The core reason is that Nigeria’s telecom sector, while heavily reliant on imported infrastructure, is not an exporter of goods but rather, an importer of equipment from countries like China, the U.S., and parts of Europe.

Tony Emoekpere, president of the Association of Telecommunication Companies of Nigeria (ATCON), said, “It won’t affect the industry much because the operators import everything they use directly. They don’t export.” 

There is actually more at play than just the tariff’s direct impact. Emoekpere pointed out that the sector’s vulnerability lies in the national economic dynamics, specifically those affecting foreign exchange and inflation.

The recent 50% increase in telecom service tariffs, a decision made to counteract the high costs of operations, directly connects to the overall economic climate. 

Inflation, alongside a weakened naira, has placed huge pressure on telecom operators, pushing them to make difficult pricing adjustments. 

This price hike aims to stabilise operations while promoting investments in infrastructure—something that could be compromised if the U.S. tariff negatively impacts the country’s larger economic space. 

Gbenga Adebayo, president of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), stresses a particular issue: “There is no hardware that we export, but there might be issues with charging international calls by local operators. If the VAT on calls in the US increases, local operators will need to adjust to the rates.”

Even with the tariff not directly targeting the telecom sector, Nigeria’s non-oil exports, which include agricultural products and industrial raw materials, are now facing a more challenging global market. 

This, in turn, could shrink foreign exchange earnings, further depreciating the naira and fuelling inflation. The result could be a tougher environment for telecom operators who depend on the importation of equipment priced in foreign currencies.

The U.S. tariff’s impact on Nigeria’s exports could cost the country as much as $814.8 million annually, according to estimates. While Nigeria’s foreign exchange reserves have recently climbed to $23.11 billion, the highest in three years, these reserves remain vulnerable to external shocks. 

With telecom operators fighting with rising import costs, this buffer might not be enough to shield them from the compounded effects of inflation, energy costs, and currency depreciation.

Adding to the issue, many Nigerians are venting discontent over the 50% tariff hike. Labour unions, including the Nigeria Labour Congress (NLC), have threatened industrial action, accusing telecom operators of taking advantage of the economic crisis. 

The public’s annoyance comes not just from the high costs but also from ongoing issues with poor network quality despite operators’ claims of improved service.

The government’s response to these external pressures is important. Though the U.S. tariff appears to have little direct impact on the telecom sector, the cascading effects on foreign exchange and inflation may present a different story. 

There’s a sense of cautious positiveness within the industry, with some hoping the government will negotiate with the U.S. to ease the stress on Nigerian exporters and, by extension, telecom operators. This could involve forging new trade agreements or diversifying markets for Nigerian goods.

However, even as the industry walks through these external trade dynamics, the challenges within Nigeria’s telecom sector are a lot. Poor service delivery, limited infrastructure development, and an increasingly price-sensitive market all contribute to the difficulties operators face in balancing profitability with customer satisfaction. 

Gbenga Adebayo says, “If the VAT on calls in the US increases, local operators will need to adjust to the rates”—reiterating the challenges in global trade dynamics that could ultimately affect Nigerians on the ground.

In this environment, telecom operators will need to tread carefully, managing their costs while striving to meet customer expectations. With consumers already on edge due to the tariff hike, any further economic turbulence could push the sector closer to a tipping point.

The post 14% U.S. Tariff: Not Direct Telecom Blow, But the Fallout Could Be Worse appeared first on Tech | Business | Economy.

The 50% tariff hike was first implemented by MTN Nigeria just a week earlier. Telecom operators are revising their prices following the Nigerian Communications Commission (NCC) approval of a 50% tariff increase on January 20, 2025.

Under the new pricing structure, Airtel’s most affordable data plan has been revised. The 1.2GB plan previously priced at ₦1,000 has been replaced with 2GB for ₦1,500, representing a 50% increase. 

The adjustments extend to other plans as well. For example, the 3GB plan now costs ₦2,000, up from ₦1,200 for 1.5GB, and the 4GB plan now stands at ₦2,500, an increase from the previous 3GB at ₦1,500. 

The 8GB plan now costs ₦3,000, a rise from ₦2,000 for the former 4.5GB package. Larger bundles have also been impacted, with the 10GB plan now priced at ₦4,000, replacing the earlier 6GB plan that cost ₦2,500. 

