The Nigerian Communications Commission (NCC) has approved a long-pending proposal for telecom tariff hikes, with new rates for calls, SMS, and internet bundles expected to take effect in January 2025. This marks the end of over a decade of lobbying by telecom giants like MTN Nigeria, Airtel, and 9Mobile, who have called for price adjustments to reflect economic realities.

Despite soaring operational costs driven by headline inflation, telecom operators have been unable to raise prices for 11 years. The NCC's approval comes after the industry's persistent calls for a tariff hike, citing significant financial losses due to rising costs. A spokesperson for the Nigerian Communications Commission (NCC) confirmed to TechCabal that further details of the tariff adjustments would be shared in an official announcement.

According to the existing proposals, telecoms tariffs could rise by up to 40%. If adopted, the cost of a phone call will increase from ₦11 to ₦15.40 per minute, and SMS charges will rise from ₦4 to ₦5.60. For data plans, the price of a 1GB bundle will increase from ₦1,000 to at least ₦1,400. Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, acknowledged the need for price adjustments, stating: "We think there may be a need for that" in a December 20 interview on Arise TV.

The NCC is responsible for reviewing and approving tariffs adjustments in the telecommunications industry. In October 2024, it rejected Starlink's application to double subscription fees to ₦75,000. While the commission aims to balance the financial burden on subscribers, it also recognises that the industry's operational challenges could affect service quality and investment.

Rising food inflation (39.93%) complicates the telecom tariff increase, with concerns that it could reduce internet usage in a country where digital inclusion is a priority. However, the current situation has led to significant financial losses for the telcos. MTN Nigeria, for instance, reported a ₦137 billion loss in 2023, with losses expanding to ₦514.9 billion in the first nine months of 2024. Airtel Africa also reported losses of $89 million in FY 2024, largely driven by challenges in Nigeria.

Despite the grim outlook in the telecoms sector for much of the year, President of the Association of Licenced Telecommunication Operators of Nigeria (ALTON) Gbenga Adebayo argues that cost-reflective prices will incentivise investment and help improve quality in the long run. The tariff hike is expected to have a significant impact on the Nigerian telecom industry, with implications for subscribers, operators, and the overall digital economy.

The approval of the tariff hike comes at a critical time for the Nigerian telecom industry, which has been grappling with rising operational costs, financial losses, and concerns about service quality. As the industry adjusts to the new tariff regime, it remains to be seen how subscribers will respond to the price increases and what impact it will have on the overall digital landscape in Nigeria.