MTN Speaks on Increasing Call, Data Tariffs, Gives Reasons
- In response to the naira's devaluation, MTN Nigeria is advocating for the endorsement of higher cellular tariffs
- According to the telecom operator, without the approval of a new tariff system, there would be no incentives for more investments
- MTN's chief financial officer explained that growth will be hampered and eventually negatively impacted if rates are not reviewed upward
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
MTN Nigeria is advocating for the support of higher telecom rates in reaction to the devaluation of the naira and the high cost of foreign exchange.
Source: UGC
According to the telecommunication company, there would be no incentives for more investments in the sector unless a new traffic structure is authorised.
MTN Nigeria's chief financial officer (CFO), Modupe Kadri, stated this during a panel discussion organised by the Nigeria Economic Summit Group (NESG), The Punch reported.
The panel spoke on the theme: “Navigating Business Growth in an era of volatility and uncertainty.”
Buttressing his point, Kadri said since all telecom technology are imported from overseas, the devaluation of the naira has increased the cost of inputs.
He added that as a result, the cost of doing business has skyrocketed while tariffs have been the same for a decade.
The MTN CFO further argued that, since the telecom industry is a major driver of other sectors and accounts for 16% of the GDP, failing to review rates upward will hinder growth and ultimately negatively impact other areas of the economy.
“Our business is mainly dependent on forex. The forex problem arose as a result of the policy to devalue or let the naira find its true level. The same thing happened in the petroleum industry – to get appropriate pricing for petroleum products therefore removing all subsidies. This meant that the government was feeling some pressure on the burden it was carrying and decided to offload it. In the telecoms industry, the problem still remains forex. We have suffered devaluation in the movement of the rate from about N400-$1 to N16,000-$1. We have established the letters of credit to import some equipment. We have contractual obligations which the CBN hasn’t fulfilled” he explained.
“We have experienced forex losses. We are in a business to survive. But we operate in a regulated industry where you are not allowed to adjust your prices. Other sectors have moved prices over the years to survive devaluation but we haven’t moved our prices in the past 10 years yet we are supposed to continue providing these nice services that you enjoy. If we say there is full deregulation in the econo quality of services you all desire, it costs money because this equipment are imported. my, let things find their natural levels because there will be no new investments” if we continue that way he warned.
MTN, others speak Starlink's internet subscription
Legit.ng earlier reported that the Association of Licensed Telecommunication Companies of Nigeria (ALTON) criticised Starlink’s decision to hike internet subscription prices without the Nigerian Communications Commission (NCC) approval, calling it an insult to the regulatory authority.
Starlink, owned by billionaire Elon Musk, raised its monthly subscription fees by 97% from N38,000 to N75,000, including a 34% hike in hardware kits from N440,000 to N590,000.
The satellite internet service provider, with almost 24,000 subscribers, cited inflation as the reason for the price increase.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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