KEY POINTS
- Rewane supports the telecom tariff hike for its inflation-moderating effects.
- A 40-50 percent hike is likely, balancing costs and industry needs.
- NCC to finalize adjustments after consulting telecom consumer groups.
Nigeria’s proposed telecom tariff hike will also boost productivity and moderate inflation, said Bismarck Rewane, CEO of Financial Derivatives, who has endorsed the proposed hike.
Rewane, speaking on Channels Television’s Business Morning on Thursday, spoke on the economic gains that could come from an adjustment suggested by telecommunications operators and under review by the Nigerian Communications Commission (NCC).
True as the link between improved productivity and inflation control, Rewane noted that ‘Yes it helps reduce inflation because it increases productivity.’ Policymakers and industry stakeholders have been watching the proposed tariff hike closely, which aims to pay for rising operational costs, like inflation and service delivery expenses.
Industry sustainability versus consumer impact
They have also asked for a 100 percent increase in tariffs, which they say are now escalating. The NCC finalized the details as Minister of Communications, Innovation and Digital Economy, Bosun Tijani, confirmed the government’s plans to adjust tariffs.
Rewane said, who referred to a 10 percent hike in MTN shares to N220, an indication of investor confidence in the sector. But he noted that investors have already factored in the proposed increase and have a positive view of the future of the sector.
Instead, he predicted a 40 to 50 percent adjustment, instead of the planned 100. ‘Experts believe that static tariffs in recent years will likely cause a 40 to 50 percent increase, which he described as a fair compromise.
A role of NCC in consumer consultations
The telecom consumer groups were scheduled to meet the NCC to discuss their concerns on the tariff hike. The discussions will further seek a balance between the needs of operators’ sustainability and consumer protection against excessive costs.
Policymakers, regulators, and operators all aligned well, felt Rewane, and he noted the emphasis on quality service and the need to adjust with tariff. He said: “We’ve heard from Bosun Tijani who said we should talk about sustainability, and the NCC who told us that they will hold operators accountable for quality service.”
Furthermore, a final decision on the tariff adjustment will be announced after consultations, with the NCC expected to ensure that the telecom industry remains sustainable without placing undue burdens on consumers.
