By Dr. Roseline Oluwaseun Ogundokun

When the Global Systems for Mobile Communications (GSM) was first introduced into the Nigerian market in 2001, the acquisition of a cellular device swiftly became a badge of distinction, signifying one’s immersion in the technological revolution of the 21st century. The devices became the exclusive purview and financial burden of the elite, relegating many middle-class households to sharing a solitary device among its members. It was expected.

The cost of procuring a Subscriber Identity Module (SIM) hovered between N40,000 to N50,000 (about $384 to $480 at the time), while iconic models such as the NOKIA 3310 and Samsung series commanded prices exceeding N80,000 (about $769) to over N100,000 (about $961). At inception, networks operated within the 900 and 1800 MHz spectrum with a billing structure set at about N50 per minute, until the introduction of the per-second billing system. As such, barely 10% of the country’s 125-million population could afford to own a device with regular credit recharge.

But before the arrival of such devices with an unattainable luxury status for the economically disadvantaged, Nigerians had long grappled with problematic services from the oft-maligned Nigerian Telecommunications Limited (NITEL). Until 2001, NITEL’s 16-year operation was plagued with citizen discontent over poor management as it maintained monopoly over Nigeria’s telecommunications and data services. The arrival of GSM — spearheaded by MTN, Econet (now Airtel) and MTEL months apart in 2001, and Globacom two years later in 2003 — to relieve the troubled service provider, therefore, changed everything.

In mobile phone accessibility and internet service affordability progress since that time, the numbers have been staggering. By 2022, two decades after GSM introduction, more than 222 million mobile phone subscribers existed in Nigeria according to the Nigerian Bureau of Statistics and the Nigerian Communications Commission (NCC), out of which over 215 million were active. The projections for the future are just as phenomenal. A steady surge in smartphone adoption is expected across the country from 2024 to 2029, with the user base estimated to reach a new peak in the next five years.

Network subscriptions are also at the lowest they have ever been. Mobile data subscriptions in Nigeria, today, are available for as low as N25 while call rates go as low as 9 kobo per second. However, considering Nigeria’s frail economic climate in recent years, providing affordable services to citizens while maintaining high-standard infrastructure presents the greatest challenge for the telecommunications industry and operators in the country.

Nigeria’s economy has experienced two major recessions over the last 10 years and currently faces one of its most difficult periods of uncertainty. Recent market conditions and currency devaluation have plunged the value of the Naira in the foreign exchange market, resulting in skyrocketed prices of commodities. Unfortunately, the telecommunications sector, which contributes approximately 16% to Nigeria’s GDP, is, like other sectors, not immune to the profound repercussions of the prevailing economic upheavals.

The telecoms industry, like many others in the country, is heavily reliant on foreign exchange (FX) for the procurement of essential equipment, infrastructure, and technology. With a significant portion of telecom equipment and services being imported from foreign markets, fluctuations in currency exchange rates directly impact the cost of operations for industry players. As the value of the Naira fluctuates against major currencies such as the US Dollar and Euro, the cost of procuring equipment and services denominated in foreign currencies escalates, placing immense strain on the financial resources of telecom companies.

Mobile network operators in the telecommunications sector, whose tariffs are rigorously regulated by the NCC, therefore, face a dilemma in balancing investments towards sustaining quality and affordable services for their vast subscriber base with their goal of achieving profitability. For a sector battling various environmental and infrastructural impediments including frequent fibre cuts due to road construction and vandalism, right-of-way challenges, and exploitative rent-seeking practices, maintaining operational efficiency amidst prevalent economic adversities become increasingly daunting.

None of these existing challenges are alien to industry regulators and stakeholders. Operators’ advocacy for critical infrastructure protection in the ICT/telecommunications sector in recent years has especially served as a striking illustration of a cry for proactive actions to curtail the profound financial impact of such obstacles on its operations. Yet, while these challenges persist, mobile network operators have remained unflinching in their commitments to ensuring seamless connectivity, service reliability, and pricing affordability for their subscribers.

Despite Nigeria’s headline inflation rate surging to a 27-year peak of 29.9% in December 2023 and reaching 33.2% in March 2024, the telecoms industry, compared to other sectors adeptly adapting to Nigeria’s changing market conditions, continues to find itself traversing the intricate terrain of regulatory compliance and financial viability. In the mobile market which maintains a strong connection to the telecoms sector, for instance, prices of mobile phones, today, have nearly doubled to reflect the rising cost of production and import, while call and data tariffs largely remain the same they have been for over a decade.

