By Dinesh Balshingh

As Nigeria continues its journey towards becoming a digitally driven economy, reliable telecommunications services remain the backbone of our collective progress. At Airtel Nigeria, we are committed to delivering world-class connectivity to millions of Nigerians, enabling economic growth, empowering businesses, and enhancing lives.

We understand that the future technology needs of the country, as ushered in by the highspeed 5G era of AI, Cloud computing, Data science applications, and Blockchain, should be directing significant investments towards building a resilient network. However, the industry faces significant challenges that require a closer look as we strive to maintain the high standards that our customers deserve.

Increased Intensity of Investments: The increasing demand for digital services across sectors such as education, media, banking, transportation, and manufacturing has come with an increased demand on telecom capacity.

Upgrading networks to deliver more data capacity is key to a sustainable future. To help ensure that the Nigerian economy keeps pace with the global improvements in technology and communications while supporting the aspirations of consumers, we also take on the responsibility of executing new technology and system upgrades as well as improved security. Data security is now more than ever a priority as more and more people upload personal information online.

All of these require significant investments which are sourced from the international markets at costs denominated in US Dollars. In the past three to four years, for instance, the dollar has gone from exchanging for about N500 to over N1,600.

This more than three-fold increase in foreign exchange conversion exponentially increases the cost of investments required to run a good quality network.

In addition to this unprecedented hike in capital expenditure, the operating costs have surged dramatically, with operating expenses rising by over 300% in the last 18 to 24 months alone.

While several critical areas of the business are impacted, I would, for expediency, focus on three of those areas: Rising Energy Cost, Infrastructure Challenges, and a Commitment to Quality Service.

Rising Energy Costs: Powering telecommunication infrastructure requires significant energy resources. Energy is the single largest operating cost for running a network. With increasing global energy prices and while efforts are ongoing to fully stabilize power supply in Nigeria, Airtel Nigeria and other operators in the sector are incurring soaring costs to keep networks running seamlessly.

Infrastructure Challenges: The industry continues to grapple with rampant fiber cuts and vandalization of critical infrastructure. These incidents not only disrupt services but also demand substantial investments to repair and maintain facilities.

Commitment to Quality Service: Despite these challenges, Airtel Nigeria has remained steadfast in ensuring quality of service. From expanding 4G and 5G networks to meeting growing demand in urban and rural areas, we have painstakingly absorbed the rising costs of these obligations to avoid compromising the customer experience and ensuring Nigerians, regardless of their location, have access to mobile communication and remain connected to the digital economy.

Telecommunications operators have worked tirelessly to sustain services despite keeping tariffs unchanged for the last 10 years. While tariffs have remained static for over a decade, the economic realities necessitate a review to ensure the sustainability of services hence our recent application to the government for tariff adjustment which if approved will be a step towards addressing this imbalance.

It is not a decision taken lightly but one borne out of the need to guarantee continued investment in network expansion, technology upgrades, and improved service delivery.

The telecommunications sector is pivotal to Nigeria’s ambition to become a digital economy leader in Africa. Meeting this aspiration requires operators to make substantial investments in network infrastructure, spectrum acquisition, and innovative solutions. These investments come at a cost, one that must be shared proportionally to ensure long-term viability.

At Airtel Nigeria, we remain resolute in our commitment to:

Delivering Quality Services: As the government continues to monitor operators’ compliance with service quality standards. Airtel is dedicated to surpassing these benchmarks, ensuring customers experience uninterrupted and superior connectivity.

Driving Economic Growth: By expanding our network and enhancing digital inclusivity, we are enabling the government’s economy turnaround agenda and fostering opportunities for all Nigerians.

Being a Reliable Partner: Despite industry challenges, we are steadfast in our role as a trusted partner in Nigeria’s digital transformation journey.

While significant tariff adjustments have become warranted for the sustainability of the industry, Airtel has always been sensitive to affordability and understand that the price adjustments must be done gradually to support our customers’ financial positions.

“We believe that an approval of revised tariffs will empower operators to invest in capacity, expand coverage to underserved areas, aim for advanced security on the networks, and improve service quality and network availability while ensuring that Nigeria remains competitive in the global digital landscape.

As we navigate the present imperatives together, we urge all stakeholders, including customers, regulators, and partners to recognize the importance of building a resilient telecommunications ecosystem. Airtel Nigeria remains committed to delivering unmatched value while supporting the nation’s economic development.

Dinesh Balsingh is the Managing Director/CEO of Airtel Nigeria.

