NCC and Telecom operators plan infrastructure upgrades using tariff revenues

Nigerian mobile operators plan to channel revenue from the proposed 100% tariff increase into significant network infrastructure upgrades and improved service quality.

This condition is key as they await final approval for the hike after discussions with the government and the Nigerian Communications Commission.

As part of the agreement, the NCC will oversee the implementation of these investments to ensure telecom companies comply with the outlined requirements.

This was disclosed by MTN Nigeria’s CEO, Dr. Karl Toriola, in a column published in BusinessDay on Monday.

Mobile operators are navigating a challenging operating environment, driven by macroeconomic factors like naira-to-dollar volatility and inflation, currently at 34%.

According to the operators, running costs have surged by over 300% in the past 18 to 24 months, making tariff adjustments crucial for the telecom sector’s long-term sustainability.

These challenges have made operators hesitant to invest further in infrastructure as they grapple with a difficult economic environment.

“So not only will increases be capped well below the levels the industry has requested, but they are linked to a requirement to invest in network upgrades and service improvements, which will be overseen by the NCC to ensure compliance,” Toriola explained in the column.

Foreign investments in the telecom sector plummeted to $14.4 million in Q3 2024, an 87% drop from the $113.42 million recorded in Q2.

This sharp decline highlights a troubling trend for a sector struggling with infrastructure deficits and high operating costs, despite its growth potential.