The Nigerian Government has rejected the proposal by telecommunications companies to raise their tariff. The government asserted that elevating prices for data, voice, and text messages is not the solution to the sector’s challenges. Minister of Communications Innovations and Digital Economy, Bosun Tijani, urged the companies to explore alternative innovative approaches to alleviate cost pressures and high operational expenses.
Tijani made these remarks during the unveiling of the Nigeria Digital Economy Report on Thursday in Abuja. The report, launched by the GSM Association, scrutinises the Nigerian economy and the government’s digital transformation strategy. It explores the role of the Nigerian mobile industry in fostering economic development, presenting the latest statistics on connectivity and offering forecasts on the role of digitisation in propelling economic growth.
Earlier this year, telecommunications companies in Nigeria proposed an increase in call, data, and other service charges following several unsuccessful attempts over the past 11 years. In a bulletin issued by the Association of Licensed Telecom Operators of Nigeria and the Association of Telecommunication Companies of Nigeria, the telcos argued that current prices are insufficient to sustain their business operations. Addressing the matter, Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, highlighted that investments in the sector had begun to decline due to currency devaluation, rising business costs, fuel expenses, numerous taxations, and other factors. He emphasised that the tariff hike is unavoidable amidst the current economic challenges, stating that only a continuous influx of investments can uphold the sector.
He said, “The first point is the sustainability of the industry, the industry can only be sustained if we have a continuous flow of investments. As we speak people are cautious about investing because of the very many challenges that we have had from currency devaluation to the high cost of business, fossil fuel and the rest. The second point is the multiple regulations and taxation. Some states will say they have removed the cost of the right of way taxes but other associated charges when you add them together defeat the objective of removing the right of way taxes. We have seen about 45 of such charges different from the right of way tax being charged by various tiers of government.
“Another issue is the price review that we are talking about, it is a simple regulatory process that should have been allowed to happen, so even when the regulator granted that we could move within the approved price band, the policymaker insisted that we couldn’t do it and all of these have gained public debate and making the industry look like we are trying to extract money from the public or we are not sensitive to the people’s concern. While the government is trying to provide incentives for the public on account of what has happened to our macro economy, our sector should not be used as a palliative to solve people’s problems, we must price right to sustain the industry and to have the right investments.”
In reaction to the report, Tijani conveyed to the Mobile Network operators that raising tariffs is not a pragmatic solution and should not be considered as the remedy to the challenges confronting the industry. He made an appeal on behalf of the struggling masses, who are already contending with the current state of the economy, urging the operators to reassess their decision.
He said, “We have to deepen and address so many of these things. The solutions to these things will not come from one single thing, which is raising the tariff, that’s never going to be the solution. There are tons of other things that can be done to ensure that the business environment is conducive for the investors in this phase and the government is articulating that including the tariff conversation.
“The government may intentionally put out the right messages, the right policies and the right intentions but if everything that is coming from the association on just one issue is extremely negative, investors will not come in. Investors will not help. And if we go back to my very clear point, I’ve not seen anything more in what you are demanding that is difficult.”
He added, “It’s the approach to addressing them that I think we are not ready to do. And I’m being open about this because we must, for once, and finally, agree to address these issues positively; because they are not just affecting the companies that you represent. They are affecting the economy and the security of the nation as well.
“So we have to be extremely careful how we approach it and make sure we focus on solving it. Some of the things proposed nine months ago, if we collectively came together to address those things nine months ago, your demands would have been met. But the solution that the association is saying is only one solution. And I don’t believe anyone wants that.”