With an average data cost of $0.38 per gigabyte, Nigeria stands out as one of the most affordable countries globally and the cheapest in West Africa for mobile data services, according to a report by the International Telecommunications Union (ITU) and the GSMA.
However, telecom operators are advocating for tariff adjustments to address economic pressures threatening the sector’s sustainability.
The GSMA report, titled “The Role of Mobile Technology in Driving the Digital Economy in Nigeria,” highlighted Nigeria’s competitive data pricing, which is significantly lower than other African nations, such as Kenya ($0.59 per gigabyte), Ethiopia ($0.68 per gigabyte), and South Africa ($1.77 per gigabyte). The report also revealed that Nigerian data costs, as a percentage of Gross National Income (GNI) per capita, are among the lowest across Africa.
By contrast, the United States averages $6 per gigabyte, underscoring Nigeria’s advantage in offering cost-effective connectivity.
Despite the low costs, Nigerian telecom operators face mounting challenges due to the currency devaluation, rising inflation, and the overall economic downturn in recent months. These issues have led to operating costs exceeding revenue for many telecom firms.
Speaking in a recent interview, Dr. Karl Toriola, CEO of MTN Nigeria, described 2024 as a “torrid year” for the telecom industry.
“What this has done is that it has driven the cost of operations up so significantly, that by the end of the year, we are spending more to keep operations up and running than we are generating in revenue, and that is not sustainable,” Toriola said.
Toriola emphasized that a tariff adjustment is crucial to ensuring the sector’s survival and enabling operators to continue providing quality services.
The push for tariff increases comes as telecom companies highlight the need for reinvestment to enhance capacity and maintain service quality.
“What the tariff adjustment allows us to do is to continue to reinvest, because we need to build capacity, build resilience, put in additional generators and alternative power supply systems for stable and high-quality networks,” Toriola explained.
He warned that without adjustments, telecom operators might face operational shutdowns.
“If you have any organization that’s spending 160% of what it earns in revenue, at some point that organization is going to shut down. We are running on fumes to keep our networks up,” Toriola stated.
The Federal Government has acknowledged the need for tariff adjustments but assured Nigerians that any increase will be moderate.
Speaking at a stakeholders’ meeting with Mobile Network Operators, Dr. Bosun Tijani, Minister of Communications, Innovation and Digital Economy, said:
“We want to strike the balance as a government, to protect our people, but also protect and ensure that these companies can continue to invest significantly.”
Source: OKAY NG
