Nigeria’s mobile network operators (MNOs) are relying on the cash flow from the 50% tariff hike to revitalize deteriorating telecom service across Nigeria.
Recall that the Federal Government, through the Nigerian Communications Commission (NCC), recently approved tariff adjustments for MNOs amid reports of the looming extinction of the sector, which has played a major role in the country’s economy.
According to the Chief Corporate Services Officer at MTN Nigeria, the regulator had given the MNOs a 3-month window to significantly boost service quality across the nation, but almost 3 months into the implementation of the new tariffs, Nigerians are already complaining about spending too much on data, phone calls and text messages, while getting so little in return, especially for their calls and SMSes.
MTN Nigeria Chief Executive Officer, Karl Toriola, said that the approvals of increased tariffs by NCC will aid the sustainability of the required investments in networks, which is key to improving customer experience and protecting the future of the telecommunications industry.
“Our value-based approach to capex deployment has been instrumental in maintaining the resilience and quality of our network. We deployed N443.5 billion in capex with a reduced intensity of 13.2percent (2023: 18.2percent),” he said.
Another major network provider in Nigeria, Airtel Africa, is anticipating the returns from the tariff hike to step up service delivery to loyal customers. Reacting via a press statement, the company disclosed that it currently has zero HoldCo debt after the complete repayment of the $550 million bond in May 2024.
Airtel Nigeria, infact, added that majority of its debt is now in naira, having parted with $828 million of foreign currency to settle crippling debt over the last year.
“Capex guidance for the full year remains between $725million and $750million as we continue to invest for future growth.
In line with our plan, we now have zero HoldCo debt following the full repayment of the $550million bond in May 2024. In total, 86 per cent of our market debt is now in local currency, having paid down $828million of foreign currency debt over the last year,” it read.
MTN Nigeria is presently looking forward to a robust revenue flow from the tariff adjustments, which will automatically mean more funding to guarantee top-quality service while delivering its commitment to its customers. “Based on our projections, there would be more cash flow, meaning additional funding to expand and provide quality of service, redundancy, and better customer experience,” Karl added.
CEO of Airtel Nigeria, Dinesh Balsingh, also added that he is very happy with the tariff adjustment, and he expects the decision to bring the declining telecom sector back to life. His words, “The price increase will enable us to continue investing in network infrastructure, expanding coverage.”
9mobile CEO, Banigbe Obafemi, highlighted how the tariff adjustment was compulsory for business sustainability, while blaming a lack of network upgrade for its declining service quality and the alarming exodus of customers from its network.
Mike Adenuga’s Globacom is also enthusiastic about the prospect of pumping the eventual cash windfall into deepening network expansion across Nigeria.
