Nigerians May Spend N6.74tn on Calls as NCC Approves 50% Tariff Hike

The Nigerian Communications Commission (NCC) has approved a 50% increase in call tariffs, raising the cost per minute to N16.5. This move is expected to significantly impact consumer spending and boost telecom operators’ revenue, potentially generating over N6.74tn in 2025 if call volumes remain stable.

Projected Impact on Telecom Revenue

An analysis of data from the NCC’s 2023 Subscriber/Network Performance Report revealed that Nigerians spent approximately 408.5 billion minutes making local calls last year. If these traffic levels persist, the new tariff could drive telecom operators’ earnings to unprecedented levels.

MTN, which led the market in 2023 with 122.7 billion minutes of outgoing calls and 123.8 billion minutes of incoming calls, is projected to earn over N4tn, accounting for more than 60% of the industry’s total revenue. Airtel follows with an estimated revenue of N1.78tn, while Glo could generate N536.2bn. Smaller operators, including Smile and Ntel, are projected to earn N5.7bn and N13.1bn, respectively, confirming their minimal market influence.

Nigerians Brace for Higher Call and SMS Costs

Beyond voice calls, the cost of SMS is also set to rise, with the average price increasing to N6 per message. The NCC’s 2023 SMS traffic data shows that a total of 22.97 billion SMS were sent and received during the year. If messaging patterns remain unchanged, telecom operators could earn an estimated N137.84bn in 2025.

MTN is expected to be the primary beneficiary, with a projected N100.72bn in SMS revenue, covering over 73% of total market earnings. Airtel is forecasted to earn N26.26bn, while Glo could see revenues of N8.10bn. Smaller players such as EMTS and Smile may generate N2.75bn and N7.36m, respectively, contributing less than 2% of the industry’s total SMS revenue.

Consumer Reactions and Potential Shift to Alternative Platforms

The significant tariff hike is likely to affect consumer behavior, with many Nigerians expected to cut down on traditional calls and SMS usage. Over-the-top (OTT) messaging platforms such as WhatsApp, Telegram, and Facebook Messenger provide cost-free alternatives, making them attractive options for users seeking to reduce their telecom expenses.

Additionally, businesses that rely heavily on SMS for customer engagement may explore digital communication solutions, including email marketing and app-based notifications, to offset rising costs. The increase in tariffs may also fuel demand for data-based calling services, further shifting revenue patterns within the telecom sector.

Regulatory Considerations and Market Implications

While the NCC justifies the tariff increase as necessary for sustaining telecom operations and improving service quality, concerns remain about its impact on affordability and accessibility. Consumer advocacy groups have urged the Federal Government to intervene, arguing that higher call and SMS costs could widen the digital divide and disproportionately affect low-income users.

Telecom operators, on the other hand, have defended the decision, citing rising operational costs, currency devaluation, and infrastructure maintenance expenses. Despite potential shifts in consumer behavior, voice calls and SMS remain critical revenue streams for the industry, reinforcing the dominance of major players like MTN, Airtel, and Glo in Nigeria’s telecom landscape.

As Nigerians adjust to the higher communication costs, the long-term effects of this tariff hike will depend on market responses, government interventions, and evolving consumer preferences in an increasingly digital economy.

Rationale Behind the 50% Tariff Adjustment

The NCC stated that telecom tariff rates have remained unchanged since 2013, despite inflation, foreign exchange fluctuations, and rising operational costs. This stagnation, the commission noted, has strained telecom operators, making it difficult to sustain quality services and invest in new infrastructure.

To balance the interests of both operators and consumers, the NCC approved a maximum 50 per cent increase, adhering to the tariff bands outlined in the 2013 NCC Cost Study and the 2024 Guidance on Tariff Simplification. The commission assured the public that the decision followed extensive consultations with stakeholders across both private and public sectors.

The Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, also weighed in, revealing that the government had initially considered an increase of 30-60 per cent, significantly lower than what telecom operators had proposed. With the 50 per cent hike now approved, industry experts predict that the cost of making phone calls will increase from N11 to N16.5 per minute, SMS charges will rise from N4 to N6, and 1GB of data will now cost N525, up from N350.

Consumer Backlash and Threat of Legal Action

Despite assurances from the NCC, consumer advocacy groups have pushed back against the tariff adjustment, warning that it will worsen the financial burden on Nigerians. Adeolu Ogunbanjo, President of the National Association of Telecoms Subscribers (NATCOMS), argued that telecom consumers were not adequately considered in the decision-making process.

Ogunbanjo expressed concerns over the potential negative economic impact, citing poor electricity supply and inflation as major existing challenges for Nigerian households. He emphasized that while a 5 to 10 per cent tariff increase might be acceptable, anything beyond that would be excessive.

“If this new tariff is implemented, we will take legal action against the NCC and the Federal Government,” Ogunbanjo warned. He further suggested alternative financing mechanisms for telecom operators, such as Initial Public Offerings (IPOs), where Nigerians could buy shares in telecom firms rather than bear the burden of increased tariffs.

Demand for Improved Service Quality

Another major concern among telecom subscribers is the quality of service provided by operators. The Association of Telephone, Cable TV, and Internet Subscribers of Nigeria, led by Sina Bilesanmi, stressed that any price hike must be accompanied by tangible improvements in network quality and connectivity.

Bilesanmi noted that while the association understands the need for industry sustainability, they will closely monitor service quality after the new tariffs take effect in February 2025. He warned that if network providers fail to upgrade infrastructure and enhance customer service within two weeks of the rollout, the association will initiate legal proceedings against telecom firms, the NCC, and the Federal Government.

“We support the adjustment only if it leads to better service delivery. Otherwise, we will hold the authorities accountable,” Bilesanmi declared. He added that rejecting the tariff increase entirely could jeopardize the telecom sector, potentially leading to service shutdowns.

What’s Next for Nigerian Telecom Users?

As the February 2025 implementation date approaches, both telecom operators and consumer groups are preparing for the impact of the tariff adjustment. The NCC has assured transparency in its execution, emphasizing that telecom companies must educate consumers about the new rates and provide a measurable improvement in service delivery.

While the telecom sector remains a critical driver of Nigeria’s digital economy, there are growing fears that the tariff hike could widen the digital divide, making mobile and internet services less accessible to low-income Nigerians. Consumer groups have vowed to monitor developments closely and use all legal channels to ensure that subscribers receive value for the increased cost of services.

With mounting pressure on the NCC and the telecom industry, the coming months will be crucial in determining whether the tariff adjustment will truly benefit both service providers and consumers—or whether it will spark further economic hardship and legal battles.