Bismarck Rewane, CEO of Financial Derivatives, has defended the proposed telecom tariff increase, arguing that it could boost economic output and help reduce inflation.
During his appearance on Channels Television’s Business Morning on Thursday, Rewane highlighted the potential benefits of the rate adjustment, which telecom operators have suggested and the Nigerian Communications Commission (NCC) is currently reviewing.
Rewane explained that the tariff increase would help reduce inflation by boosting productivity. “Yes, it helps to reduce inflation because it increases productivity,” he said.
Read also: Nigerians should brace for hike in telecom tariffs, but not by 100%: Minister Tijani
Telecom operators have proposed a 100 percent tariff hike to cover rising operating costs, including inflation and service delivery charges. The proposal follows an earlier announcement by Nigeria’s Minister of Communications, Innovation, and Digital Economy, Bosun Tijani. The NCC is expected to finalise the details soon.
The proposed rate increase, according to Rewane, is a reflection of investor confidence in the industry.
“Yesterday, the price of MTN shares went up by 10 per cent to N220. Investors have already factored that in and are expecting a lot of good goodies,” he said.
“Telecom tariff hike will make the sector viable”
He underlined that the rise, together with further investments, would help make the telecom sector viable, which would indirectly raise output and productivity.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal,” Rewane added.
He recognised the consensus among regulators, operators, and policymakers around the necessity of sustainability in the telecom industry.
“We heard from the policymaker, Bosun Tijani, who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service.”
Rewane, however, predicted a more mild adjustment of between 40 and 50 per cent, dismissing the possibility of a 100 per cent hike.
“Will they get 100 percent? No, they will definitely not. We suspect that we are likely to see something between 40 per cent and 50 per cent, which is fair after so many years of static changes,” he said.
Read also: Airtel Nigeria CEO pushes for tariff increase to ensure telecom sector’s sustainability
Meeting to discuss telcos’ sustainability and consumers’ affordability
A meeting with telecom consumer groups has been arranged by the Nigerian Communications Commission to discuss the proposed pricing increase.
The discussions aim to find a balance between ensuring the sector’s sustainability and addressing consumers’ affordability concerns.
After the talks, the NCC will announce its final decision on the tariff adjustment, weighing both consumer protection and the sector’s long-term viability.