9mobile CEO Obafemi Banigbe highlights rising costs and sustainability challenges in Nigeria’s telecom industry amid tariff hike discussions.
[dropcap]9[/dropcap]mobile CEO, Obafemi Banigbe, has voiced strong concerns about the proposed tariff hike in Nigeria’s telecom industry, emphasising the sector’s pivotal role in the nation’s economic growth and the challenges threatening its sustainability.
In a recent statement, Banigbe explained that the telecom industry faces significant pressures due to macroeconomic challenges, escalating operational costs, and declining profitability.
Also read: Telecom operators call for urgent tariff review to sustain industry
These factors, he warned, jeopardise the industry’s ability to invest in infrastructure and maintain quality services.
“The telecom industry is a critical enabler of economic growth, but we are facing unprecedented challenges,” Banigbe stated.
“We must find a balance between affordability and sustainability to ensure the industry remains viable and continues to provide quality services to Nigerians.
The current situation has not achieved that balance, which is why we are having this conversation about sustainability.”
Banigbe detailed how foreign exchange devaluation has dramatically increased the industry’s cost base. He noted that many capital and operational expenses are tied to foreign currency, while revenues are primarily in local currency.
“For instance, the Naira, which was previously around 400 to 450, has now officially surpassed 1,500—representing a nearly 350% increase in just the past two years,” he explained.
“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.”
Drawing from 9mobile’s experience, Banigbe highlighted how insufficient investment in recent years has led to a decline in service quality, pushing customers to competitors offering better services.
He warned that without addressing the revenue-cost imbalance, the industry’s ability to deliver expected service levels could deteriorate further.
“What we are saying is that every business must generate enough revenue to cover its costs and allow for reinvestment into the business,” Banigbe stressed.
“If we fail to generate sufficient revenue, we will have no choice but to borrow. Over the past two years, this is what many of us have been forced to do. However, this is not sustainable in the long term.”
The discussion around the proposed tariff hike has drawn mixed reactions, with some stakeholders concerned about the impact on consumers and others advocating for the measure to safeguard the industry’s future.
Banigbe underscored that maintaining viability is crucial to delivering reliable services, which ultimately benefits consumers and the broader economy.
As the telecom sector navigates these complex challenges, Banigbe’s remarks serve as a call for a comprehensive approach that balances consumer affordability with the industry’s sustainability needs.
Source: Read more at championnews.com.ng
