On the telecoms tariff tango

Pardon my ignorance. I would have sworn that the telecoms sector was deregulated until the federal government quickly held a meeting with the leaders of the Nigeria Labour Congress (NLC) after they served a strike notice over the approved 50 percent increase in telephone tariffs. That was when it dawned on me that unlike in the downstream petroleum sector, government is still involved in fixing prices in the telecoms. After the meeting, a committee was set up to look into the new tariffs approved by the Nigerian Communications Commission (NCC). It brought back memories of the days of fuel price hikes when unions would go on strike and government would meet with their leaders.

Pardon my ignorance again. I didn’t even know that the last time telcos increased their tariffs was in 2013. No, I’ve not been living in another world, but there are too many things to battle with in Nigeria and phone tariff was the least of my worries. As an entrepreneur in my own corner, I’ve been more bothered about diesel price, which was N200/litre 12 years ago but now N1,200. A litre of petrol that was N97 in 2013 is now north of N900. Minimum wage that was N18,000 has quadrupled to N70,000. A Lagos-Abuja flight ticket was N25,000 but is now in excess of N100,000. Operating expenses have risen dramatically for all businesses but I just didn’t pay attention to phone tariffs.

I operate mainly in the printing and publishing business. The book we used to print for N10,000 per copy two years ago now costs up to N20,000. How much are we going to sell it? What will happen if booksellers adjust the price to N22,000 and readers embark on a protest? Will the federal government order them to sell at N12,000 when it has not ordered expenses to come down? The costs of materials and freighting plus customs charges and logistics have headed for the skies in the last two years — riding on the back of the devaluation of the naira and removal of subsidies on petrol and power. What business can survive on pre-2023 prices, much less on tariffs dating back to 2013?

I also run an online newspaper, TheCable, which I founded in 2014. We are lucky we do not incur the kind of operating expenses that printed newspapers have to bear, but we are not enjoying paradise either. For one, we pay for servers and subscriptions in dollars. When we started out, the exchange rate was averagely N165/$. Now we are paying for these services at N1,500/$. Even if they charge us in local currency, we will still pay the naira equivalent. The bills for news gathering and investigations, including flights and hotels, have more than tripled since we launched. The wage bill has gone up in multiple folds. Can our advertisers reasonably insist on paying the same advert rates of 2014?

Sometimes, I wonder how printed newspapers make money in Nigeria, given the enormous costs and stress of running a printing press, importing inks, plates, blankets, spare parts and newsprint, paying high energy bills, keeping distribution vans running on Nigeria’s potholes daily — in addition to flying copies to far-flung places — and still paying salaries. It is hellish. I know what I am saying. I have spent the whole of my adult life in this industry. I went into printing and publishing business in 1996, about three years after I started my journalism career. Thank God, it has put a roof over my head and still pays my bill, but the margins are growing south as the costs head north mercilessly.

Every business makes reasonable adjustments as costs soar. The trader selling garri adjusts the price in response to costs. The mechanic adjusts charges in response to inflation. That is why I just assumed that the telcos had also been making adjustments — until I realised recently that the last time they were allowed to do so was in 2013. Wow. They have over 40,000 base stations across Nigeria, each powered by two diesel generators in a 24/7 relay race to protect the equipment from fluctuating current. How much were they spending on diesel in 2013? How much today? Is this why my village people get inconsistent service? The telcos probably think the revenue cannot buy diesel!

In truth, I never expected that anyone would think telcos are operating in a different world and are, therefore, not affected by these stinging economic realities. Do we honestly think everybody else can adjust their prices except the telcos, even though they claim their operating expenses have gone up by over 300 percent in the last two years? Airtel Africa posted a net loss of $89 million in the 2023/2024 financial year — blamed mostly on the devaluation of the naira. In 2024, MTN Nigeria, the biggest of them all, posted a N514.9bn loss in nine months. Globacom is a private company so we are not entitled to the details of their finances, but there is no way they also are not taking a hit. Same could be said of 9mobile, which is neither alive nor dead — although for a different reason.

I understand that phone services are now considered as critical to the livelihood of the poor and there is a need to make sure things are not out of their reach. However, while the price of yam can grow wild and the cost of onions can make us shed tears, the unions do not go on strike or issue a deadline for reversal. Petrol is over N900/litre and we have moved on with our lives by accepting the realities of a deregulated market and adjusting accordingly — but we are ready to spit fire and brimstone because 500MB data that was N500 in 2013 has risen to N750 in 2025. I am probably comparing apples and oranges since the telecoms’ market is somewhat different, but it is what it is.

Nevertheless, there are issues being opened up by the tariff tango. To begin with, subscribers often experience poor quality of service. It could be very frustrating. Even though I am not a tech expert, I always guess that a major part of the problem would be a lack of the needed investment in network upgrade. Operators complain about frequent fibre optic cable cuts resulting from road construction, in addition to multiple taxation, vandalism and challenges in acquiring a right of way which are impeding infrastructural upgrade. I do not wish to downplay these challenges, but the subscriber wants quality service, not quality excuse. Why should they eagerly pay more for poor services?

