Will Nigeria’s telecom regulator approve tariff hike request?

Nigeria's telecommunication sector is at a critical juncture as stakeholders push for a tariff hike to combat ongoing challenges. The Nigerian Communications Commission (NCC) has initiated consultations with industry players regarding a potential tariff increase, sparking debates on the feasibility and impact of such a move. Tajudeen Ibrahim, Director of Research and Strategy at Chapel Hill Denham, shed light on this contentious issue in a recent interview on CNBC Africa. The discussion centered around the delay in implementing cost-reflective tariffs, with the recent example of Starlink increasing its monthly subscription by 97% fueling concerns among industry players. Ibrahim highlighted the industry's failure to adapt to macroeconomic challenges, including currency devaluation, rising inflation, and regulatory directives such as the NCC's mandate to link all SIM cards to National Identification Numbers (NIN). Amid these challenges, Ibrahim emphasized the necessity of tariff hikes for the telecom sector to thrive and attract investments. He noted that the sector's growth is essential for economic development, as it historically contributed significantly to Nigeria's GDP. However, recent hurdles, such as limited access to foreign exchange impacting capital expenditure, have hindered the industry's potential. Despite facing obstacles, Ibrahim remained optimistic about the sector's future prospects, projecting a continued high single-digit contribution to the GDP. He underscored the importance of government support in fostering a conducive environment for telecom operators to thrive and meet evolving consumer demands. The interview also touched upon the industry's ongoing discussions with regulatory bodies like the Central Bank of Nigeria (CBN) regarding a substantial debt issue, hinting at broader financial challenges that could further impede sector growth. As Nigeria navigates these complex telecom sector dynamics, the decision on tariff hikes looms large, with implications for both operators and subscribers. The outcome of these deliberations will shape the industry's trajectory and its ability to harness technological advancements for socio-economic development.