MTN gives important reasons as it demands increase in tariff call, data tariffs

• In response to the naira's devaluation, MTN Nigeria is advocating for the endorsement of higher cellular tariffs
• According to the telecom operator, Without the approval of a new traffic system, there would be no incentives for more investments
• According to MTN's CFO, growth will be hampered and eventually negatively impacted if rates are not reviewed upward

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

MTN Nigeria is advocating for the support of higher telecom rates in reaction to the devaluation of the naira and the high cost of foreign exchange.

The CFO for MTN stated that if rates are not reviewed upward, it will impede growth. Photo Credit: MTN Nigeria
Source: UGC

According to the telecommunication company, there would be no incentives for more investments in the sector unless a new traffic structure was authorized.

This was said by MTN Nigeria's Chief Financial Officer (CFO), Modupe Kadri, during a panel discussion at the recently ended Nigeria Economic Summit Group (NESG), The Punch reported.

The panel spoke to the theme: “Navigating Business Growth in an era of volatility and uncertainty.”

Since all telecom technology are imported from overseas, he claimed that the devaluation of the naira has increased the cost of inputs. As a result, the cost of doing business has skyrocketed while tariffs have been the same for a decade.

Since the telecom industry is a major driver of other industries and accounts for 16% of the GDP, the CFO for MTN stated that if rates are not reviewed upward, it will impede growth and eventually have a negative influence on other sectors of the economy.

“Our business is mainly dependent on forex. The forex problem arose as a result of the policy to devalue or let the naira find its true level. The same thing happened in the petroleum industry – to get appropriate pricing for petroleum products therefore removing all subsidies. This meant that the government was feeling some pressure on the burden it was carrying and decided to offload it. In the telecoms industry, the problem still remains forex. We have suffered devaluation in the movement of the rate from about N400-$1 to N16,000-$1. We have established the letters of credit to import some equipment. We have contractual obligations which the CBN hasn’t fulfilled” he explained.“We have experienced forex losses. We are in a business to survive. But we operate in a regulated industry where you are not allowed to adjust your prices. Other sectors have moved prices over the years to survive devaluation but we haven’t moved our prices in the past 10 years yet we are supposed to continue providing these nice services that you enjoy. If we say there is full deregulation in the econo quality of services you all desire, it costs money because this equipment are imported. my, let things find their natural levels because there will be no new investments” if we continue that way he warned.

MTN, Airtel, Others Speak on Hike in Starlink internet subscription

Legit.ng reported that the Association of Licensed Telecommunication Companies of Nigeria (ALTON) has criticised Starlink’s decision to hike internet subscription prices without the Nigerian Communications Commission (NCC) approval, calling it an insult to the regulatory authority.

Legit.ng reported that Starlink, owned by billionaire Elon Musk, raised its monthly subscription fees by 97% from N38,000 to N75,000, including a 34% hike in hardware kits from N440,000 to N590,000.

The satellite internet service provider, with almost 24,000 subscribers, cited inflation as the reason for the price increase.

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Source: Legit.ng