The Chief Executive Officer of Financial Derivatives Company Limited (FDC) Mr. Bismarck Rewane has backed the planned increase in the tariff of telecom service providers in the country like MTN, Globacom, Airtel and others.
Rewane, an economist, while speaking during a Channels TV interview program over the weekend justified the planned increase saying it is the only way to sustain the businesses.
The Telcos had a few weeks ago sought the approval of the industry’s regulator, the Nigerian Communications Commission (NCC) to hike their tariff,
Throwing his weight behind the planned hike in tariff, Rewane cited several factors. According to him, the last time there was a telecom price review was in 2013, and the prices of every other service in Nigeria have gone up in multiple-folds since then.
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Rewane said the current tariff regime is inhibiting the operators’ capacity to invest more in infrastructure, hence, the quality of their services has been deteriorating in recent times. He added that poor telecom services, would not only affect the telecom subscribers but the economy at large.
“The last time there was a tariff review for the telecom sector was 11 years ago, in 2013. At that time, we had a president by the name of Goodluck Jonathan. Ever since then, there’s been President Buhari and now President Tinubu, and the price of a bag of cement at that time was 1,800. Today that bag of cement is 7,500, it had gone higher by 4,066%.
“A bag of rice at that time was N12,000 and now it’s up to N77,000. That is a 525% increase. The price of diesel was N196 and it went all the way to N1,900, that’s up to 1,000% and now it’s down to N1,400, which is an increase of 614%.
“The Naira was exchanged at N157 to a dollar, today, it’s N1,400 in the parallel market, a depreciation of 763%. So, if you check cumulative inflation from 2013 to now, it is 387%. The minimum wage then was N18,000, today, the labour union is asking for N615,000.”
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Continuing, Rewane identified the telecom sector as officially contributing 10% to the Gross Domestic Product (GDP) of the country saying it is a critical form of social infrastructure, hence, people must be ready to pay the right price to enjoy the services. He added that in other countries where the right prices are being paid, they get better quality service compared to what Nigerians are getting currently
“Just like petrol and electricity, if you go across neighboring countries where their income and their GDP is lower than ours how come there are no queues in Benin Republic and no breakdown in power supply even in Togo?
“How come the telecom system works efficiently? if you underinvest in any sector, if you don’t manage that sector efficiently you will get low returns and inefficient outcomes so that is what it is you can’t eat your cake and have it. You have to pay to get quality service,” he said.
