Nigerian telecom companies have acknowledged experiencing revenue shortfalls, amid allegations of implementing load shedding to control rising operational costs.
The operators, who denied implementing load-shedding, acknowledged that current revenue levels were insufficient to sustain network operations. Industry sources reveal that telecoms struggle to maintain network quality due to financial constraints.
This practice, often referred to as load-shedding, involves extending the coverage area of each base station to compensate for the reduced number of active masts, effectively decreasing operational costs.
According to the President of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, load-shedding might not accurately reflect the current situation.
“I am not aware if the telcos have commenced load-shedding, and I am not sure if it has been announced officially. None of the operators have made such announcements,” Emoekpere, told The PUNCH.
He emphasised that the real challenge was not operational losses but the sustainability of network services.
The ATCON president warned that operators face a mismatch between revenue and operational costs, citing that the real challenge was not just about operational losses but also the sustainability of network services.
“For instance, if a telecom company could afford to buy 3,000 litres of fuel last month but can only purchase 1,000 litres this month due to lower revenue, it may lead to reduced service levels. This is not a formal policy decision but a response to financial constraints,” he explained.
The Association of Licensed Telecom Operators of Nigeria and ATCON had previously argued in April that current tariffs were insufficient due to rising diesel prices, inflation, and currency devaluation.
They warned that without adjustments, the sustainability of the telecom sector was at risk, potentially impacting service quality and availability for consumers.
The Nigerian Communications Commission, the telecom regulator, has not approved any new tariff plans, emphasising that any adjustments must be justified and not adversely affect consumers.
The ATCON president further pointed out that although telecom companies had generated profits in the past, those profits had likely been used up, given that tariffs had not increased substantially in over a decade.
He stressed that any call for tariff increases reflected the need to address the financial pressures on the industry rather than an attempt to capitalise on past profits.
Emoekpere urged the government to take swift action if it plans to implement measures to assist telecom companies or increase tariffs.
The ATCON chair emphasised that any potential tariff hike was not meant to penalise consumers but was crucial for ensuring network sustainability.
“If telecom companies cannot cover their costs or recoup investments, their ability to provide services will be compromised,” he added.
The Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, did not respond to calls for comments on the matter.
Last week, the President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, told The PUNCH that a slight adjustment in tariffs would enable telecom operators to cope with the rising cost of imports and maintain service quality.