National Association of Telecoms Subscribers (NATCOMS), a telecoms subscriber body, has warned Nigerian Communications Commission (NCC) not accede to demands by telecommunications companies in the country to hike tariff, insisting that such increase would unleash further hardships on its members.

Chief Deolu Ogunbanjo, president, NATCOMS said in statement that the group in a recent emergency meeting over the planned tariff hike of telecommunication services, unanimously voted against any tariff hike.

Ogunbanjo, said telecoms services are taxable services under the Value Added Tax Act.

The Act was amended in 2019 by the Finance Act of that year to raise the tax rate from five per cent to 7.5per cent which was 50per cent increment and the increment has been borne by the consumers of rateable telecom services.

“That increment brought about untold hardship to our members many of who have been forced to cut back on their telecom requirements.

“As if that was not bad enough, the Federal Government got the National Assembly to enact the Finance Act of 2020. Section 37 of the Act amended Section 21 of the Customs, Excise Tariff etc. (Consolidation) Act by imposing an excise duty charge on Telecommunication Services. The then president, President Muhammadu Buhari by an order prescribed five per cent as the rate of the excise duty charge, chargeable for telecommunication services. The additional tax burden was greeted with public outcry and this association, at the prompting of our members, challenged the excise duty charge in court, in the case of Registered Trustees of National Association of Telecommunications Subscribers (NATCOMS) V MTN Nigeria Communications Limited and Others – Suit No: FHC/L/ CS / 189) 2023 on the ground of double taxation which is illegal and unconstitutional.

NCC and other Federal Bodies are parties to the suit and the Federal Government as represented by the Federal Inland Revenue Service (FIRS) entered an appearance and filed processes opposing the suit. The case is now pending before Hon.  Justice Aluko, sitting at the Lagos Division of the Federal High Court, and the case is slated to come up in the court on the 13th March, 2025,” Ogunbanjo said.

Mafab Communications, a Nigerian telecommunications company that acquired a 5G license in 2021, is set to begin operations by the end of the first quarter of 2025, according to Adebayo Onigbanjo, chief operating officer of the company.

Onigbanjo who shared this update with TechCabal, this launch will mark the first time Mafab’s services will be available commercially, nearly three years after the company entered the 5G market.

The company plans to roll out its 5G services with 102 operational sites located in Kano and Abuja.

Subscribers will need to purchase routers to access the network. Mafab is also working with multiple vendors to develop these sites in phases as part of its strategy for deployment.

Mafab Communications obtained its 5G license on the same day as MTN.

However, while MTN launched its 5G services within eight months, Mafab, being a newer entrant, experienced delays in deploying its network due to insufficient telecom infrastructure.

These challenges were further exacerbated by the company’s delay in receiving its Unified Access Service License (UASL) and numbering plan, which was only granted in July 2022.

This situation led Mafab to seek an extension from the Nigerian Communications Commission (NCC), postponing its initial rollout deadline to January 2023.

Following its launch event in January 2023, the company began promoting the sale of 5G routers on its website.

However, buyers quickly discovered that they could not activate the service, as uncovered by TechCabal.

Consequently, the sale of these routers has been suspended while the company focuses on completing its infrastructure buildout.

Despite the early stage of the 5G market in Nigeria, these delays have put Mafab at a disadvantage, leaving it to catch up with competitors like MTN and Airtel, particularly in Lagos, the country’s bustling commercial hub where most 5G subscribers are currently concentrated.

Although Mafab is actively working on its Lagos sites, the company has yet to announce when services will officially launch in the city.

According to Onigbanjo, foreign exchange (FX) fluctuations have posed a significant challenge, leading to higher rollout costs than initially projected—a difficulty faced by many telecom operators.

Since its commercial introduction in August 2022, Nigeria’s 5G market has experienced steady growth, spearheaded by MTN Nigeria.

By October 2024, 5G services accounted for 2.33% of the nation’s internet subscribers, with MTN Nigeria commanding a 79% market share and Airtel Africa holding roughly 20%.

Mafab’s anticipated rollout in Q1 is expected to further drive 5G adoption, particularly in cities beyond Lagos and Abuja.

The company has prioritized building robust infrastructure and extending its coverage in Kano and Abuja to support broader access to 5G services.

According to Onigbanjo, this includes developing a Radio Access Network (RAN), transport systems, and intelligent networks designed to connect various user devices—ranging from smartphones to IoT gadgets—to the company’s core telecom network.