Telecommunications Operators Call for Tariff Increase, Warn of Service Disruptions

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has warned over the potential widespread service disruptions if the federal government fails to address critical issues affecting the telecommunications industry.

In a statement on Monday, Gbenga Adebayo, ALTON Chairman, highlighted the growing financial strain on operators, citing escalating operational costs, stagnant tariffs, and worsening economic conditions.

He urged the immediate implementation of reforms to safeguard the industry’s sustainability.

The survival of the sector demands immediate and bold reform for its sustainability,” Adebayo said. Tariffs must be reviewed to reflect the economic realities of delivering telecoms services at a minimum for industry sustainability.

According to Adebayo, soaring energy prices, persistent inflation, and fluctuating exchange rates are exacerbating the crisis. Operators are grappling with these challenges while trying to maintain affordable services for millions of Nigerians.

The ALTON chairman warned that if tariffs are not adjusted, operators may be forced into service shedding, which involves reducing the availability of services in certain areas or at specific times. This could result in millions of Nigerians losing access to critical telecom services.

Adebayo cautioned that service disruptions would ripple across critical sectors such as security, commerce, healthcare, and education, which heavily rely on telecommunications infrastructure. Businesses would face connectivity challenges, stalling growth and innovation, and potentially leading to an economic downturn.

This will have significant economic fallouts, as businesses will suffer from a lack of connectivity, stalling growth and innovation,” he added.

It will be recalled that the Nigerian government proposed a 5 per cent excise duty on telecommunications, gambling, and gaming services.

This proposal is included in the new “Nigeria Tax Act” bill, which was submitted to the National Assembly on October 4, 2024.

The bill aims to impose excise duties on services provided in Nigeria, including both postpaid and prepaid telecom services regulated by the Nigerian Communications Commission (NCC), as well as gaming, gambling, and lottery activities.

According to the document, all transactions related to these services will attract the 5 per cent excise duty once the bill is passed.

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