Telecom operators in Nigeria, including MTN, will soon get some relief as the country’s government prepares to allow an increase in mobile service prices after a six-year campaign by the industry.
However, the hike is set to be about half of the 100% that mobile providers are lobbying for.
During an appearance on Channels Television, Nigeria’s minister of communications, innovation and digital economy, Bosun Tijani, suggested that the tariff hike should held at a threshold of between 30% and 60%. The final increase has yet to be determined.
Tijani said the government recognised the need for the tariff rise as a way to spur greater investment in telecoms infrastructure and service, all the while trying to protect economically vulnerable consumers.
“A sector that contributes 14-18% of GDP is an important sector. It is important that we keep this sector alive. We can't allow it to crash,” he said.
“At the same, it is important, for us, that our people can access meaningful connectivity.”
Tariffs have remained unchanged for 11 years in Nigeria. In 2019 call tariffs stood at about 3.3 US cents, dropping to about 1c at present. Over the same period, mobile telecom revenue in Nigeria is expected to fall to about $3.05bn this year from $6.39bn in 2019.
The NCC oversees prices for the industry, with operators not allowed to make changes without the regulator’s permission.
The tariff hike request is part of an ongoing effort to right-size an industry devastated by inflation and a historic currency devaluation. When asked what the threshold for the increase should be, if not 100%, the minister said: “It shouldn’t be more than 30%-60%.”
Tijani and his government are using this opportunity to bundle the increases with conditions such as imposing minimum quality of service requirements on operators. One of these is that people should have access to minimum internet speeds of 25mbps [megabits per second] in urban areas, while in rural areas, this has been set at 10mbps.
The Nigerian government has also decided to also start investing in telecoms infrastructure, currently working on a 90,000km fibre project. The intention is to reduce investments costs for private sector players, with the aim of lowering the possibility of even higher price increases by operators, to ultimately protect consumers.
“If you look at any progressive country, they've had to invest, on the government’s side to plug the gap where people don't have access,” the minister said.
Like many other companies operating in Africa’s largest economy, MTN has been a casualty of the devastation caused by the Nigerian naira’s more than 90% plunge since mid-2023.
The group dipped into the red at the halfway stage of its financial year, the first time the telecom major has reported a loss since 2016, as the further devaluation of the naira and the conflict in Sudan weighed on results.
Earlier in the month, MTN Nigeria CEO Karl Toriola highlighted to Business Day the urgent need for a tariff increase, stating that the industry had formally requested a 100% rise in prices.
“The current pricing structure is unsustainable and hampers the ability to deliver the quality of service that customers expect,” he said.
Despite facing a cocktail of headwinds in Nigeria, Toriola expressed optimism for the future — particularly for 2025 — suggesting that “if the regulator permits the adjustment in pricing, it would enable operators to enhance their services. For MTN in particular, this growth would be supported by initiatives to expand coverage in rural areas and increase the penetration of 5G broadband services.”
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