Rising Costs Threaten Nigeria’s Telecom Sector
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has raised alarms over imminent service disruptions unless tariffs are adjusted. ALTON Chairman Gbenga Adebayo highlighted mounting financial pressures on telecom providers due to soaring operational costs and economic instability. The appeal underscores the urgent need for reforms to sustain critical telecom services in the country.
Operational Costs Escalate Amid Economic Instability
Operators are grappling with surging energy costs, inflation, and exchange rate fluctuations, intensifying the financial strain on the industry. Despite these challenges, service providers strive to maintain affordability for millions of Nigerians. ALTON insists that revising tariffs to reflect current economic realities is vital to the sector’s survival.
Potential Impact of Service Disruptions
Gbenga Adebayo warned that without tariff adjustments, operators might resort to service shedding, affecting telecom access in certain areas or times. Such disruptions could significantly impact sectors like security, commerce, healthcare, and education that depend on reliable telecommunications. Businesses, too, could face connectivity challenges, hampering growth and innovation.
Government Tax Proposals Compound Industry Woes
Adding to the burden, the federal government has proposed a 5% excise duty on telecommunications, gambling, and gaming services. The “Nigeria Tax Act” bill, submitted in October 2024, would impose this duty on both prepaid and postpaid telecom services. Telecom operators argue that these additional taxes could exacerbate the sector’s challenges.
Urgent Call for Collaborative Solutions
ALTON urges policymakers to engage with stakeholders and implement solutions to safeguard the telecom industry. Immediate reforms are essential to avert a nationwide connectivity crisis and ensure the sector’s sustainability. The association also calls for balancing government revenue goals with the economic realities facing service providers and consumers.
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