Again, Telecom Companies Screech over High Cost of Operations, Seek Increase in Tariff

Emma Okonji

Telecommunications companies under the aegis of the Association of Telecoms Companies of Nigeria (ATCON), have again lamented the high cost of doing telecoms business in Nigeria, insisting that urgent steps must be taken by the Nigerian Communications Commission (NCC) for upward review of telecoms tariff across networks.

Members of ATCON who spoke while reviewing the state of telecoms industry in Nigeria during the Annual General Meeting (AGM) of the association held in Lagos, insisted that telecoms companies cannot continue to bear the burden of high cost of doing telecoms business in Nigeria, without shifting the cost to telecoms consumers through tariff increase.

According to them, telecoms companies risk the danger of closing down telecoms businesses if the regulator does not address the issue of tariff hike.

President of ATCON, Tony Izuagbe Emoekpere, who opened the discussion on the state of telecoms industry in Nigeria, said there was need to protect telecoms operators in order to sustain telecoms business in Nigeria, adding that the discussion with the industry regulator for tariff increase in the telecoms industry is ongoing.

Immediate past President of ATCON, Ikechukwu Nnamani, said supply cost for telecoms equipment has tripled over the years, while telecoms companies continue to bear the extra cost.

According to him, other sectors of the economy have increased cost of service delivery several times, but the telecoms sector has not reviewed its general service-pricing framework upward in the last eleven years, primarily due to regulatory constraints.

“Telecoms companies are already operating at a loss due to high cost operations, and should we continue to operate at a loss, it will not be long for telecoms operators to go out of business,” Nnamani said.  

Other members who spoke said the cost of doing telecoms business has gone exponential. According to them, electricity bill for a single telecom company operating in Lagos, jumped from N800,000 monthly to N10 million monthly and cost of diesel to run generators has gone up in the last six months. They also said the cost for the supply of imported telecoms equipment has gone so high and the telecoms companies continue to bear the high cost alone.

While some of the members were of the view that the federal government should offer special subvention for telecoms companies, others insisted on upward review of telecoms tariff, adding that cost must be shifted to telecoms consumers who are the direct beneficiaries of telecoms services offered by telecoms companies.

They cited other industries that have increased cost of services and products, like Entertainment industry (DSTv), Petroleum industry (fuel), Energy industry (electricity), transportation, confectionary among others, insisting that there is need for telecoms companies to also increase tariff.    

Another issue that was raised while reviewing the state of telecoms industry in Nigeria was the mass movement of Nigerian workers to Europe and other parts of the world, a development they said, was already affecting the Nigerian workforce and the Nigerian economy. ATCON members therefore called for capacity building in terms of training in order to replace those that are leaving the country.

Mohammed Rudman who proffered solution to the challenge, said constant capacity building would address the issue. According to him, the Internet Exchange Point of Nigeria (IXPN), where he works, has a training facility that can accommodate 30 persons at once. “Every month, we embark on training and re-training of our workforce to replace those that are traveling out of the country in their large numbers in search of better job opportunities. The trainings are either physical or virtual,” Rudman said.