Telecom Operators Propose Regional Tariff Regime to Address Operational Challenges
Nigerian telecommunications operators are pushing for a shift from the current national tariff structure to a regional tariff regime, arguing that such a move would better reflect the operational realities across different states. The proposal was made at the 7th edition of the Policy Implementation Assisted Forum (PIAFo) held in Lagos, where industry stakeholders deliberated on strategies to improve telecom services amidst economic and infrastructural challenges.
A Call for Cost-Reflective Tariffs
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON) are advocating for a pricing model that factors in the varying cost of doing business in different states. They argue that states imposing higher levies, multiple taxation, and regulatory hurdles should bear the financial consequences through higher tariffs, while states with business-friendly policies should enjoy lower costs.
Engr. Gbenga Adebayo, Chairman of ALTON, emphasized the disparities in operational costs across the country.
“We may have to reconsider the issue of national tariffs and look at regional tariffs. If the cost of doing business is excessively high in a particular state due to policies or lack of infrastructure, that cost should be reflected in the service pricing,” he stated.
Rising Costs and Infrastructure Challenges
The telecom industry has faced increasing difficulties due to multiple taxation, regulatory bottlenecks, and attacks on infrastructure. Operators argue that a uniform national tariff does not adequately account for these disparities.
Tony Emoekpere, President of ATCON, reinforced this stance, pointing out that logistics and energy costs vary significantly across Nigeria.
“If it costs me extra to transport diesel from one part of the country to another to power base stations, that cost should be factored into the pricing of telecom services in that region,” he explained.
The situation is exacerbated by issues such as vandalism, right-of-way charges, and bureaucratic delays in securing permits, which increase operational costs disproportionately in certain areas.
Regulatory Implications and Consumer Concerns
The Nigerian Communications Commission (NCC), which regulates telecom pricing, recently approved a 50% tariff increase after years of industry lobbying over rising operational expenses. However, any transition to a regional tariff structure would require further regulatory approval.
While telecom operators argue that regional tariffs would enhance sustainability and service delivery, consumer rights advocates warn that the move could lead to digital inequality, where subscribers in certain states pay significantly higher fees for the same services. This could widen the digital divide and limit access to essential communication services for lower-income users in high-cost states.
Strengthening the Digital Economy
The discussions at PIAFo also touched on the broader theme of protecting Nigeria’s digital economy. Omobayo Azeez, the convener of the event, highlighted the importance of strategic coordination in strengthening the country’s critical information infrastructure. He praised President Bola Tinubu’s recent passage of the Critical National Information Infrastructure (CNII) Order as a significant step towards ensuring the resilience of Nigeria’s digital economy.
The Road Ahead
The debate over regional tariffs underscores the complex balance between operational sustainability and consumer affordability in Nigeria’s telecom sector. While telcos push for a pricing model that aligns with regional costs, regulators and policymakers must weigh the broader implications, ensuring that affordability and accessibility remain top priorities.
The NCC’s stance on this proposal will be crucial in determining whether Nigeria transitions to a regional telecom pricing structure or maintains its current national tariff regime. For now, the industry awaits regulatory deliberations that will shape the future of telecom pricing in the country.
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Telecom Operators Propose Regional Tariff Regime to Address Operational Challenges