In a bold defense of the recently implemented 50% tariff increase, the Association of Licensed Telecoms Operators of Nigeria (ALTON) has urged the public to understand the necessity of the adjustment, citing rising operational costs and economic pressures that have left telecom operators with no choice but to review their pricing structure.
The decision to raise tariffs, which has stirred up heated debates across the nation, was justified by Mr. Gbenga Adebayo, Chairman of ALTON, in an exclusive interview with the News Agency of Nigeria (NAN). He emphasized that while the hike may be unwelcome, it is essential for the long-term survival of the telecoms sector.
“We have been dealing with escalating costs for over a decade now. Diesel prices, energy costs, inflation—these have all skyrocketed while telecom tariffs have remained stagnant,” Adebayo said, explaining that the industry had absorbed these rising costs without any tariff adjustments for 12 years. He highlighted that this unsustainable model had reached a tipping point.
The tariff increase, which has drawn criticism from various quarters, including consumers and political figures, was approved after a thorough review by regulatory bodies, according to Adebayo. He added that the decision was in full compliance with the Communications Act, which governs the industry.
“The last time there was a significant tariff adjustment was over 12 years ago. In that time, we’ve had to grapple with foreign exchange volatility, fuel price hikes, and inflation, all of which have driven operational costs to unsustainable levels. The tariff review was a necessary measure to ensure the continued quality of service in the sector,” Adebayo explained.
One of the central concerns driving public backlash against the tariff increase is the financial burden it places on ordinary Nigerians, particularly in light of the economic hardship many are currently facing. Critics argue that the hike exacerbates the already high cost of living. However, Adebayo reassured Nigerians that the operators were committed to making the adjustment work in their favor in the long run.
“There is a misconception that the increase will be detrimental to consumers. This is far from the truth. We are investing heavily in infrastructure and technology to improve network quality. Over time, these investments will lead to better service, reduced downtime, and more robust networks,” he assured.
Adebayo also addressed the issue of foreign exchange instability, which he believes has had a significant impact on the cost of doing business for telecom operators. According to him, telecom contracts are typically signed in foreign currencies, and the recent fluctuations in exchange rates have created an enormous financial strain on operators. With the naira devaluing against major currencies, fulfilling these contractual obligations has become increasingly expensive, further pushing up operational costs.
“We are operating in a market where the foreign exchange rates are unstable. Many of our contracts were signed at a different exchange rate, and now, fulfilling these obligations has become much more expensive. The forex situation is a major challenge that needs to be addressed,” he said, calling for a more stable forex market to support the industry’s growth.
Smaller telecom operators have been particularly hard hit by these economic challenges. Adebayo pointed out that many of these smaller players, burdened by high debt, were on the verge of collapse. He noted that without the tariff adjustment, many of these companies might not survive.
“Some smaller players are heavily indebted, and without an adjustment in tariffs, they may not be able to continue operating. This could lead to a concentration of market power in the hands of the bigger players, which is not ideal for the competitive landscape. We must have a healthy sector, with players of all sizes, to ensure service diversity and resilience,” Adebayo stated.
While the tariff hike is aimed at strengthening the telecom industry, Adebayo stressed that it would ultimately benefit Nigerians in the long term by driving investment into the sector, improving network services, and creating jobs. He further explained that the telecoms sector has always been a key driver of economic growth, providing essential services to individuals and businesses across the country.
“The telecoms sector is the backbone of the modern economy. Without it, you cannot have the level of digitalization and connectivity necessary for economic advancement. This tariff increase will pave the way for better services, and ultimately, better economic outcomes for Nigerians,” Adebayo declared.
He concluded by acknowledging the difficult financial times the country is facing but reiterated that the situation is not unique to Nigeria or the telecoms industry. Globally, industries across sectors have been grappling with rising costs due to inflation and economic instability.
“We are not alone in this struggle. Telecom operators across the world are facing similar challenges. The difference is that we are taking proactive steps to ensure that our industry continues to thrive. The cost of doing business has gone up everywhere, and the telecoms sector is no exception,” he remarked.
The announcement of the tariff hike has already had ripple effects, with some Nigerians expressing concern about the affordability of telecom services. Consumer rights groups have called for a review of the hike, while some lawmakers have threatened to intervene in the matter, warning that telecom companies should not take advantage of the economic situation to increase prices unfairly.
Nonetheless, Adebayo remains optimistic, confident that with proper investment and a stable economic environment, Nigeria’s telecoms sector will emerge stronger from this challenge.
“We are committed to improving the services we provide and ensuring that Nigeria remains a leader in telecoms in Africa. With this tariff adjustment, we are laying the groundwork for a more sustainable, efficient, and future-ready telecoms industry,” Adebayo concluded.
