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Current tariff regime discourages investment in telecom sector – ALTON  




The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said that the current tariff regime in the telecom sector is discouraging further investments and limiting the operator’s capacity to deploy more infrastructure.

Chairman of ALTON, Engr. Gbenga Adebayo, who stated this in a presentation to the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, argued that the current tariff plan fixed by the telecom regulator is too low compared with the rising cost of operations. While insisting on the need for an upward review of telecom tariffs, Adebayo said the rising cost challenge is now threatening the survival of telecom businesses.

According to him, other highly regulated sectors such as power and insurance have implemented price increases over the last year.

He noted that the pricing regulatory framework in the telecom sector has not been reviewed to account for changes in macroeconomic conditions and reflect the current cost profile of operators.

While noting that the current price of services as pegged by the Nigerian Communications Commission (NCC) is unsustainable, the ALTON Chairman said:

The ALTON Chairman appealed to Minister Tijani to issue policy guidance to the NCC to commence the implementation of targeted interventions starting with an upward review of the Mobile Termination Rate for voice services and the institution of an interim adjustment of the industry floor price for voice and data services pending the conclusion of a cost study and issuance of a substantive pricing regulatory framework in this regard.

The umbrella body of telecom operators in Nigeria commended the recent Federal Government’s announcement of the suspension of the 7.5% VAT on diesel prices for the next 6 months.

According to Adebayo, this is a welcome development coming from the fact that in August 2023, the operators were paying, on average, N854.32 per litre, compared to the lower cost of N786.88 per litre recorded in the same month of the previous year.

He added that the 7.5% VAT on diesel had pushed pump prices to N900 at least and N950 at the maximum across Nigeria.

Adebayo, however, appealed to the government to make the suspension of the 7.5% VAT permanent and beyond the 6 months already granted. If this is done, “the impact on the industry and the economy will be positively felt by all,” he said.