1 day Ago By Segun Odunewu
Obafemi Banigbe, CEO of 9mobile, has reignited discussions on the proposed tariff hike in Nigeria’s telecom sector, underscoring its critical role in driving economic growth while addressing the industry’s sustainability challenges. Banigbe’s comments have added a new layer of urgency to the ongoing debate, as he warns of significant threats to the industry’s viability due to mounting economic pressures. Speaking on the challenges facing the telecom industry, Banigbe highlighted several key issues, including macroeconomic instability, escalating operational costs, and shrinking profitability.
These challenges, he stated, are eroding the sector’s ability to invest in critical infrastructure and maintain high-quality services. “The telecom industry is a critical enabler of economic growth, but we are facing unprecedented challenges. We must find a balance between affordability and sustainability to ensure the industry remains viable and continues to provide quality services to Nigerians,” Banigbe said.
The CEO pointed to the sharp depreciation of the Naira as a primary driver of rising costs. “For instance, the Naira, which was previously around 400 to 450, has now officially surpassed 1,500—representing a nearly 350 per cent increase in just the past two years. This foreign exchange devaluation has caused our costs to surge.
Even though the industry is seeing growth in top-line revenue, the increase in local currency revenue has not kept pace with the rising cost base,” he explained. Banigbe argued that the proposed tariff hike is not just a matter of business profitability but a necessity for the industry’s survival. He emphasized that without sufficient revenue to cover costs and fund reinvestments, the quality of telecom services will deteriorate, ultimately impacting consumers and businesses that rely on these services.
Telecom experts and industry stakeholders have expressed mixed reactions to Banigbe’s remarks. While some consumer advocacy groups worry that higher tariffs could strain household budgets, industry analysts agree that the sector’s sustainability is at risk without adjustments. Dr.
Adewale Martins, a telecom economist, said, “The sector operates on razor-thin margins, and with the current economic climate, it’s not surprising that operators are struggling. A tariff adjustment may be necessary, but it must be done in a way that considers consumers’ purchasing power.” Similarly, technology analyst Funmi Adebayo stressed the importance of reinvestment in infrastructure.
“Without adequate revenue, operators cannot invest in expanding their networks or improving service quality, which would eventually hurt consumers and the economy at large,” she said..
