Why we want 40% increase in call, data tariffs – Telcos

Association of Licensed Telecommunications Operators of Nigeria (ALTON) has disclosed that the rising cost of operation in the country prompted its request for an increment in the cost of services offered by its members.

This was made known by the Head of Operations, ALTON, Mr. Gbolahan Awonuga, in an exclusive interview with Nairametrics on Wednesday.

The request, which was made to the Nigerian Communications Commission (NCC) by ALTON, if granted, will lead to about a 40% increase in the cost of calls, data, and SMS.

What the telcos are saying

  • The umbrella body of the telecom operators in the letter urged the telecoms regulator to undertake a review of the telecoms service tariff to reflect the present economic reality just as it was recently done in the power sector.
  • The telcos said: “Given the state of the economy and the circa 40% increase in the cost of doing business, we wish to request for an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.
  • With respect to voice an SMS cost, ALTON respectfully requests the commission to consider a mark-up approach to address the upward price adjustment desirable for the industry. We have enclosed herein and marked as ‘Annexure 1’our proposal in that regard.
  • “For data services, we wish to request that the commission implements the recommendations in the August 2020 KPMG report on the determination of cost-based pricing for wholesale and retail broadband service in Nigeria. Excerpts from the report, are attached and marked ‘Annexure 2’ to provide a further illustration,” it added.

What you should know

Awonuga explained that the letter was submitted to NCC last week and the regulator’s response is still being expected. A source at the NCC also confirmed that the letter has been received and is being reviewed for a decision.

In the letter, the telecom companies said there had been a 40% increase in the cost of doing business in the nation. According to them, the telecommunication industry has been financially impacted following the nation’s economic recession in 2020 and the effect of the ongoing Ukraine/Russia crisis. They said this had resulted in an increase in energy costs, increasing their operating expenses by 35%.

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