9Mobile CEO pitches 'market-reflective' telecoms tariffs in Nigeria - Technology Times

Obafemi Banigbe, CEO of 9Mobile, has lent his voice to calls for price adjustments for telecoms services, pitching the introduction of “market-reflective” tariffs to sustain the growth of the Nigerian telecoms industry.

The CEO of the number four mobile network operator (MNO) by subscriber base, says that rollout of market-reflective tariff in the Nigeria telecoms sector has become imperative for the sustainability of the industry that has come under threat due to escalating operational costs and regulatory delays.

Speaking at the weekend in a virtual media chat attended by Technology Times , Banigbe, who says his advocacy for tariff adjustments align with the nation’s economic realities, highlights key challenges impacting telecoms operators, including rising inflation, currency devaluation, and increasing infrastructure costs. These challenges, he says, threaten to further erode the quality of service in the telecoms industry, unless addressed promptly.

A mobile phone user seen in the photo above. Image credit: Technology Times/Ayomide Badaru.

The 9mobile CEO points to the depreciation of the Nigerian naira, which has fallen from around ₦400 to over ₦1,500 per dollar in just two years—representing a 350% decline. According to Banigbe, this sharp devaluation has led to a surge in telecoms operation costs, most of which are dollar-denominated, while revenues—largely earned in local currency—have failed to keep pace.

9Mobile CEO: Rate of telecoms revenue not commensurate with cost base in Nigeria

The 9Mobile CEO points to the depreciation of the Nigerian naira, which has fallen from around ₦400 to over ₦1,500 per dollar in just two years—representing a 350% decline. According to Banigbe, this sharp devaluation has led to a surge in telecoms operation costs, most of which are dollar-denominated, while revenues—largely earned in local currency—have failed to keep pace.

Banigbe explains: “So, even though the industry is growing in its top-line revenues, the rate of growth of local revenue, of revenue in local currency, is not commensurate with the rate of growth of the cost base that we have.”

The topic of tariff hikes has been a subject of heated debate in Nigeria, with operators calling for increased prices to stay afloat, while consumer advocacy groups such as the National Association of Telecommunications Subscribers (NATCOMS) have expressed concerns about the affordability of telecoms services for Nigerians already grappling with economic difficulties.

The Nigerian Communications Commission (NCC), the telecoms industry regulator that sets price floors for the telecoms industry, has delayed tariff adjustments several times amid rsing clamour by telecoms operators that have attributed their rising costs to socio-economic challenges including rising inflation and currency fluctuations.

Dr Aminu Maida, Executive Vice Chairman, Nigerian Communications Commission (NCC), is seen in the photo above. Image credit: NCC.

“So," the 9mobile CEO says, "affordability will then remain a concern in defining how do we put up a price point that is market-reflective, that is also able to allow us to generate enough cash flow to cover our cost and to reinvest in the business. From the policy maker's point of view as well, I’m sure they are also considering the concept, this whole idea of affordability, and I’m sure that's one of the reasons why the government has really dragged its foot in being able to address this whole conversation around tariff increase.”

Banigbe calls for a market-reflective pricing framework that would allow for tariff adjustments in response to these rising costs, while ensuring that services remain affordable for the consumer base.

“See, if every one of us are looking at our business, the rational thing that people want to do is to say they want to pass all the cost increase, 100% of cost increase to the end user in form of a significant pricing increase, but we also have to be mindful of the fact that the customers may not be able to pay for the services,” Banigbe says.

“So," the 9mobile CEO says, "affordability will then remain a concern in defining how do we put up a price point that is market-reflective, that is also able to allow us to generate enough cash flow to cover our cost and to reinvest in the business. From the policy maker's point of view as well, I’m sure they are also considering the concept, this whole idea of affordability, and I’m sure that's one of the reasons why the government has really dragged its foot in being able to address this whole conversation around tariff increase.”

Banigbe reckons that a market-reflective pricing framework balances the interests of operators and subscribers in the country and offers a pathway "where tariffs are adjusted to reflect rising costs while remaining affordable for consumers."

