Telecommunications operators in Nigeria are pushing for a shift from the existing uniform national tariff structure to a regional tariff regime, which would allow them to adjust pricing based on operational challenges in different states.
The proposal, discussed at the 7th edition of the Policy Implementation Assisted Forum (PIAFo) in Lagos, comes amid mounting concerns over high operational costs, multiple taxation, and security threats to telecom infrastructure.
Industry stakeholders note that a regional tariff model would ensure fairer pricing, rewarding states that create a business-friendly environment while making those that impose high costs on telecom operations pay more for services. This move, they believe, will compel some state governments to revise policies that have made telecom operations difficult, particularly in areas such as multiple taxation, Right of Way (RoW) charges, and bureaucratic bottlenecks.
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Right of Way Charges: A Major Concern for Telcos
One of the key operational challenges faced by telecom operators is the cost of Right of Way (RoW) charges, which refers to the fee levied by state governments for laying telecom infrastructure such as fiber optic cables. Ideally, these charges are meant to facilitate infrastructure development, but in many states, they have been inflated, becoming a revenue-generating tool rather than a means to support connectivity.
While some states, such as Kaduna, Ekiti, and Katsina, have reduced or eliminated RoW charges to encourage broadband penetration, others continue to impose exorbitant fees. These high costs, coupled with multiple layers of taxation, have significantly increased the cost of expanding telecom networks, especially in underserved rural areas.
The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo pointed out that some states make it extremely difficult for telecom companies to operate due to excessive taxation and infrastructure challenges. He stated that these issues should be reflected in the pricing of telecom services.
“We may have to reconsider our national tariffs and look at regional tariffs. If you are aware that the cost of doing business is high in a particular state and it’s impossible to negotiate with them, factor the cost of deployment in those areas into the cost of providing services,” Adebayo said.
Multiple Taxation and Security Threats Driving Cost of Operations
Another pressing issue for telcos is the rising cost of maintaining infrastructure due to multiple taxation and security challenges. In several states, telecom operators face levies from various government agencies, leading to an increase in the cost of operations. In some cases, local governments, state agencies, and even non-state actors impose fees on telecom infrastructure, making it expensive to deploy and maintain services.
Beyond taxation, telecom infrastructure is frequently targeted by vandals and criminals, further increasing the cost of service delivery. Operators often have to spend millions of naira to repair damaged sites and secure installations, with no financial compensation from the states where these incidents occur.
At the forum, discussions also focused on the need to safeguard telecom infrastructure. The convener of PIAFo, Mr. Omobayo Azeez, emphasized that the recent passage of the Critical National Information Infrastructure (CNII) Order by President Bola Tinubu was a milestone in strengthening Nigeria’s digital economy.
However, telecom operators insist that without a pricing model that reflects their operational costs, they will continue to struggle with financial losses and service disruptions.
The President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Tony Emoekpere, supported the idea of a regional tariff structure, stating that it is unfair for telecom companies to operate under a uniform national tariff when costs vary significantly across states.
“If it costs me extra to haul diesel from one part of the country to another, I should be able to add that cost to the service or you compensate me for that by making your environment attractive for me to operate,” Emoekpere explained.
A Necessary Push for States to Adjust Telecom Policies
While discussions on the feasibility of the proposal continue, many stakeholders believe that a regional tariff system is the right call, as it would put pressure on states that have refused to create a business-friendly environment.
Currently, telecom operators are at the mercy of state policies that often disregard the importance of affordable and accessible telecom services. By introducing a pricing structure that reflects the realities of each state, governments that have been reluctant to lower telecom taxes and RoW charges may be forced to revise their policies to attract better service at lower costs for their residents.
In states where RoW charges remain high, a regional tariff system would mean higher service costs for consumers. This, in turn, could push state governments to rethink their policies and align with the Federal Government’s broadband penetration agenda, which aims to expand connectivity across the country.
NCC’s Role in Approving a Regional Tariff Model
While telecom operators are eager to implement the regional tariff system, its approval lies with the Nigerian Communications Commission (NCC), which regulates pricing in the industry.
The NCC recently approved a 50% tariff increase for telecom operators after years of agitation over rising operational costs. However, the agency still requires telcos to operate under a national tariff regime, ensuring that subscribers pay the same rates regardless of location.
If the NCC approves a regional tariff structure, it would mark a major transformation in Nigeria’s telecom sector. While consumers in business-friendly states may enjoy stable or even reduced pricing, those in states with difficult operational environments could see a rise in telecom costs. However, there is concern that it will impact the affordability of telecom services since some regions fall into underserved areas with low disposable income.