A similar rise in cost has been evident in food prices which increased to over 30% in February, impacting the fast-moving consumer goods (FMCG) sector. The sector has since adjusted, with FMCG corporations including brewing companies increasing product prices in tandem with the high cost of raw materials and production. Companies in other sectors providing domestic consumer needs, such as Pay TV companies and Discos, have also duly followed suit by conducting price reviews in recent times.

While these price adjustments may be inconvenient for consumers due to limited purchasing power, they are more than necessary for businesses to continue to meet demands, deliver value to shareholders, and contribute significantly to the Nigerian economy.

It is especially pivotal to recognise the broader socio-economic implications for Nigeria if the telecoms sector sticks with its pricing plans as other sectors adapt. The industry is reputable for its crucial role in driving economic growth, creating employment opportunities, and improving digital inclusion efforts across the country.

Notably, over 15,000 people have been directly employed by licensees in Nigeria’s $75.6 billion telecoms sector, according to a December 2022 report by the NCC. Also, as of second quarter 2023, the Information and Telecommunications industry ranked highly among activity sectors contributing the most to the country’s GDP. Not least of mobile service providers’ critical contributions to socio-economic issues is their position at the forefront of Nigeria’s digital inclusion ambitions, which sees them providing more than 83 million citizens with the opportunity to benefit from prompt information access and exchange necessary for increased social and business productivity.

A lack of adjustments within the sector amidst FX-dependent pressures and rising inflation will indubitably pose a threat to these transformative indicators in the next few years. When telecom companies struggle to maintain and expand their infrastructure, there are higher chances of  network congestion, dropped calls, and slow internet speeds that can undermine productivity, hinder business operations, and diminish the overall quality of communication services. Operators’ ability to invest in infrastructure upgrades, network expansion, and technological advancements could be significantly hampered, significantly impacting coverage and service quality.

They can’t afford to test consumers’ patience in this regard.

Quality of Service (QoS) in the sector is, indeed, deemed non-negotiable among consumers. Regardless of any situation within or beyond their control, operators are expected to uphold high standards of service delivery to remain competitive and retain customer loyalty, and any compromise can have far-reaching consequences. But maintaining and improving on progress made thus far in the sector would be impossible without access to adequate financial resources for further investments. It is, as such, a critical time to employ new adaptive strategies for the sector to achieve profitability and survive in an increasingly competitive landscape.

Operators such as MTN Nigeria, Airtel, Globacom, and 9Mobile have commendably demonstrated an understanding of the grim economic situation’s impact on citizens’ spending power by adhering to regulators’ rules and showing restraint in pushing for higher charges. However, their display of empathy may prove to be their Achilles’ heel in a brutal business and economic climate. Therefore, the review of tariffs to reflect new economic realities, despite regulators’ reluctance, may be long overdue.

At this critical juncture, the onus is on regulators to ensure that consumers are adequately informed about the imperative need for an upward revision of tariffs to secure the industry’s survival. This revision would provide crucial funding for network infrastructure upgrades, necessary for the continued delivery of services.

A measured review of current tariffs, with pricing plans that are adaptive and responsive to the evolving business and economic climate, would enable the industry to mitigate potential socio-economic and business risks. However, regulators must strike a delicate balance between consumer protection and the sustainability of the telecom industry.

The telcos have expressed their readiness to collaborate with regulators on reasonable adjustments in call and data tariffs to mitigate the cost of running their networks. As the Association of Licensed Telecommunications Operators of Nigeria (ALTON) recently stated, “For a fully liberalized and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.”

As economic pressures on the sector intensify, telcos hope that their concerns will be understood, and urgent action taken to ensure their continued capacity to offer improved services, before the damaging impact of inaction becomes more pronounced than imagined.

Dr. Roseline Oluwaseun Ogundokun serves as a lecturer and SDG 4 Cluster Team Lead at Landmark University’s Department of Computer Science. Additionally, she holds the position of Multimedia Engineering and AI Researcher at Kaunas University of Technology in Kaunas, Lithuania.

Metrodigital Limited, parent company of Silver Lake Television (SLTV), has affirmed its commitment to fostering competition and providing affordable alternatives for consumers.

This is in a bid to the monopoly of the dominant operator in Nigeria’s pay television market.

