Telcos need tariff hike to improve infrastructure – Rewane
The Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, said telecommunications companies need to increase tariffs to improve the quality of their services and attract more investments.
The economist, who was a guest on Arise TV on Saturday, highlighted the urgent need for fresh investments to upgrade infrastructure and improve services.
He explained that the current state of affairs was having a detrimental impact on the sector’s growth and development.
Rewane’s comments support the telcos’ push for cost-reflective tariffs, which they said were necessary due to adverse economic headwinds threatening their financial viability.
A few weeks ago, operators in the country including MTN Nigeria and Globacom asked for Federal Government approval through the Nigerian Communications Commission to raise their tariff.
Rewane said the telcos had yet to increase tariffs in the last 11 years despite the continuous rise in inflation, adding that the sector was critical to the development of Nigeria’s economy.
He further mentioned that the fundamentals of the telecom industry had become unattractive because of the return on investment.
The President of the Association of Telecommunications Companies of Nigeria, Tony Izuagbe, recently warned that operators were facing significant financial difficulties and may not remain operational beyond this year if tariffs were not adjusted.
He cautioned that failure to take prompt action could result in multiple telecom operators being forced to cease operations, thereby depriving millions of Nigerians of essential communication services.
Izuagbe stressed that the current tariff regime is inadequate to cover the costs of service provision and urged regulatory bodies to address the industry’s challenges and provide support to operators to maintain service quality.