I see this tango as an opportunity to tackle a number of issues affecting the sector. On the one hand, the grievances of subscribers need to be addressed. If subscribers are going to pay more, they also deserve more. They don’t want to be shouting “hello hello hello” every time they make a call. On the other hand, the obstacles confronting the telcos must be addressed as well. Fibre optic cable cuts during road construction immediately impact quality of service. I have been thinking loudly that Nigeria must be one of the few countries in the world where telcos suffer these fibre cuts. Should we assume that road builders are not provided with the geo-physical maps before they start work?

I see a problem of co-ordination here. For every road construction, there should be communication between the government agency that awarded the contract, the contractor and the operators. You just can’t start excavating a road without knowing what is in its belly. The best practice across the world is to go through the geo-physical maps to know where the pipelines and ducts are laid. We do things anyhow in Nigeria, so this doesn’t really mean anything to us. I have seen water pipes being burst by earth equipment because somebody did not do their homework. Some construction companies cut fibre optic cables and don’t bother to inform the operators for remedial action.

Also, something doesn’t sound right in the Nigerian Communications Act and this is an opportunity to correct it. The law empowers the NCC to have the final say on tariffs. Section 108 says: “(1) Holders of individual licences shall not impose any tariff or charges for the provision of any service until the Commission has approved such tariff rates and charges except as otherwise provided in this Part. (2) The licensees specified in subsection (1) of this section shall provide services at the tariff rates and charges so approved by the Commission and shall not depart therefrom without prior written approval by the Commission of such proposed changes in tariff rates and charges.”

Something is wrong with this. In a truly deregulated market, it is not the job of the regulator to determine tariffs, either floor or ceiling. The NCC should be enforcing technical standards and ensuring satisfactory service. The Federal Competition and Consumer Protection Commission (FCCPC), working closely with the NCC, should ensure that there are no unfair pricing practices, such as collusion. Alternatively, there should be a pricing mechanism indexed against certain metrics, such as inflation, to avoid the kind of situation where tariffs have to be adjusted sharply rather than in bits. If government is no longer approving the prices of petrol, so why should it fix call tariffs?

Finally, since the mobile phone revolution started over 20 years ago, telcos have become the cash cows. In a sense, they have become victims of their own success. Everybody is looking up to them for revenue. Every tier of government is trying to feast on them. Some states have seized the chance to bolster their IGR. The sector has also contributed immensely to the GDP. A lot of things ride on their services today — banking transactions, security infrastructure, etc. It is, therefore, in everybody’s interest for the goose that lays the golden egg to remain alive and kicking. Tariff is just one of the needed adjustments to keep the sector in good health. Service quality is another. It can be a win-win.

AND FOUR OTHER THINGS…

AKPOTI VS AKPABIO

We are entering a new season in the “Netflix Original” screening at the Nigerian senate and starring Senate President Godswill Akpabio and Senator Natasha Akpoti-Uduaghan. In the first season, Akpabio fired potshots at Akpoti-Uduaghan, saying senate is not a “night club”. In the second season, she opened fire on Akpabio for changing the seating arrangement and taking her away from the cameras which she said help with visibility in the red chamber. On Friday, she opened a new act in an Arise interview. “Mine is the case of a student being punished by a lecturer for refusing to sleep with him,” she said. Why am I thinking this whole drama will end in suspension and apologies? Anticlimax.

VIVA LA VISA!

There was confusion over Nigeria’s visa on arrival policy recently when Hon Olubunmi Tunji-Ojo, the interior minister, said it was being scrapped. The problem is that visitors have to wait for hours at the airport to get the visa vignette. The good news, however, is that an improved process is on the way. In place of physical stickers, visitors will apply online and get an e-visa via email before arriving the country. “This aims to cut out inefficiencies, allowing Nigeria to better automate and control the inflow of travellers. This upgrade builds upon the existing online approval system, streamlining the process and enabling travellers to receive their approvals ahead of time,” Tunji-Ojo said. Lovely.

KEMI THE COCONUT

UK PM Keir Starmer aimed a loaded jibe at Mrs Kemi “Nigeria is hell” Badenoch, leader of the Conservative Party, on Wednesday. He had proposed a cut to international aid budget to beef up defence spending — an upcoming trend in Western countries in this Trumpian age. She then claimed credit for the idea, but Starmer fired back: “I’m going to have to let the leader of the opposition down gently. She didn’t feature in my thinking at all. I was so busy… I didn’t even see her proposal.” And then the clincher: “She has appointed herself saviour of the Western civilisation in a desperate search for relevance.” As they say in Warri, “Talk am go, talk am come, Saduwa na Bini man.” Ouch!

NO COMMENT

Lagos is fast becoming a case study in democratic decline. After 32 of the 40 state lawmakers voted to remove Rt Hon Mudashiru Obasa as speaker, he has refused to go. On Thursday, he conducted “plenary” with just four members. This was the same thing the APC used to condemn as an opposition party. Since Obasa thinks he was illegally removed, he should wait for the courts and not resort to self-help. Democracy can self-correct if we would allow it to work. Some people respect democracy only when the tide favours them. Meanwhile, after withdrawing the security of the new speaker, Rt Hon Mojisola Maranda, police came out to say it was only for audit purposes. Wonderful.