Telecom
NCC’s Report Says Telcos Operating Cost up by N256Bn
The operating costs of telecommunication companies in Nigeria rose from N1.4trillion in 2020 to N1.66trillion in 2021, showing an increase of N265.25billion, according to ‘2021 Subscriber/Network Data Annual Report’ by the Nigerian Communications Commission (NCC).
According to the report “Total operating cost for the mobile network operators increased from N1,395,000,000,000 in 2020 to N1,658,235,000,000 at the end of 2021. This illustrates an increase of 18.74 per cent from the figure reported in 2020.”
Recall that the Association of Licensed Telecommunications Operators of Nigeria (ALTON) had earlier said that the rising cost of diesel had impacted negatively on their operational costs, while asking the Federal Government for special interventions.
The group asked NCC to approve a 40 per cent increase in the cost of calls, SMS and data.
ALTON in a letter to the Nigeria Communication Commission (NCC), titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ said the decision to hike charges was based on an increase in energy costs, which has raised their operating expenses by 35 per cent.
Their proposal means the price cap on phone calls will increase from N6.4 to N8.95, while SMS costs will also increase from N4 to N5.61.
Gbolahan Awonuga, head of operations, ATLON, said the increase in charges was long overdue.
“We depend on diesel as our main energy source to keep our power stations running because we don’t rely on the national grid. And diesel price was moved from N220 per litre to N750 per litre.
“Since 2003, we have not increased our charges and this is nothing we can do except to start retrenching our staff to cut down costs.
“This is why we are appealing to the NCC to re-consider and make amends to the charges to reflect the prevailing realities,” he said.
Telecom
Suspected Lakurawa Terrorists Kill 3 Telcoms Workers in Kebbi
Terrorists belonging to Lakurawa group have reportedly killed three staff of a leading telecommunication firm.
The insurgents were said to have invaded a construction site at Gumki village in Arewa Local Government Area of Kebbi State.
The bandits reportedly attacked a construction site at Gumki village in Arewa Local Government Area of Kebbi State when their victims were installing a surveillance mast for the Nigeria Immigration Service and killed them and one other person who is yet to be identified.
There was a conflicting report of which organization the victims belonged as the police said three of the deceased were Airtel staff and the residents identified them to be Immigration staff.
A staff of Sir Yahaya Specialist Hospital however corroborated the villagers, saying the three victims brought to the hospital were Immigration staff.
But SP Nafiu Abubakar, police spokesperson, said four persons lost their lives, one indigene and three staff of Airtel.
He said from the report the police got, Bello M Sani, state Commissioner of Police, alongside with CIS Muhammad Bashir, Comptroller, Nigeria Immigration Service, Kebbi State Command, Lawali mobilized their men to the scene to evacuate the corpses to Sir Yahaya Memorial Hospital in Birnin Kebbi.
He said his CP has deployed additional tactical teams to the area and charged them to decisively deal with the suspected bandits operating in the area.
He said the CP also had meeting with people in the area and appealed to them to always assist the police and other security agencies with relevant information for their prompt response.
Telecom
Nigeria Has World’s Most Affordable Data Costs – GSMA
Nigeria has an average data cost of $0.38 per gigabyte, making her the most affordable countries globally and one of the cheapest in Africa for mobile data services.
United States averages $6 per gigabyte and South Africa with $1.77 per gigabyte rank the highest globally and in Africa respectively.
According to the GSMA, Nigerian data costs, as a percentage of Gross National Income (GNI) per capita, are among the lowest across Africa.
The reports by the body lends weight to telecom operators advocacy for tariff adjustments to address economic pressures threatening the sector’s sustainability.
The GSMA report, titled “The Role of Mobile Technology in Driving the Digital Economy in Nigeria,” highlighted Nigeria’s competitive data pricing, which is significantly lower than other African nations, such as Kenya ($0.59 per gigabyte), Ethiopia ($0.68 per gigabyte), and South Africa ($1.77 per gigabyte).
By contrast, the United States averages $6 per gigabyte, underscoring Nigeria’s advantage in offering cost-effective connectivity.
The cost of mobile data in Africa varies greatly by country and region.
Data costs can refer to the cost of mobile data or the cost of acquiring, maintaining, and using business data.
In 2023, the average cost of 1 GB of mobile data in Sub-Saharan Africa was $3.31, while in Northern Africa it was $0.86.
Telecommunications operators in Nigeria have been requesting some policy changes as well as tariff rebalancing to enable them deliver support to the Government’s digital economy objectives.
They have called for the simplification and improvement of the Right of Way (RoW) charging and administration process, harmonised across the country
According to them, all government authorities (at national and sub-national levels) should apply the national maximum RoW fee of N145 per/LSQM adopted by the National Economic Council (NEC) for the deployment of fibre across all states in Nigeria.
There should be a single point of contact in each state for the RoW application process while the duration for the approval process should be digitalised and limited to a maximum of one month.
Simplification and reduction of the tax burden on the mobile sector
On tariff, recall that the Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON) had urged the Nigerian Communications Commission (NCC) to consider reviewing tariffs upward to address rising operational costs.
Nodding in agreement, Bismarck Rewane, chief executive officer, Financial Derivatives, said the proposed tariff hike by telecommunications will help reduce inflation in the country.
He said it would help to reduce inflation because it increases productivity, stressing that the price of MTN shares went up by 10% to 220.
Rewane reiterated that investors had already factored that in, adding that they are expecting a lot of good goodies.
“But more important to think about is the fact that because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal. So, we heard from the policymaker, Bosun Tijani, who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service.
“We also heard from the operators, MTN that they are all revving up. So in all, there are economic benefits because of increased output and productivity. Two, policymakers are aligned because they want this to lead to a moderation in inflation,” he added.
He further said that it was not a bad deal and re-echoed the minister’s comment that the tariff hike will not be 100 per cent.
“Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50% which is fair after so many years of static changes,” Rewane added.
Telecom
Bismarck, Economist Claims Planned Tariff Hike by Telcos Will Reduce Inflation
Bismarck Rewane, chief executive officer, Financial Derivatives, has said the proposed tariff hike by telecommunications will help reduce inflation in the country.
Rewane made this statement on Channels Television’s Business Morning on Thursday.
Recall that Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON) had urged the Nigerian Communications Commission (NCC) to consider reviewing tariffs upward to address rising operational costs.
On January 3, Karl Toriola, chief executive officer (CEO), MTN Nigeria, said telcos want a 100 percent tariff hike.
According to Rewane, who previously supported the plans for a tariff hike, the move will make the sector more sustainable.
He said it would help to reduce inflation because it increases productivity, stressing that the price of MTN shares went up by 10% to 220.
Rewane reiterated that investors had already factored that in, adding that they are expecting a lot of good goodies.
“But more important to think about is the fact that because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal. So, we heard from the policymaker Bosun Tijani, who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service.
“We also heard from the operators, MTN that they are all revving up. So in all, there are economic benefits because of increased output and productivity. Two, policymakers are aligned because they want this to lead to a moderation in inflation,” he added.
He further said that it was not a bad deal and re-echoed the minister’s comment that the tariff hike will not be 100 per cent.
“Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50% which is fair after so many years of static changes,” Rewane added.
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