NIGERIAN telecom operators are grappling with severe economic challenges, leading them to consider a load-shedding strategy similar to that used in the power sector. This approach would involve providing telecom services selectively, as companies struggle to manage rising operational costs and push for tariff increases.
At the Telecom Industry 2.0: The Next Investment Frontier in Nigeria event, Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), highlighted the financial strain on telecom companies. He warned that the increasing costs, coupled with multiple taxes and unpaid debts from the banking sector, are making it difficult to maintain infrastructure across the country.
Adebayo also revealed that an Association of Telecom Landlords has been established to set rental charges for telecom facility deployments, adding to the more than 40 taxes and levies that telecom operators already face. He expressed concern that these financial pressures could lead to a situation where telecom services are provided only in parts of the country, as operators may be unable to service all their sites simultaneously.
The telecom industry’s struggles are further exacerbated by the government’s failure to deliver on its 2001 promise to provide 18 hours of power daily. As a result, telecom companies are forced to allocate significant portions of their budgets to power their operations.
MTN CEO Karl Toriola stressed that price increases are becoming inevitable, citing rising costs in capital expenditure and infrastructure maintenance, including the upkeep of base stations and diesel generators.
The Nigerian Communications Commission (NCC) has acknowledged the difficult operating environment but views the proposed load-shedding strategy as an attempt by telecom operators to pressure the regulator into approving a tariff hike. The NCC remains sceptical, believing the strategy is unlikely to succeed.
Meanwhile, Chief Deolu Ogubanjo, president of the National Association of Telecom Subscribers of Nigeria (NATCOMS), warned that any failure in the telecom sector would have far-reaching consequences, impacting not just communications but also banking, education, and healthcare sectors. He urged the regulator to allow telecom companies to set tariffs that reflect their high operating costs while criticising the NCC for its lack of action as the industry faces escalating financial pressures.
As Nigerian telecom operators navigate these economic challenges, the potential shift to load-shedding and the push for higher tariffs underscore the urgent need for solutions to sustain the industry and maintain essential services across the country.
