Telecommunication firms in Nigeria are set to reassess the prices of their services, reflecting the current market conditions, particularly the recent unification of the foreign exchange market.

Reports have it that these firms are working closely with the Nigerian Communication Commission (NCC) to reassess these prices.

The industry players believe that a price review is imperative for long-term sustainability.

Gbenga Adebayo, the President of the Association of Licensed Telecoms Operators of Nigeria, disclosed this during an interview with The PUNCH. He emphasised the necessity of adjusting prices to reflect the cost of production accurately.

This development follows the implementation of a new foreign exchange policy by the Central Bank of Nigeria.

The apex bank recently instructed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters’ Window of the foreign exchange market, enabling the free float of the currency against other foreign currencies. The aim is to bridge the gap between the official and parallel exchange rates of the naira. According to Adebayo, this policy change has tipped the scales towards an imminent price review in the telecom industry.

Adebayo explained, “In order for our industry to remain sustainable and maintain the quality of service we provide, our prices must align with the cost of production. It is only logical that we review prices to reflect the current costs of inputs after consulting with all stakeholders.”

He further emphasised that telcos are not immune to the economic conditions in the country, stating, “When input costs rise, prices naturally follow suit. Therefore, it is realistic and necessary for us to review prices to ensure the industry’s sustainability and the delivery of quality service. We are providing all the necessary information to the regulators.”

Adebayo clarified that discussions about price review have been ongoing, with telcos receiving approval for such adjustments during the previous administration. However, the recent changes in the foreign exchange regime have made an increase in prices essential.

“We initiated these discussions before the end of the last administration, and we had actually received approval for a price review at that time. However, there were intervening factors that put it on hold, which does not reflect the reality we face. Therefore, it is only natural to expect a price review,” Adebayo explained.

He added, “Foreign exchange rates are not the only factor influencing this decision. There are other elements and cost parameters that we have previously mentioned, which also contribute to the justification for a price review.”

Additionally, a telecom expert confirmed that telcos are pushing for an increase in delivery costs. The expert noted that the industry has been unable to respond effectively to price shocks, which is starting to impact its operations.

“If we continue to fix prices and cannot adjust them according to the current realities, we cannot indefinitely subsidise consumption. Eventually, a price review becomes necessary. This should have happened earlier. It has been discussed extensively, and we have been enduring many challenges. We need some form of assistance. We have been relying on volume, but this is a business that requires continuous investment and technological upgrades, which require funds,” the expert stated.

Since the commencement of President Bola Tinubu’s administration, which included the removal of fuel subsidies on May 29, 2023, prices of various goods and services have been on the rise. Mobile telecommunication services play a vital role in the Nigerian economy, serving as a significant component of its GDP.

It is worth noting that in 2022, telcos wrote a letter to the NCC requesting a 40% increase in the price of data, calls, and SMS due to rising operational costs. They sought to raise the floor price of calls from N6.4 to N8.95 and the price cap of SMS from N4 to N5.61.