The telecommunications industry in Nigeria is navigating a delicate balance between economic viability and service affordability as it grapples with the rising costs of calls, SMS, and data services.
The Association of Licensed Telecoms Operators of Nigeria (ALTON) has issued a resounding call for a comprehensive review of the existing pricing structure in light of the ongoing economic challenges facing the country.
Evolving Pricing Dynamics
A gradual but discernible trend of upward price adjustments has been observed within the Nigerian telecommunications sector.
Against the backdrop of economic volatility and shifting cost dynamics, stakeholders within the industry are grappling with the need to strike the right balance between financial sustainability and consumer affordability.
ALTON Chairman Gbenga Adebayo drew attention to the industry’s predicament during a recent interview with The Guardian, stating:
“What we are charging, today, is certainly not sustainable. It is only a matter of time; either it will impact the scale of service or the industry’s performance and service availability. But certainly, it is not sustainable…what we have currently. We are living on borrowed time.”
The Case for Price Review
The economic challenges faced by Nigeria have played a significant role in intensifying the pressure for upward price revisions by the telecom operators. Yet, same Nigerian will be suffering these additional consequences.
The complex interplay of factors such as inflation, currency fluctuations, and increased operational costs has led to an environment where the current pricing structure no longer aligns with the industry’s financial sustainability.
As the telecom sector remains a linchpin of the nation’s economy, experts stress the need for a timely and strategic response to ensure the industry’s longevity.
Past Calls and Present Urgency
The push for pricing adjustments is not new to the telecom industry in Nigeria. Last year, industry representatives petitioned the Nigerian Communications Commission (NCC) for a substantial 40% increase in call, SMS, and data service costs.
Adebayo reinforced the urgency for change by asserting that the current pricing regime is untenable, and market forces should be given the opportunity to influence pricing.
He said, “The current pricing regime in the industry is not sustainable. We are selling below cost. It is not easy to go about that, but market forces should be allowed to determine prices.”
The economic challenges accentuated by the events of 2020 and the ongoing Ukraine/Russia conflict, which saw operational expenses surge due to elevated energy costs, have further intensified the need for a holistic review.
The Road Ahead: Balancing Affordability and Sustainability
As industry stakeholders deliberate on the path forward, experts anticipate a nuanced approach to addressing the pricing challenge.
The delicate equilibrium between maintaining affordable services for consumers while ensuring financial viability for operators remains at the forefront of these discussions.
Amid predictions of potential regulatory interventions, industry analysts underscore the importance of a balanced review process that considers the broader economic landscape.
In the face of evolving market dynamics, the telecom sector stands at a pivotal crossroads where strategic pricing decisions will play a crucial role in shaping its trajectory.
