From Fred Ezeh and Adanna Nnamani, Abuja
The Federal Government said it was considering giving approval to telecommunication companies to increase tariffs on their products.
Minister of of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, disclosed during an event organised by GMSA, where it presented the Nigeria Digital Economy Report, which showed that the sector was hugely impacted by the inflation in the country.
According to the minister, the government must do what it needs to, to improve the business environment.
Tijani, however, noted that the tariff increase must be approached with extreme caution, adding that the challenges faced by the telecom industry, can only be overcome through multifaceted approaches and not by only increasing tariff.
“I think it is important to have this debate, that is, for the articulation of how you have seen the role of government. When I was appointed, I think I had a meeting with the associations, and I made it clear that some of these repeated challenges that are set towards government to the best of my knowledge, are not things that we can not surmount.
“And, on your last comment, where you were saying that your company is facing these challenges from multiple angles. It is not just from one perspective, in the middle of that as well, we are in a world, where our people are struggling. So, as a sector, as leaders, we must achieve the things we want to achieve by also being smart and also being extremely practical as well.
“I think the government of the day, for every single demand of a sector, is willing to support, is willing to actually ensure that we improve our business environment. We have a president that is extremely pro-business. And whatever he needs to do to improve the environment, he will.
“There are more macro issues and hard decisions that our country will have to take at some point, and the president will be the one to take some of those decisions. And as we can see, we have looked at some of the reports, it is clear. Where it was talking about the state of the investments before the devaluation. your report was quite clear that the devaluation had a major impact on you and your companies.”
Speaking during a briefing with the telco operators at the event, Chief Executive Officer, MTN Nigeria, Karl Toriola said tariff increase has become crucial for the survival of the industry. “I think what we need to do is, collectively, we have to deepen and address so many of those pains. The solution to these pains will not come from one single thing, which is raising taxes. That is never going to be the solution.
“There is a ton of other things that we must do to ensure that the business environment is conducive for the investors in this case. And government is articulating it, including the tariff conversation.”
Speaking during a briefing with the telco operators at the event, Chief Executive Officer, MTN Nigeria
Karl Toriola to Journalists that the increase in telecom tariff has become very crucial for the survival of the industry.
Toriola said: “I think the Chairman of ALTON is very correct, and I must also give credit to the federal government. The BBC has put a lot of pressure on quality of service. Coverage rollout, a lot of discussions around fiber, digitalisation of digital skills, et cetera, and the tariff increase is obviously very emotive.
“But it is a very big issue that can reduce the investment into the sector. If you do not have the cash to invest, or there is no returns for people to inject cash to invest, they will not. Capital does not float where it makes negative return.
“There are many other things that can be done to improve the quality of the industry. Spectrum availability is one, taxation, the minister has spoken to that, protection of infrastructure, we have spoken about that and the National Critical Infrastructure Bill is well in motion. And I think a lot of those things we have advanced to a good extent. But the elephant in the room is the tariff increase.
“The price of diesel cannot go from 200 Naira to 1,200 Naira, and it does not affect someone, somewhere. And at some point in time, it will become so expensive, people can not fuel base stations.
“Those are the realities that we have to face. The truth is, the price of garri, which is completely produced in Nigeria, has not been stagnant for years. Inflation is real, and affects every sector of the industry, and that is why a tariff increase is needed.”
“If you ask the person who is producing garri from Cassava in the village to set the price of garri, at whatever he or she was selling a bag in 2000, let’s say it was 500 Naira, and today it’s 500 Naira, he or she will stop producing the garri. Fact of life. So that is what the tariff increase is about. The practical realities of the cost of production in this economy as it stands today. Being able to cover that and continue to protect the health of the industry.”
Commenting on why the sector is not considering alternative energy solutions to cut coat, Toriola said: “There are alternative solutions, but guess what? Those solutions require investment. You want to get solar panels, high-capacity, long-lasting batteries. You are going to spend money. And the reality about the returns on alternative power solutions is you need to invest the money, a higher quantity of money up front, and get the returns over seven, eight years. In this environment, nobody is going to do that.So it costs money. Those solutions don not come out of the air. You have to invest with a much longer payback period in those solutions to get there.”