Despite facing significant revenue challenges, Nigerian telecommunications companies have denied recent allegations of adopting load-shedding as a strategy to control escalating operational costs.
Load-shedding, commonly used by electric power providers, involves reducing the power supply to certain areas to alleviate stress on the energy source when demand exceeds supply. This approach temporarily cuts off power in some regions to maintain the overall stability of the system.
Recently, telecom operators warned that the severe financial pressures they are currently facing might force them to consider similar measures.
The Association of Licensed Telecom Operators of Nigeria, ALTON, and the Association of Telecommunications Companies of Nigeria, ATCON noted that with the current rising diesel prices, inflation, and currency devaluation, without tariff adjustments, the sustainability of the telecom sector could be at risk, potentially leading to diminished service quality for consumers.
Speaking at a recent event hosted by Financial Derivatives Company, FDC, titled “Telecom Industry 2.0: The Next Investment Frontier in Nigeria,” the Chairman of ALTON, Engr. Gbenga Adebayo, noted that Nigeria’s economic challenges have severely impacted telecom operators. He warned that the situation might soon force telcos to selectively service their facilities, resulting in areas with better service while others will experience reduced service quality.
Following these remarks, rumors began to circulate that telecom operators had already started implementing load-shedding.
However, ATCON President, Tony Emoekpere, has categorically dismissed these claims, stating that no telecom operator has announced or initiated such measures.
Emoekpere emphasized that the real issue lies in the sustainability of network services, as telecom companies struggle with a widening gap between revenue and operational costs.
“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,” Emoekpere explained.
He further noted that while telecom companies have generated profits in the past, those profits have likely been exhausted, especially since tariffs have not significantly increased in over a decade. He stressed that any call for tariff increases is intended to address the financial pressures on the industry, rather than to exploit past profits.
Emoekpere urged the government to act swiftly if it intends to implement measures to support telecom companies or approve tariff increases, highlighting that such actions are crucial to maintaining network sustainability.
The Nigerian Communications Commission, NCC, has not yet approved any new tariff plans, insisting that any changes must be justified and should not adversely affect consumers.
-.