Nigerian Telecom Rates to Rise: Check New Tariff Plans Here

Nigerians now refer to their constant price increases as the “Hike Economy,” which sums up their way of life. Millions of people are burdened by this situation, which is fuelled by rising prices for necessities like telecommunications. The “Hike Economy” poses a threat to the stability and advancement of a society already struggling with high inflation and poverty, and it is not only an economic issue. Innovative and compassionate solutions are needed to address this situation and lessen the burden on businesses and households.

Nigeria’s telecommunications industry under the Ministry of Communications and Digital economy through the Minister, is about to undergo major improvements after the Minister of Communications and Digital Economy Dr. Bosun Tijani announced that a telecom service pricing increase would shortly be approved.

Nigeria saw one of the highest rates of inflation in three decades in 2023–2024, reaching a peak of 36.4 percent by November of that year. Millions of people fell into poverty as a result of this spike in inflation, which also made necessities much more expensive. The price of a 50kg bag of rice, for example, increased from ₦40,000 in early 2023 to over ₦100,000 by late 2024, signifying the “Hike Economy’s” larger struggle. Companies in the telecom industry are preparing price increases as a result of depreciating currency and growing energy expenses.

Telecommunications firms justify proposed tariff increases by pointing to the depreciation of the naira and increased energy expenses. Despite their validity, these reasons are insufficient to explain why prices hardly ever fall during times of economic stability. For example, 5G technology was first hailed as a revolution in connectivity, but its deployment has come with high expenses that have been passed on to customers. Customers, who suffer the most from unchecked price hikes, become distrustful as a result of this inconsistency.

These rises have a wide-ranging effect. Expenses for a family paying ₦30,000 a month on cellular services could increase to ₦37,000 to ₦40,000, further taxing already limited funds. This raises concerns about the coherence and alignment of the government’s policies, given it has committed to bringing inflation down to 15% by 2025.

Although the precise rate of increase has not yet been determined, it is anticipated to be between 40% and 50% based on the assumption outlined in the preceded paragraph.

It is anticipated that this change would result in better service quality, including increased network coverage, quicker internet speeds, and fewer dropped calls.

The Quality of Service (QoS) Regulations, which were published in late 2024, will provide telecom operators with the resources they need to improve their infrastructure and satisfy the requirements.

Call costs might range from ₦11 to around ₦15.40 per minute, SMS charges from ₦4 to ₦5.60, and data plans like the 1GB bundle from ₦1,000 to ₦1,400 if a 40–50% tariff structure is authorized. This would be the first significant price change in more than ten years if it were authorized.

For years, the telecom sector has been under tremendous operational and financial strain, which has been made worse by Nigeria’s difficult economic climate. The highest level of inflation in years, 34.6%, has reduced consumer purchasing power and increased business expenses.

Prices for diesel, which make up around 30% of Telcos’ operational expenses, have sharply increased. Telecom providers spent about ₦71.3 billion a month on diesel between January and August 2024, for a total of ₦570 billion in eight months. Diesel alone increased Airtel Nigeria’s monthly fuel expenses to ₦28 billion, the company disclosed.

Along with fuel costs, Telcos also have to deal with ongoing infrastructure deterioration, including fibre-optic cable outages, which cause service interruptions and large losses. Airtel Nigeria reported 7,742 cable outages in just six months, with an average of 43 outages each day. An estimated ₦35.4 billion was lost by the sector as a result of these disruptions in 2023 alone.

The problem has gotten worse due to currency devaluation, which has increased the cost of importing vital parts like batteries and fibre-optic cables. Profitability has been significantly impacted by these growing operating expenses. For example, MTN Nigeria, the nation’s largest operator with nearly 70 million subscribers, reported a large loss after tax of N514.9 billion in 2024, while Airtel Nigeria’s second-quarter report showed a $31 million profit after tax, which was offset by $80 million in foreign exchange and derivative losses.

Tariff changes have become essential to Telcos’ existence. The last significant tariff increase was 12 years ago, and the industry has been lobbying for adjustments for years. The recent agreement by the Minister of Communications and Digital Economy indicates that the government acknowledges the need for an increase, even if it is less than the 100% that the operators initially demanded.

The QoS Regulations 2024’s stringent regulatory requirements are also linked to the possible increase. In addition to halving the number of dropped calls, telecom carriers must increase network availability, internet speeds, and call quality by 50%. Heavy fines, including ₦5 million for non-compliance and an extra ₦500,000 per day for unresolved concerns, would be imposed if these targets are not met.

The market has reacted favourably to the possibility of a tariff revision in spite of these obstacles. Shortly after the minister’s remarks, MTN Nigeria’s stock increased 10% to ₦220, indicating market confidence that a rise would allow operators to stabilize operations and enhance services.

However, the increased tariffs will raise the cost of living for consumers. For business, education, and communication, a large number of Nigerians depend on reasonably priced telecom services. These services will become more costly due to the anticipated increase, which could further widen the digital divide.

The effectiveness with which telecom operators carry out the promised enhancements and successfully convey these advantages to customers will determine whether or not this pricing adjustment is successful. In order to defend the higher prices, Nigerians would look for observable benefits like quicker internet speeds, improved network availability, and fewer dropped calls.

Accountability must be ensured in large part by the Federal Competition and Consumer Protection Commission (FCCPC) and the Nigerian Communications Commission (NCC). These organizations can guarantee that the higher prices provide genuine value for Nigerian consumers by keeping an eye on adherence to the QoS Regulations and provide channels for customers to complain about subpar service.

The emphasis must continue to be on making sure that these hikes result in substantial enhancements in service delivery as Nigerians get ready for increased communication expenses. To guarantee that customers receive value for their money, telecom operators must give infrastructure investments top priority, and regulators must enforce compliance. The sector can only attain the long-term viability required to prosper in an increasingly digital environment by finding this equilibrium.

In the end, the rate increase presents a chance to reset consumer and operator expectations. Although maintaining connectivity would become more expensive, the prospect of improved service gives hope that the expenditure will be justified. The telecom industry may become stronger, more effective, and better able to meet the demands of an expanding digital economy with careful implementation and accountability.