potential price adjustments loom on the horizon, consumers may soon face altered pricing structures for various telecom services. The outcome of the discussions with the NCC will play a crucial role in determining the extent of the price changes and how they will impact the Nigerian telecommunications landscape.
“All these changes have had impacts on our industry. You know as an industry, these are parameters that affect the cost of the services we offer, I mean our production cost and when production costs go up, end user prices to go up,” Adebayo said in a report by The Nation Newspaper on Tuesday.
“So, if it gets to that stage, naturally we will also respond to the trend of that issue expectedly because for the industry to be sustaining, prices have to reflect the cost of production,” he noted.
Adebayo said the increase in the cost of energy; fuel, diesel and transport need to be added to the cost of services provided by the telcos, disclosing that it now costs more to transport diesel to base transceiver stations (BTS).
“For the sustainability of the industry, the tariff we charge the consumers will reflect the cost of production, in this case the cost of energy, cost of fuel, cost of diesel, and cost of transport.
“So, expectedly, prices are meant to go up,” the chairman said, adding, “What we are doing at the moment is that we are working with the regulator to follow the guideline on tariff review.”