Dr Ifeanyi Nwafor, managing director of Metrodigital Limited, made the commitment when he was honored with ‘Salute to Courage Award’(SACA) at the SLTV post launch reception organised by Camroll Quest Limited in collaboration with friends and associates of the SLTV boss during the weekend in Abuja.

The award was for his resilience and patriotic stance in ensuring that Nigerians enjoy good but affordable pay TV service.

During the post-SLTV launch reception and awards ceremony, Nwafor emphasised the importance of ending the monopoly to drive down prices and improve service quality.

He highlighted the positive reception from Nigerians, who now have access to alternative platforms offering comparable channels at more affordable rates.

“I’m expecting that other companies would also come in and when there’s serious competition, you better work on services provided to your customers. Nigerians are very happy that the monopoly has been broken, you can get to other platforms and get some channels you get in DStv and GOtv at a cheaper rate.

“SLTV is a platform for innovation. We want Nigeria to be a leader in this industry, and not only in Nigeria but across the globe. Just like Nigerian music making waves all over the world, we are very sure that this industry has higher potential. We need many companies to spring up and be able to succeed not only in Nigeria but also in other countries,” he said.

Nwafor expressed SLTV’s ambition to drive innovation and position Nigeria as a global leader in the industry. Drawing parallels with the success of Nigerian music on the international stage.

He underscored the untapped potential of the television industry and called for the emergence of more indigenous companies to thrive not only in Nigeria but also in other countries.

Addressing concerns about subscription price hikes, Nwafor reassured subscribers of Metrodigital Limited’s commitment to affordability, stating that they are mindful of Nigeria’s economic challenges and have no plans for price increases in the foreseeable future.

Nickky Onyeri, chief operating officer of Camrol Guest Limited, commended Metrodigital Limited for its contributions to Nigeria’s economic growth and credited the supportive environment provided by the government, particularly acknowledging the efforts of Bola Tinubu in renewing hope for the nation.

“This is coming within one year of his government, if he is not providing that environment, I’m sure this could not have been possible.

Onyeri said, “We must commend Tinubu for all the support to all Nigerians who are committed to renewing the hope of Nigeria.”

Abubakar Jijiwa, chairman of the occasion, urged SLTV to prioritise quality control and remain competitive in the global market. He emphasised the importance of continuous innovation to stay ahead of competitors and maintain consumer satisfaction.

Malam Ali Muhammad Ali, managing director of the News Agency of Nigeria (NAN) has assured that the agency will work to promote SLTV, indigenous satellite television, in the country.

Ali gave the assurance when Dr John Nwafor, managing director, Metro Digital Limited, the operator of SLTV paid him a working visit on Friday in Abuja.

The managing director said that promoting indigenous brands would ensure an inclusive development of the country and encourage consumers to buy-in to local products.

“We identify with your goal, which is why we will always tell stories that promote indigenous initiatives.

“NAN is very reliable and trusted brand, and will always be on the side of the underdog, we will always be on the side of the truth.

“Rest assured that this is home and the agency is open to any kind of partnership,’’ he assured.

He further said that the agency was also working on rebranding its local and international offices across the globe, to tell Nigerians and Africans stories inclusively.

According to him, presently we are working on repositioning the agency to compete more favourably with other global brands and work smart.

“We are already positioning to face the impending challenge of Artificial Intelligence and we are looking at having a good automated news content.’’

Earlier, Nwafor, commended the efforts of the Federal Government for encouraging indigenous satellite television companies as SLTV in the network industry.

He explained the process began from former President Muhammadu Buhari’s administration, with the modification of the National Broadcasting Corporation’s (NBC) Codes and Act to accommodate local players.

“The government tried to open up the industry and encourage local players to be part of the satellite television ecosystem, and the government effected some changes in the NBC code and Act.

“The Copyright Act was also modified to encourage Nigerians to participate in the industry, because we believe that when the industry is opened up, the consumers will win.

“Then, former Minister of Information and Culture, Lai Mohammed invited us to look at the framework and see how we can participate.

“It was in that process we applied for licence for our Direct-to-Home transmission paid television, which is SLTV,’’ he said.

He further said the action was followed with a mandatory court order to ensure that the reviewed NBC code was adhered to and implemented.

Nwafor said that the intervention by the government was to end exclusivity of content by few giant satellite television companies.

The SLTV boss appreciated the management of NAN for telling the story of the emergence of SLTV, adding that indigenous satellite television networks would thrive with the support of Nigerians.

Highlight of the visit was the presentation of three SLTV decoders and dishes to the management of NAN.