Edun Defends Telecom Tariff Hike, Says It’s a “Starting Point”

Wale Edun, Nigeria’s finance minister, has justified the recent 50% tariff hike in telecom rates, saying it was an essential step to guarantee the industry’s long-term survival. Edun acknowledged the public’s worries about the impact on the cost of living while speaking at the World Economic Forum (WEF) in Davos, Switzerland. However, he also underlined the necessity of striking a balance between the delivery of high-quality services and the growing operational costs for telecom carriers.

He clarified that rising inflation and a sharp rise in the operating costs telecom businesses faced were the reasons behind the price review, the first in more than ten years.

“There is a need to reflect the fact that over a 12-year period, there has been a rise in costs, there has been inflation, and that needs to be reflected,” Edun stated during an interview on Arise News.

While operators initially sought a 100% tariff increase, the government approved a 50% hike as a compromise. “It’s all about compromise and the timing and sequencing of these changes,” Edun said. “As critical players in Nigeria’s economy, we want the telcos to operate efficiently, providing quality services and contributing to GDP growth.”

The minister stressed that the government’s primary objective is to ensure that telecom operators deliver high-quality services, such as reliable call connections and improved network coverage. “We don’t want dropped calls. We want good quality services from them,” Edun emphasised. “And at the same time, we want them growing, employing people, and adding to the country’s GDP.”

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The tariff increase, however, has drawn criticism from consumers who are already grappling with rising living costs. In response, Edun assured the public that the government is committed to ongoing reviews and consultations to address these concerns and ensure that the adjustments remain fair for all stakeholders.

“The cost-of-living increase that has occurred has to be reflected,” he acknowledged. “But I believe that this 50 percent increase is a start, and it is a situation that will be looked at on a forward-looking basis as we go forward. There will continue to be review, consultation, and discussion in this area.”

Edun further emphasised the importance of regulated pricing to prevent arbitrary increases and the need for continued dialogue and compromise between the government, operators, and consumers in determining appropriate tariff levels.

This tariff review comes amid rising inflation and economic pressures, creating a delicate balancing act for policymakers. While consumers grapple with affordability concerns, industry players argue that the increase is crucial for sustaining operations, investing in infrastructure, and improving the overall quality of telecommunications services in Nigeria.