Major factors behind telecom tariff hike

It’s no longer news that the various telecommunication companies have increased their Tariff rates across all services including,calls,text messages and data usage.

The recent tariff hike among telecom companies has posed a significant burden on consumers, who are already battling with inflations, security insurgencies and economic uncertainty.1. Rising operational costs: Telecom companies have been struggling with significant increases in operational costs, which have had an impact on their revenue generation.A typical example is the cost of energy supply, the cost of diesel has skyrocketed from it’s initial N200/N300 per litre to N1,200 per litre. According to the CEO of MTN Karl Toriola, telecommunication industries cannot survive without the increase in Tariff.2. Devaluation of Naira: The devaluation of the Naira has had significant implications on the telecom companies in Nigeria. The decline in the value of Naira against dollar has more or less influenced the purchasing power of the companies,hence making foreign purchases expensive.Also the importation and maintenance of equipments and facilities cost,has left the companies no other choice than increase it’s Tarrif.

3. Human Resources: Another major reason why Telecom companies might have increased their Tarrif rate is Human Labour. The company in order to stay functional would require human labour and inorder to attain that most pay salaries. In a situation where the companies are spending more money than they’re generating, the possibility of owing staffs comes in 

These factors have cumulatively led to the telecom tariff hike, as companies strive to maintain sustainability and continue providing quality services.

While on an interview with the Naija Info FM 99.3 FM,the MTN CEO,Karl Toriola said: “The thing is, the Telecommunication industries cannot survive without the Tarrif increase, it’s called maybe more complex sustainability, but honestly it’s just about survival.

“Everyone in the Telecommunication industry is probably spending more than they’re earning, and this can only go on for so long before the companies and the network connectivity systems starts to collapse,so that’s why it’s an absolute necessity.

“Why has this happened? Because everything in Nigeria in terms of cost to the telecommunication industry has gone up multiple folds, generally between three and five times to what it was before. So while our top line revenue is growing at approximately 30% in 2024, our cost has increased to 96%.”

Major factors behind telecom tariff hike - The Nation Newspaper