Leading telecom operators in Nigeria have threatened to implement load shedding measures in response to the Nigerian Communications Commission’s (NCC) reluctance to address their demands for a tariff hike.

Load shedding is a deliberate shutdown of telecom services in a part or parts, generally to prevent the failure of the entire system when the demand strains the capacity of the system.

Telecom operators, citing the rising cost of operations, including the increased prices of diesel, infrastructure maintenance, and a depreciating naira, have called on the NCC to approve a tariff increase to help mitigate their financial burdens.

For instance, MTN, with a subscriber base of 79.7 million as of December 2023, reported a first loss after tax of N137 billion since its 2019 listing on the Nigerian Stock Exchange in 2023. The telco incurred FX losses of N740 billion ($815.79 million at N907.1/$).

Airtel Africa, which had 50.9 million subscribers in Nigeria as of March 2024, reported a loss after tax of $89 million for its full year ended March 2024, primarily due to FX headwinds in Nigeria and Malawi. It lost $1.26 billion to derivative and FX exposures, with $770 million attributed to the naira’s devaluation.

This has led to dwindled investment in the telecoms sector, Carl Cruz, chief executive officer of Airtel Nigeria, stated, adding that, “The devaluation of the Naira moving from N420/dollar to N760/dollar in a month’s time, to about N1500/dollar today, had indeed affected telecoms industry who rely heavily on importation of infrastructure to grow the sector.’

In the same vein, Karl Toriola, CEO, MTN Nigeria, said operators are reluctant to invest, simply because of the high operating cost and the devaluation of naira, among other issues that have marred the growth of the sector.

According to him, “the telecoms sector in Nigeria is now in an intensive care unit (ICU) gasping for breath, while calling on the government to intervene. The sector is facing a lot of challenges of which if urgent action is not taken, it will dry up. The truth is that investors are not going to come to invest in the sector if the fundamental issues are not addressed. To rescue the sector from collapsing, there is a need to increase prices of telecom services.”

Despite repeated pleas, the regulatory body has remained silent on the issue, causing frustration and uncertainty among industry players.

The situation has escalated, with telecom operators warning that if the tariff hike is not granted, they may be forced to adopt load shedding—a strategy that would involve rationing network availability during certain periods. This could lead to disruptions in mobile and internet services, affecting millions of Nigerians who rely on these services for communication, business, and access to essential information.

“With the high operating cost and the delay on the part of the government to allow operators to increase prices of telecoms services, operators may adopt the method of load shedding in the sector.

“We may decide to give network to some areas, while others may not have network, just to cut down operating cost for survival of the industry,” Engr. Gbenga Adebayo, chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), told Leadership.

Meanwhile, the NCC has yet to release an official statement addressing the operators’ demands or the looming threat of service disruptions.

Airtel Africa Plc has announced the commencement of the second tranche of its $100 million share buy-back programme. This latest tranche, valued at up to $50 million, follows the completion of the first tranche and is expected to conclude on or before 19 December 2024.

The Group Company Secretary, Simon O’Hara in a notice filed on the Nigerian Exchange Limited (NGX) on Monday, explained that it had partnered with Citigroup Global Markets Limited (“Citi”) to execute the buy-back, with Citi acting as a riskless principal and making independent decisions regarding the purchase of shares.

He explained that the sole purpose of the buy-back programme was to reduce the capital of the Company. “As such, all shares purchased under the buy-back programme will be cancelled.”

The statement further read, “Any purchases of ordinary shares under the buy-back programme by Citi will be carried out in accordance with certain pre-set parameters set out in the agreement with Citi and Company purchases will be in accordance with (and subject to the limits prescribed by) the Company’s general authority to repurchase ordinary shares on the London Stock Exchange granted by its shareholders from time to time (at the annual general meeting on 3 July 2024, shareholders gave the Company authority to purchase a maximum of 374,141,187 ordinary shares).

“Chapter 9.6 of the Financial Conduct Authority’s UK Listing Rules and the provisions of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended).

“Purchases may continue during any closed periods of the Company during the engagement period.”

Telecom subscribers, under the aegis of Association of Telephones, Cable TV and Internet Subscribers of Nigeria (ATCIS), recently kicked against the push by Nigeria mobile network operators (MNOs)  to increase end user tariff on calls, data and others.

They say it is akin to putting the cart before the horse, insisting that customer experience on the network should precede any tariff hike.

The MNOs had, through the Association of Licensed Companies of Nigeria (ALTON), warned about likely service disruptions in the country should they be restricted to charging a tariff that does not cover their cost of operation, citing micro and macro economic headwinds in the country.

But ATCIS at a press conference in Lagos at the weekend, vehemently opposed the proposed tariff hike arguing that acceding to such a demand by the Nigerian Communications Commission (NCC) will inevitably increase the burden of economic reform in the country.

Sina Bilesanmi, president, ATCIS, described the timing of the proposed tariff increase as “most insensitive” given the prevailing economic challenges faced by Nigerians.

“We are concerned that this strident call for a tariff hike is most unwelcome. It will impoverish telecom subscribers further, considering the realities on ground.

“We see it as most insensitive as it will impoverish our members the more in view of the realities on ground.

“The telcos have blamed the rising cost of diesel for powering their base transceiver stations (BTS) as one of the major reasons for the current clamour for tariff hike. We say no to any hike at this time with declining service quality.

“We say no to any hike without the consultation of consumer advocacy bodies such as ours. We reject any tariff hike without improved service quality. We align with the position of the NCC on this. The telcos shouldn’t resort to subtle threats and blackmail to get the approval of the NCC to hike tariffs,” he said.

He highlighted the significant contribution of the telecom sector to the nation’s gross domestic product (GDP) but emphasized that this does not justify burdening consumers with increased costs.

“While we understand the industry faces challenges, we believe any tariff increase will place an undue burden on consumers, many of whom are already struggling with the current economic situation,” ATCIS president added.

ATCIS urged the NCC to intervene, saying: “We urge the telecom companies to show restraint in implementing these increases and to explore ways to minimize the impact on vulnerable consumers, most of whom are our members, the many voiceless Nigerians.”

ATCIS also demanded transparency from telecom companies, stating: “We call for full transparency on the justification for this increase and the expected benefits to consumers.

“We demand that telecom companies improve service quality in line with the increased tariffs which the experiences of our members on the network have shown.”

Also speaking at the event, Mr. Sam Oladipupo, welfare manager at ATCIS, underscored the need for fair billing practices and open stakeholder consultations before any tariff hike.

“Subscribers are tired of arbitrary charges and unexplained deductions. There should be transparency in billing and customers should be fully informed about any changes to their plans. The N4 we pay for SMS should not even be in the first place,” he said.

Oladipupo also called on telecom operators to reward loyal customers and show empathy to subscribers facing economic hardship. “It is important for telecom companies to recognize the value of their long-standing customers and support those struggling financially, especially at this time that most homes are struggling to make ends meet,” he added.

ATCIS vowed to continue advocating for fair pricing, quality service, and the protection of consumer interests in Nigeria’s telecom sector just as it also emphasized its commitment to working with the telecom industry and the regulator to find solutions that protect consumers while ensuring the sustainability of the sector.