Prices of data, calls and SMS might be increasing soon

As telecom companies are considering revisiting the present price framework for calls, SMS, and data, Nigerians may soon have a new issue to gripe about. The current structure is no longer viable, according to the Association of Licenced Telecoms Operators of Nigeria (ALTON).

The chairman of ALTON, Gbenga Adebayo, said in an interview “What we are charging right now is definitely not sustainable. In reality, it is only a matter of time before it has an effect on the scope of the service or the performance and accessibility of the sector. But the situation as it is now is unquestionably unsustainable. We are squandering our time.

Adebayo declined to say whether Nigerians would pay extra for calls, data, and SMS, but his answer isn’t totally reassuring. He said the business was reviewing the situation and will make a decision shortly. He reiterated, nevertheless, that the existing pricing scheme had passed its course. That also suggests a possible rate increase already.

At the 2023 Nigerian Telecommunications Indigenous Content Expo, ALTON’s chairman discussed the issues facing the telecom industry. He pointed to regulatory interference as one of the issues and also blamed the sector’s challenges on the rising price of diesel.

To keep customers using services like broadband and SMS, telecom companies mainly rely on fuel to power their base stations. They are large users of diesel, consuming about 40 million litres per month. As a result of the proposed value-added tax (VAT) acceptance, the price of diesel increased to N650 per litre.

Due to the recent elimination of subsidies on petroleum products, the product now retails for between N900 and N950 a litre. It has also been challenging for telecom operators to maintain their current business model as a result of another government decision, the unification of the foreign exchange rate. Unsurprisingly, this approach caused MTN’s profit to decline by 29.24%.

Adebayo went on to say that telecom operations have been badly damaged by the country’s economic downturn brought on by COVID-19 and the conflict between Russia and Ukraine.

Impact of a possible increase in telecom rates

In the previous year, ALTON asked for a 40% increase in call, SMS, and data rates. One of the main causes was the rising expense of doing business. The NCC issued an order to telecom carriers that same year directing them to roll back the pricing increase. The regulator asserts that the decision was carried out without its consent.

The average Nigerian is about to experience a tariff increase, and one can only speculate about how this will impact them. After all, the cost of transportation, food, and other necessities has dramatically soared since gasoline subsidies were eliminated. Can they accept higher SMS, data, and voice rates? There will be plenty who disagree.

To reduce their operational costs and carbon emissions, telecom businesses have recently been urged by the NCC to think about investing in renewable energy options. Of obviously, operational expenses are the most important demand. By doing that, their reliance on fuel would be greatly reduced.

However, the government is also involved in this. It should make significant investments to guarantee that the raw materials required for green energy products are readily available. In order to encourage adoption among telecom industry participants, it could also think about giving subsidies for renewable energy sources.

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Samson Ayodeji

I am literally obsessed with technology. I love writing about the latest news in technology in different markets, segments and sectors across the world.

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