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Nigerian operators push for price hike to offset OTT losses

Nigerian operators push for price hike to offset OTT losses

Nigeria’s operators are looking to recoup the revenue that they have lost to OTT services and offset rising operating costs by doubling their tariffs.

Speaking on condition of anonymity, a source at the NCC (Nigerian Communications Commission) told The Daily Trust that  “the costs of expanding capacity and [operators’] networks have increased with the devaluation of the Naira against the US dollar, and most consumers now spend less on telecommunication services, especially voice calls, compared to previous years.”

An economic crisis in Nigeria has precipitated a long-term drop in monthly voice ARPU, which now stands at around $4 compared to $15 in 2004. In the same timeframe tariffs dropped from between NGN24 ($0.07) and NGN75 per minute to roughly NGN12.  Operators have voiced their desire to restore the voice rate to NGN24 per minute, as well as doubling the rate for 1GB of data per month from NGN1,000 to NGN2,000.

The Association of Licensed Telecommunications Operators of Nigeria has lamented this loss in revenue as a result of rising costs and increasing use of rival OTT services. The association’s chairman Gbenga Adebayo noted that a report by research firm Ovum forecast operators losing $386 billion globally between 2012 and 2018 as a result of OTT services.

However, the argument has been countered by the National Association of Telecommunications Subscribers, which claims that the country’s economic crisis should actually lead to lower tariffs.

The group’s president Deolu Ogunbanjo said: “I don’t think this is the right time to do any upward review. The government and its agencies, and the operators should be sensitive to the plight of the people. They should understand that we are just coming out of recession”.

Nigeria’s operators are set to receive sanctions if they are unable to pass financial and technical inspections, after Etisalat Nigeria lost its creditors after defaulting on $1.2 billion of debt.

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