After a six-year campaign by Nigeria’s mobile network operators, including MTN, the country’s government has approved an increase in mobile service prices for the first in over a decade.
As hinted at last week by Nigeria’s minister of communications, innovation and digital economy, Bosun Tijani, the hike tops out at half of the 100% that mobile providers had been lobbying for.
“The adjustment, capped at a maximum of 50% of current tariffs, though lower than the more than 100% requested by some network operators, was arrived at taking into account ongoing industry reforms that will positively influence sustainability,” the Nigerian Communications Commission (NCC) said in a statement on Monday.
The tariff hike request is part of an ongoing effort to right-size an industry devastated by inflation and a historic currency devaluation.
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 government says it recognises 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.
“These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefiting consumers through improved services and connectivity, including better network quality, enhanced customer service and greater coverage,” said the authority.
“The NCC recognises the financial pressures faced by Nigerian households and businesses and remains deeply empathetic to the impact of tariff adjustments.”
To this end, the commission said had mandated that operators implement the price adjustments “transparently and in a manner that is fair to consumers.” Operators are also required to educate and inform the public about the new rates “while demonstrating measurable improvements in service delivery.”
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.
Despite not receiving the full 100% they had been hoping for, mobile will likely welcome the move.
Earlier in the month, MTN Nigeria CEO Karl Toriola highlighted to Business Day the urgent need for a tariff increase.
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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