The National Association of Telecommunications Subscribers (NATCOMS) says it strongly opposed the proposal by the Nigerian Communications Commission (NCC) to approve a 40% increase in telecoms tariffs, citing the industry regulator’s alleged action as “insensitive” of the economic burden faced by Nigerian consumers.
In a communiqué signed by Chief Adeolu Ogunbanjo, the NATCOMS President, and Bayo Omotubora, the Association’s National Secretary, issued following an emergency meeting of its National Executive Council on December 31, 2024, NATCOMS says the proposed hike will raise the cost of voice calls from N11 to N15.40 per minute, text messages from N4 to N5.60, and the price of a 1GB data bundle from N1,000 to N1,400.
NATCOMS, in the statement made available to Technology Times, says the impending tariff raise in the telecoms industry would further make telecoms services unaffordable to an estimated two-third of subscribers, describes the planned increases by NCC as unjustifiable, particularly given the ongoing economic challenges faced by Nigerians.
NATCOMS further argues that this tariff hike is one more burden for consumers, who are already grappling with inflation and other rising costs of living. The association says that the new tariffs come at a time when the country is experiencing multiple economic hardships, making it especially challenging for average Nigerians to absorb additional costs.
The Nigerian telecoms market’s subscriptions include 157,600,321 active phone lines; 134,787,935 internet connections, and 91,576,992 broadband connections as of October 2024, according to NCC’s latest market information.
“This Association considers the decision of the NCC as very insensitive and not in the interest of telecoms services consumers,” NATCOMS says. “The unrelenting rise in prices of goods and services in the country has made life extremely difficult for the generality of citizens who are the consumers of telecom services.”
NATCOMS further argues that this tariff hike is one more burden for consumers, who are already grappling with inflation and other rising costs of living. The association says that the new tariffs come at a time when the country is experiencing multiple economic hardships, making it especially challenging for average Nigerians to absorb additional costs.
NATCOMS on issues surrounding telecoms tariffs in Nigeria
Telecom operators in Nigeria have advocated for tariff hikes citing operational costs with industry stakeholders describing the sector as being in an intensive care unit. The NCC, which regulates the telecom sector in Nigeria, recently introduced rules guiding telecoms tariffs imposed by operators in the country. Operators have said that tariffs charged for their services have not refelcted their costs, which have been exacerbated by inflation, exchange rate depreciation, and increasing levies imposed on telecoms companies.
Meanwhile, while reviewing the proposed 40% tariff hike, the association views the price increase as part of an official policy to make telecoms services increasingly unaffordable to the general public. “This, undoubtedly, is against public interest contrary to the false narrative of NCC that described the recent adjustments as pro public interest,” NATCOMS says.
In December 2024, NATCOMS slammed the NCC for failing to consult relevant stakeholders regarding the proposed telecoms tariff increases. This comes after the NCC’s plan to announce new prices for telecoms services was shelved on December 13, 2024.
Following the NCC’s decision to shelve the public announcement of telecoms tariff plans, the NATCOMS President told Technology Times in an exclusive interview that the telecoms regulator should urgently convene a stakeholders consultation before moving forward with any price hikes.
However, in September 2024, Ogunbanjo, who spoke in favour of a 10% increase in telecoms tariffs in a separate interview with Technology Times, justifies the proposal by pointing to operational challenges facing the telecoms sector that included rising fuel prices, and the rising costs of dollar procurement. While advocating for the tariff hike, the NATCOMS President suggests that a moderate increase of 5% to 10% could help prevent the collapse of telecoms service quality. He also emphasised the importance of fair regulation by the telecoms regulator, NCC.
Meanwhile, while reviewing the proposed 40% tariff hike, the association views the price increase as part of an official policy to make telecoms services increasingly unaffordable to the general public. “This, undoubtedly, is against public interest contrary to the false narrative of NCC that described the recent adjustments as pro public interest,” NATCOMS says.
NATCOMS has also expressed concerns about the cumulative burden of taxes and levies placed on telecoms services. In 2019, the Value Added Tax (VAT) rate was raised from 5% to 7.5%, leading to increased costs for telecoms consumers. NATCOMS says many of its members have already been forced to reduce their telecoms usage due to these increased charges.
“Telecoms services are taxable services under the Value Added Tax Act,” the telecoms subscribers’ pressure group notes. “The Act was amended in 2019 by the Finance Act of that year to raise the tax rate from 5% to 7.5%, which was a 50% increment, and the increment has been borne by the consumers of rateable telecom services.”
In addition to VAT, the 2020 Finance Act introduces a 5% excise duty on telecoms services, a measure that faces public backlash. NATCOMS, representing consumers, challenges this duty in court, arguing that it constitutes double taxation. The case, “Registered Trustees of National Association of Telecommunications Subscribers (NATCOMS) v. MTN Nigeria Communications Limited and Others” (Suit No: FHC/L/CS/189/2023), the association says, is currently pending before the Federal High Court in Lagos, with a hearing scheduled for March 13, 2025.
“If the controversial Tax Bills sail through, Telecommunication Services will now attract 12.5% tax rate and by then two-thirds of telecoms services subscribers would have been priced out of telecoms services market,” NATCOMS says. “This is a complete negation of the statutory duty of NCC to protect the interest of telecom services consumers.”
Although the Federal Government suspended the implementation of the excise duty following public outcry, it remains part of controversial tax reform bills currently under consideration in the Nigerian National Assembly, according to NATCOMS.
NATCOMS warns that if the proposed tariff increase is implemented, it could push the cost of telecoms services beyond the reach of most Nigerians, especially when combined with the potential passage of the new tax reforms. The association predicts that a two-third of the population will be unable to afford essential telecoms services, particularly as the reforms could increase telecoms taxes to 12.5% if passed by the National Assembly.
“If the controversial Tax Bills sail through, Telecommunication Services will now attract 12.5% tax rate and by then two-thirds of telecoms services subscribers would have been priced out of telecoms services market,” NATCOMS says. “This is a complete negation of the statutory duty of NCC to protect the interest of telecom services consumers.”
NATCOMS also addresses the arguments made by telecoms operators, who say that the tariff hike is necessary due to rising operational costs, including higher levies and the dollarisation of telecom equipment. While acknowledging these challenges, NATCOMS calls on telecoms operators to explore other avenues for generating funds, such as raising capital through public offerings on the Nigerian Stock Exchange.
“Operators should bring part of the ownerships of their companies to their subscribers through public offers,” NATCOMS says. “The decision of some of the operators to keep their companies as private-going concerns is against public interest and the consumers should not be made to bear the burden of such a decision.”
While the association calls on the NCC to nullify the approval for the tariff hike, it advises telecoms operators to embrace alternative methods of raising funds. “We, therefore, call on the NCC to null the approval given for the tariff hike and advise the operators to embrace other options of generating funds for their operations,” NATCOMS President says.
Home
