The Nigerian Communications Commission (NCC) has approved a 50% tariff hike for phone calls. This adjustment could increase the average call cost to ₦16.5 per minute. Based on 2023 national call traffic data, this increase could generate over ₦6.74tn in 2025. However, this projection excludes potential impacts from free or discounted call promotions.
Call Traffic Analysis and Revenue Projections
Data from the NCC’s 2023 Subscriber/Network Performance Report highlights that total outgoing call traffic in 2023 was 205.3 billion minutes. Incoming traffic stood at 203.2 billion minutes.
The report stated, “As of December 2023, total outgoing Local and National Traffic was 205,298,114,995.11 minutes, while Total incoming Local and National Traffic was 203,187,588,876.00 minutes. MTN had the highest total outgoing and incoming Traffic of 122,667,600,437.00 and 123,762,501,615.00 minutes, respectively, in 2023.”
This indicates Nigerians spent approximately 408.5 billion minutes making local calls in 2023. Since updated data for 2024 is unavailable, projections rely on 2023 figures, potentially varying in 2025. The analysis also excludes international calls, which accounted for 1.5 billion minutes in 2023.
Major Beneficiaries of the Tariff Hike
MTN led in traffic volume, recording 122.7 billion outgoing and 123.8 billion incoming minutes. At the new rate of ₦16.5 per minute, MTN’s projected revenue exceeds ₦4tn, over 60% of the market’s total earnings. Airtel follows with an estimated revenue of ₦1.78tn, supported by strong traffic shares.
Glo is projected to earn ₦536.2bn. Smaller operators like Smile and Ntel will contribute ₦5.7bn and ₦13.1bn, respectively. 9mobile is expected to generate ₦105.6bn. Combined, the projected revenue of ₦6.74tn underscores the tariff hike’s industry-wide impact.
Outgoing calls may contribute ₦3.28tn, while incoming calls could add ₦3.23tn. Despite data services’ popularity, voice calls remain a primary revenue source. MTN’s dominance solidifies its position, followed by Airtel and Glo. Smaller operators continue struggling with limited market reach.
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SMS Revenue Impact of the Tariff Hike
The tariff hike will likely raise SMS costs to ₦6 per message, boosting telecom operators’ earnings. Based on 2023 SMS traffic data, projected industry earnings for 2025 could exceed ₦137.84bn if volumes remain stable.
In 2023, 22.97 billion SMS were sent and received, an 11.38% decline from 2022’s 25.92 billion. MTN led SMS traffic with 16.79 billion messages, securing 73% of the market and projected to earn ₦100.72bn. Airtel is expected to generate ₦26.26bn from 4.38 billion messages, while Glo’s 1.35 billion SMS could bring in ₦8.10bn. Smaller players like EMTS and Smile will contribute modestly, with combined earnings of less than 2% of the total.
The SMS revenue projection of ₦137.84bn highlights a potential shift in consumer behaviour. Nigerians may increasingly use cost-free platforms like WhatsApp and Telegram.
NCC’s Justification for the Tariff Hike
The NCC approved the 50% tariff hike to address rising operational costs. According to the NCC’s Director of Public Affairs, Reuben Muoka, the adjustment complies with the 2013 Cost Study and 2024 Tariff Simplification Guidance. The approved increase is significantly lower than the 100% hike some operators initially requested.
The NCC emphasized balancing operators’ sustainability with protecting consumers. Tariffs have remained unchanged since 2013 despite inflation and higher operational costs. This adjustment aims to support infrastructure upgrades and service quality improvements. Extensive stakeholder consultations informed the decision.
Stakeholder Reactions and Legal Challenges
Consumer advocacy groups expressed concerns over the tariff hike. Adeolu Ogunbanjo, President of the National Association of Telecoms Subscribers, warned against additional burdens on consumers. He emphasized exploring alternative funding, like public share offerings, to reduce reliance on tariffs.
The association has threatened legal action if the new duty proceeds without addressing consumer concerns. Ogunbanjo stated, “A 50% increase will cripple Nigerians. Operators must explore moderate hikes and alternative funding mechanisms.”
The Association of Telephone, Cable TV, and Internet Subscribers of Nigeria highlighted the need for improved service quality. President Sina Bilesanmi warned of legal action if telcos fail to enhance infrastructure and service delivery within two weeks of implementation.
Broader Implications of the Tariff Hike
The 50% tariff hike will raise the cost of calls, SMS, and data services. The average call cost will rise from ₦11 to ₦16.5 per minute. SMS charges will increase from ₦4 to ₦6, while 1GB of data will cost ₦525 instead of ₦350.
Despite the expected revenue growth, these changes could significantly impact consumers. Many may turn to cheaper alternatives, potentially reshaping Nigeria’s telecom landscape. The NCC assured transparency and consumer education during the implementation process.
