Nigerian regulator approves 50% telecom tariff hikeNigerian regulator approves 50% telecom tariff hike

The Nigerian Communications Commission (NCC) has approved a 50% tariff hike after requests from telecommunications operators in the West African country.

The decision comes as the sector faces mounting financial struggles on the back of the devaluation of the naira and increasing operational costs in Africa's most populous nation.

Telecom operators like MTN and Airtel had reportedly requested a 100% tariff increase, but the NCC said it capped the increase at a maximum of 50% of current tariffs. The regulator said the decision considered "ongoing industry reforms that will positively influence sustainability" in the country. Nigeria's telecom tariff rates have remained unchanged since 2013.

"The approved adjustment is aimed at addressing the significant gap between operational costs and current tariffs while ensuring that the delivery of services to consumers is not compromised," the NCC said.

"These adjustments will support the ability of operators to continue investing in infrastructure and innovation, ultimately benefiting consumers through improved services and connectivity, including better network quality, enhanced customer service, and greater coverage," the regulator added.

Nigerian's communications regulator has approved its first tariff hike in over a decade. (Source: wirestock on Freepik)

Currency devaluations and rising inflation in Nigeria have impacted the earnings of operators MTN and Airtel over the past few years, leading to the review of tariffs.

Related:Nigeria slams WhatsApp exit threats, refutes tariff hike rumors

In August 2024, the NCC denied rumors that it had approved higher telecom tariffs, but has now approved the increases "in response to prevailing market conditions."

Striking a balance

The regulator's decision is likely to be met with negative sentiments from Nigerian consumers, but the NCC said it was trying to strike a balance between protecting telecom consumers and ensuring the sustainability of the industry.

It said this includes the thousands of indigenous vendors and suppliers who form a critical part of the ecosystem.

The NCC said it had recognized the concerns of the public and the decision was made after extensive consultations with key stakeholders across the public and private sectors.

"The NCC recognizes the financial pressures faced by Nigerian households and businesses and remains deeply empathetic to the impact of tariff adjustments. To this end, the Commission has mandated that operators implement these adjustments transparently and in a manner that is fair to consumers," it said.

Operators are also required to educate and inform the public about the new rates while demonstrating measurable improvements in service delivery.

Related:MTN swings to H1 loss as Nigeria currency devaluation hits earnings

Nigeria's mobile market

Nigeria has Africa's biggest mobile market with almost 140 million mobile subscriptions at the end of 2024, according to statistics from market research company Omdia. This is despite declines over the past two years due to the deactivation of millions of unregistered SIMs to meet regulatory requirements.

In comparison, Egypt had 128.5 million mobile subscriptions in 2024; South Africa had almost 114 million; Ethiopia had had almost 88 million; and Kenya had over 69 million subscriptions at the end of last year. Omdia forecasts that Nigeria will have over 292 million mobile subscriptions by 2029.

Nigeria has four key mobile operators in the country. The biggest is MTN with an estimated 78.1 million mobile users at the end of 2024. Airtel had 52.1 million users, Glo Mobile had almost 8.6 million and 9Mobile had just 1.1 million, Omdia market intelligence shows.