Current data, call tariffs not sustainable – Telcos

The current prices of calls, data, and other telecommunication services are no longer sustainable, telecom companies have stated.

This, according to them, is because of the current market realities such as increases in energy costs, inability to access foreign exchange, and more. This concern was voiced by the Chairman, Association of Licensed Telecommunication Operators of Nigeria, Gbenga Adebayo, during his industry address speech on Wednesday, at the second edition of the Nigerian Communications Commission’s Nigerian Telecommunications Indigenous Content Expo in Lagos.

He explained that even though the conversation to review prices is hard, it must be had for the industry to continue to deliver communication service in the country.

Adebayo said, “We also must have one hard conversation, I know it is difficult, but it is one we must have. The current pricing regime of the industry is not sustainable. We are basically selling below cost. It is not easy to talk about, but we cannot continue like this. We must allow market forces to determine prices. On our end, we must look at a more realistic pricing offering because today’s pricing regime is not sustainable.”

Telcos have been insisting on increasing the prices of their services following the increase in the cost of operation caused by rises in the cost of diesel and the devaluation of the naira.

In his address, the ALTON chairman congratulated the new minister of communications, Bosun Tijani, on his appointment and wished him well. However, he noted that the independence of the NCC is sacrosanct to the success of the ICT sector in Nigeria.

Adebayo opined that the politicisation of the industry has been responsible for most of the current issues besieging it. He explained that the USSD debt with banks would have cleared if political agendas had not prevailed.

He stated, “We must not subject our regulator to political agendas. The biggest problems that we have today, that we are dealing with as an industry, are some simple policy issues that have subjected to politics.

“Let me speak for a bit about the issue of USSD debt. That was a simple commercial agreement that entered into political intervention and has led us to these points. The people dealing with the problems today, both at the level of the NCC, the ministry, CBN did not create the problem.

“USSD is a provided service under a willing-buying pattern. We provide the service, and get paid for the service that was rendered. We provide the service, we don’t get paid, then we follow the rules. But when that time comes, and the policy makers intervenes, then it becomes a problem.”

He urged that the NCC must be allowed to remain independent under the new administration.

Also at the event, the Executive Vice Chairman/ Chief Executive Officer, NCC, Prof. Umar Danbatta, stated that the sector is home to two of the most valuable listed companies in Nigeria with a collective market capitalisation in excess of N10.45tn.

He also stated that the commission in 2021 and 2022, generated revenue in excess of $820m from the auction and grant of 3.5GHz Spectrum band licences to three operators for the deployment of Fifth Generation (5G) services in the country.

The EVC, who was represented by the Executive Commissioner (Technical Services), Ubale Maska, noted, “In order to sustain and further improve Quality of Service and Quality of Experience in telecommunications services in Nigeria, we must embrace indigenous content and value creation within the telecoms value chain, otherwise, increase in telecoms tariff will be inevitable.”

The EVC further added that the local SIM card industry is now worth N55bn following the ban on foreign SIM cards last year.