Other hikes include the 13GB plan at ₦5,000 (previously 10GB at ₦3,000), 18GB for ₦6,000 (up from 15GB at ₦4,000), and 25GB for ₦8,000, replacing the previous 18GB plan at ₦5,000.

Airtel has also revised its call rates, introducing a new flat rate of 25 kobo per second, which means a one-minute call now costs approximately ₦15, an increase from the previous ₦11 rate. 

However, the telco has left certain plans untouched. Notably, the 5GB weekly plan priced at ₦1,500 remains the same, providing some relief for customers seeking shorter-term options.

Raising tariffs aims to help telcos maintain service quality and encourage investment in infrastructure. According to Airtel, the new rates will help the company continue to invest in network improvements, ensuring better service, more reliable connectivity, and a wider coverage area for its customers. 

The operator has stressed that the tariff increase will also contribute to enhanced customer service, better network quality, and greater access to innovative solutions.

Even with these assurances, there are talks that the new pricing structure may place additional stress on Nigerian consumers. 

The recent tariff hikes are foreseen to further stretch household budgets, particularly as the country’s inflation and costs of living keep increasing. Experts have warned that the increases could result in reduced usage by consumers, who may struggle to keep up with the higher costs.

Bismarck Rewane, the chief executive officer of Financial Derivatives Company, pointed out that while the price hikes may benefit the telecom operators in the short term, they could lead to reduced consumption, potentially affecting the long-term sustainability of the changes. 

He explained that the tariff increases would likely weigh heavily on consumers, especially those already feeling the economic impact of rising inflation. “The hike promises to benefit operators but will put additional strain on consumers’ pockets, possibly resulting in reduced usage from consumers,” Rewane noted.

Before Airtel, MTN Nigeria was the first to implement the hike in tariffs and the telco received complaints from its subscribers. MTN Nigeria had raised three of its data plans by more than 50%, which led to a flurry of objections on social media and other platforms. 

While the telco defended its move, explaining that the hikes were within the NCC-approved limits and part of efforts to remove subsidies from special plans, it eventually issued an apology to its customers in response to the outcry.

Airtel’s tariff adjustments have met with mixed reactions from users, many of whom are concerned about the affordability of telecom services, especially for those who rely heavily on mobile data for work, education, and communication. 

The move aims to help operators resolve challenges of sustaining operations in the market, while also coping with inflation and high costs. However, the telecom industry is one of the most profitable sectors in Nigeria, with a growing base of mobile phone and internet users, despite the challenges caused by increasing tariffs.

While Airtel and MTN may have their reasons for these hikes in tariffs, the obvious remains that consumers are bearing the brunt of these increases, despite service quality and infrastructure offsetting the financial aspect for telcos.

The post Airtel Increases Data, Call Tariffs with Prices Ranging from ₦1,500 for 2GB to ₦8,000 for 25GB appeared first on Tech | Business | Economy.

The adjustment, authorised by the Nigerian Communications Commission (NCC), comes after over a decade of unchanged pricing in the industry, despite high inflation impacting the costs of operations.

The statement from President Bola Ahmed Tinubu Media Centre revealed that the approval, however, does not mandate an immediate increase in tariffs. “It is equally important to highlight that this approval does not mean automatic increases in tariffs. Operators are still free to maintain their current rates if they find them sustainable.”

The Presidency also noted that the approved tariff hike is well below the over 100% increase originally requested by service providers, pointing to the government’s goal to balance the needs of the telecom sector with the economic realities faced by Nigerian households and businesses.

The statement highlighted the role the telecom industry plays in Nigeria’s economy, supporting millions of individuals and businesses that depend on uninterrupted connectivity for daily activities. 

“The telecom sector is a critical pillar of Nigeria’s economy, supporting millions of users and businesses that rely on uninterrupted connectivity for daily activities. Without a sustainable pricing model, the sector risks stagnation, with operators unable to maintain or upgrade infrastructure to meet increasing demands. By approving this modest adjustment, the NCC has ensured that operators can remain viable while creating room for innovation and improved service delivery.”

