NCC Approves 50% Tariff Hike: Call and SMS Costs Set to Rise
The Nigerian Communications Commission (NCC) has approved a 50% increase in telecommunications tariffs, potentially raising the average cost of phone calls to ₦16.5 per minute. This adjustment, announced on Monday, is expected to significantly boost telecom operators’ revenues, with projections estimating over ₦6.74 trillion in earnings by 2025 if call volumes remain stable.
Projected Revenue Impact
According to NCC’s 2023 Subscriber/Network Performance Report, total outgoing calls amounted to 205.3 billion minutes, while incoming calls reached 203.2 billion minutes, bringing total local call traffic to 408.5 billion minutes. Based on this data:
• MTN is expected to be the biggest beneficiary, with projected revenue exceeding ₦4 trillion, accounting for over 60% of total industry earnings.
• Airtel is projected to generate approximately ₦1.78 trillion.
• Glo is estimated to earn ₦536.2 billion.
• 9mobile is expected to generate ₦105.6 billion, while smaller operators like Smile and Ntel are set to earn ₦5.7 billion and ₦13.1 billion, respectively.
Increase in SMS Tariffs
Alongside call tariffs, SMS rates will also increase from ₦4 to ₦6 per message. Based on 2023 SMS traffic data, the industry is expected to generate ₦137.84 billion in 2025, with MTN again leading the market:
• MTN: ₦100.72 billion from 16.79 billion SMS.
• Airtel: ₦26.26 billion from 4.38 billion SMS.
• Glo: ₦8.1 billion from 1.35 billion SMS.
• 9mobile: ₦2.75 billion from 458 million SMS.
• Smile: ₦7.36 million from 1.2 million SMS.
Despite the shift towards over-the-top (OTT) messaging platforms like WhatsApp and Telegram, SMS remains a key revenue stream for telecom operators.
NCC Justification for Tariff Increase
The NCC defended the tariff adjustment, stating that it was necessary due to rising operational costs and inflation. The Commission emphasized that the increase, though significant, is lower than the 100% hike initially requested by telecom operators.
“The adjustment, capped at 50%, takes into account ongoing industry reforms that will ensure sustainability while protecting consumers,” the NCC stated.
The changes align with the 2013 NCC Cost Study and the newly issued Guidance on Tariff Simplification (2024).
Consumer Reactions and Possible Legal Action
Telecom subscribers and consumer rights groups have strongly opposed the increase, arguing that it will further strain Nigerians amid economic difficulties.
• Adeolu Ogunbanjo, President of the National Association of Telecoms Subscribers, rejected the new tariffs, stating that anything beyond a 5-10% increase would be unacceptable.
• He warned that the association might take legal action if the tariff hike is enforced without addressing consumer concerns.
• Sina Bilesanmi, President of the Association of Telephone, Cable TV, and Internet Subscribers of Nigeria, noted that telcos must improve service quality within two weeks of the tariff implementation or face lawsuits.
Implementation Timeline and Next Steps
The new tariff structure is expected to take effect in February 2024. However, stakeholders will be closely monitoring service improvements and may challenge the decision if quality remains unchanged.
With the 50% increase, the estimated costs for telecom services will be:
• Calls: ₦16.5 per minute (up from ₦11).
• SMS: ₦6 per message (up from ₦4).
• 1GB of data: ₦525 (up from ₦350).
As the February rollout approaches, telecom operators, regulators, and consumer groups remain engaged in discussions over the impact of the price hike on both business sustainability and consumer affordability.
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