By Adedapo Adesanya
Stakeholders in the Nigerian telecommunication sector are collectively calling for a price hike amid challenges faced by operators across the country despite the growth experienced over the past two decades.
This call was made by the chief executive of MTN Nigeria, Karl Toriola; and his counterpart at Airtel Nigeria, Mr Carl Cruz, at the Telecom Townhall Forum hosted by Financial Derivatives Company (FDC) on Tuesday.
Mr Toriola said the sector was ‘in a deep crisis’ and now threatened by rising costs and unsustainable pricing, making a price increase an ‘absolute necessity’.
“The telecoms sector has faced escalating costs across the board — from the cost of capital to the soaring expenses of maintaining infrastructure like base stations and diesel generators,” Mr Toriola said.
“Without adjustments to pricing, the industry’s ability to function and attract investment is in jeopardy,” he added.
Mr Toriola stressed that the static pricing of the past 11 years was no longer tenable, especially in an inflationary environment with forex devaluation.
“There’s no way under the surface of the earth, in the kind of inflationary environment and forex devaluation that we’ve seen, that an industry can maintain prices the same for 11 years,” he said.
On his part, Mr Cruz said there could be a possible cut down in investments in Nigeria due to the margins compared to other markets where Airtel operates.
“We are beginning to have that conversation with shareholders on whether to continue the pace of investment in Nigeria because, admittedly, the capital being invested in Nigeria is being compared to capital being invested in other markets,” he said.
He then called for swift and decisive action to prevent the collapse of the industry.
Also speaking, Mr Kazeem Oladepo, vice president at IHS Towers, noted that “The market dynamics and macros have not been the same over the past five years, so there’s only so much that we can extract value from these players.”