The Presidency pointed out that, without a sustainable pricing model, operators would face difficulties in maintaining and upgrading their infrastructure to meet growing demands. This, in turn, could lead to stagnation in the sector, sabotaging the quality of service.

It was also stressed that the NCC has introduced strict regulatory measures alongside the tariff adjustment, aimed at simplifying tariff structures and curbing exploitative billing practices. 

New sanctions for operators who fail to meet service obligations will ensure greater accountability and improved customer service. The Presidency reaffirmed that these changes aim to ensure that both operators and consumers benefit from a more transparent and fair telecommunications environment.

The adjustment comes after the NCC announced the approval on January 20, due to high costs of operations and the need for the sector’s sustainability. 

While the increase is seen as a necessary move to support telecom operators, the National Association of Telecommunications Subscribers (NATCOMS) has threatened to challenge the decision in court. 

The association argues that the tariff hike was approved without sufficient consultation with key stakeholders, particularly the subscribers who will ultimately bear the cost.

Nonetheless, the Presidency remains firm on its stand, presenting the 50% tariff adjustment as an initiative for the telecom industry to thrive, meeting the demands of digitalisation.

The post Presidency Defends 50% Telecom Tariff Hike, Emphasising Need for Sector Sustainability, Tighter Regulations appeared first on Tech | Business | Economy.

The move, which has led to objections from various quarters, was authorised by the Nigerian Communications Commission (NCC) to address expensive costs of operations in the sector.

Deolu Ogunbanjo, president of NATCOMS, said the decision was made without adequate consultation with stakeholders. He described it as an unfair burden on Nigerians already facing economic difficulties. Speaking in Lagos, Ogunbanjo said, “This will affect everyone from the biggest industry to the smallest company, such as the Point of Service (POS) operators. It will increase operational costs.”

While acknowledging the challenges faced by telecom operators, Ogunbanjo suggested a more moderate increase of 5% to 10% would have been sufficient. He also proposed alternative strategies for raising funds, such as Initial Public Offerings (IPOs), to reduce the financial burden on subscribers. 

“Operators can allow Nigerians to invest in their companies through IPOs rather than imposing such a steep tariff increase. A 50% hike is unacceptable,” he added.

NCC Defends Decision

In its defence, the NCC argued that the tariff adjustment was necessary to sustain the industry. According to a statement by its Director of Public Affairs, Dr Reuben Muoka, the commission approved the increase after extensive consultations with stakeholders. 

It noted that some operators had requested a 100% hike but the NCC capped the adjustment at 50% to strike a balance between industry sustainability and consumer protection.

“These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefiting consumers through improved services and connectivity,” the NCC stated. 

The commission also emphasised the need for transparency, mandating operators to educate the public on the new rates and ensure measurable service improvements.

Mixed Reactions to the Increase

Subscriber groups and consumer advocates have condemned the hike. The Association of Cable TVs, Internet and Telecom Subscribers of Nigeria (ATCIS-Nigeria) described the increase as punitive and ill-timed, given the rising cost of living. 

ATCIS President Sina Bilesanmi accused the government of prioritising corporate interests over consumer welfare, saying, “This increase will further strain the finances of struggling Nigerians.”

Ogunbanjo reiterated a similar warning, stating that the hike could force many small businesses to shut down. He reaffirmed NATCOMS’ plan to file a fresh lawsuit to challenge the decision, describing it as a “provocative and disproportionate” measure.

On the other hand, industry stakeholders have defended the need for higher tariffs. The Association of Telecom Companies of Nigeria (ATCON) argued that the adjustment was overdue, given the high costs of operations and the long gap since the last tariff review.

ATCON President Tony Emoekpere noted that while the 100% hike requested by telecom operators might seem excessive, the 50% approval reflects current economic realities. “The delay in addressing tariff rates over the years made this adjustment inevitable,” he explained.

The tariff increase is expected to impact data, calls, and SMS charges, raising issues about affordability for many Nigerians.

While the NCC has assured that the adjustments will support better network quality and broader coverage, consumers are calling for greater transparency and fairness in implementing the new rates.

The post NATCOMS, ATCIS-Nigeria, and Consumer Advocates Unite Against 50% Tariff Increase appeared first on Tech | Business | Economy.