Telecom Operators Warn of Industry Collapse Without Tariff Adjustment

Samuel Mobolaji

Nigeria’s telecommunications sector is on the brink of financial collapse as operators warn that failure to implement the proposed 50 per cent tariff hike could cripple the industry, leading to widespread network failures that may take years to recover from.

Despite rising operational costs, telecom tariffs have remained stagnant, creating an unsustainable financial environment for service providers. The situation has been further complicated by the planned mass action by the Nigeria Labour Congress (NLC) opposing the price adjustment.

At a forum with telecom CEOs over the weekend, Chief Corporate Services and Sustainability Officer at MTN Nigeria, Tobe Okigbo, painted a grim picture of the industry’s future if pricing issues remain unaddressed. He noted that while essential goods like tomatoes, bread, and potatoes have surged by over 100 per cent in the past year, telecom tariffs have remained unchanged.

“The conversation should not be about whether to increase prices but whether we want a telecom sector that continues to drive Nigeria’s economy. If operators can no longer sustain services due to financial strain, restoring the industry will be immensely costly,” Okigbo stated.

Unlike electricity, where individuals can rely on generators during outages, telecommunications has no alternative backup. A network collapse would disrupt businesses, financial transactions, and everyday communication. The proposed 50 per cent tariff increase, Okigbo insisted, is not about profit but survival—necessary to keep networks running, improve service quality, and extend coverage to underserved rural areas.

“The last cost study conducted in 2021 recommended a 100 per cent increase, but the government only approved 50 per cent. However, even this approved hike has yet to be implemented,” he explained.

Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, warned that continued financial losses could push the industry into insolvency, further shrinking the number of operators.

“The telecom sector is the superhighway of the economy. If it collapses, the entire economy will suffer. Many operators have already exited the market due to financial pressures. Without urgent action, the sector could hit a tipping point from which recovery would be extremely difficult,” Adebayo cautioned.

He dismissed arguments that telecom prices should remain artificially low due to economic hardship, stating that operators cannot subsidise challenges in other sectors. “If prices stay unsustainably low, service quality will deteriorate, and ultimately, the industry will collapse,” he warned.

Following government approval for a 50 per cent tariff increase, telecom operators have submitted adjustment proposals to the Nigerian Communications Commission (NCC). Chief Customer Relations and Experience Officer at MTN Nigeria, Ugonwa Nwoye, confirmed that the regulatory process is underway. Customers should expect phased price adjustments within the next few weeks, with full implementation likely by February.

Operators have promised transparency in communicating the new rates while ensuring minimal service disruptions, but the industry insists that without immediate action, Nigeria’s telecom sector faces an existential crisis.