According to him, “we know that our market is regulated. So because our market is regulated, we need to start thinking around the whole concept of market-reflective tariff, which is reflecting the realities on the ground. Which would balance the need for sustainability and with the concern for affordability that the customers out there are concerned about."

According to the 9Mobile CEO, "we are confident that the regulator will do the right thing and approve the most appropriate tariff that puts into consideration the need for the fact that customers must be able to afford the services we are offering. At the same time, the industry has to survive, because if the industry doesn’t survive, the customer will not get the service that they desire.”

Obafemi Banigbe, the Chief Executive Officer of 9Mobile, seen in photo above, has advocated market-reflective tariffs within the Nigerian telecoms sector in order to sustain the growth of the industry. Image Credit: Banigbe.

According to the 9Mobile CEO, the company is implementing a transformation plan focused on four key pillars: stabilisation, modernisation, transformation, and growth. Banigbe reveals that the telecoms company’s new investors have pledged significant financial support to fuel the transformation plan.

Banigbe, who also shares insights into 9Mobile's journey in the Nigerian telecoms market, and the turnaround efforts underway at the number four MNO, says that the lack of telecoms infrastructure investment in recent years by the telecoms operator has led to its decline in service quality. As a result, customers have ported to other providers that can offer better service. Over 38,000 subscribers have ported out of the 9mobile network within January 2024 to October 2024, according to porting data obtained from the NCC.

“I mean, 9Mobile was an example where we have not invested in the last couple of years. What that has resulted into is a decline in our quality, and when our quality declined, the customers basically went to other services that can give them the quality,” he explains.

According to the 9Mobile CEO, the company is implementing a transformation plan focused on four key pillars: stabilisation, modernisation, transformation, and growth.

Banigbe reveals that the telecoms company’s new investors have pledged significant financial support to fuel the transformation plan. However, he emphasised that the success of these plans is contingent on regulatory action to adjust tariffs.

“That costs money," the 9Mobile CEO says, "and that’s the only way we’re going to have to compete in this market, and then to compete on the long run, we need to be able to generate enough cash flow to cover that cost and also reinvest back in the business, reinvest in quality, reinvest in new technology, reinvest in capacity, reinvest in the overall customer experience, reinvest in new product.”

While underscoring that collaboration is crucial in addressing these challenges, Banigbe calls for collective efforts from regulators, operators, and the government to find a solution that balances sustainability with affordability. “Sustainability is the key word here, but we have to balance sustainability with affordability, and that’s why it is a collaborative effort that we must pursue, where both governments, industry players, consumers, and stakeholders have to understand the realities of what we are dealing with, and then empathize with us as well, just like we are empathising with them,” he says.

The 9mobile CEO also recommended policy interventions to reduce the financial burden on operators. He praised the Critical Infrastructure rules that now protect telecoms assets from vandalism, and highlights the importance of shared infrastructure to minimise costs. He also highlights the importance of shared infrastructure as a strategy to minimise operational costs.

Despite these ongoing challenges, Banigbe remains optimistic about Nigeria's telecoms growth potential. He pointed to the nation’s rising population and increased demand for broadband services as key drivers for future growth.

However, the financial strain on 9Mobile has compounded long standing challenges. Formerly operating as Etisalat Nigeria , the company was once a disruptive force in the Nigerian telecoms market, with over 22 million subscribers. Following Etisalat’s exit in 2017, 9Mobile has suffered a significant loss in market share and service quality due to underinvestment in critical infrastructure. Currently, the telecoms operator has a 2.15% slice of the Nigerian telecoms industry with 3,389,897 subscribers, according to data from the NCC, a major contrast to the 51.09 market share which MTN Nigeria currently holds.

Banigbe acknowledges that much of 9Mobile’s infrastructure has remained outdated for nearly a decade, with the company’s 4G network being one of the weakest in the industry, and its fiber optic coverage among the lowest.

However, the CEO is hopeful that the planned recovery efforts, coupled with appropriate tariff adjustments, will steer the company back to profitability and recovery of its lost subscriber base.