Telcos consider tariff hike as diesel price shoot up

Telecommunications service providers under the auspices of the Association of Licensed Telecoms Operators of Nigeria have stated that if the price of fuel continues to climb, a pricing review for telecom services may be implemented.

Gbenga Adebayo, the Chairman of ALTON, said this in an interview.

According to him, the telecommunications industry is one of the country’s largest consumers of fuel.

He said that the recent increase in fuel costs and unavailability of the product has already had an impact on the industry.

He said, “It is already impacting us and very significantly so. We are one of the industries that have the highest consumption of diesel across the country.

“Our need is not just in the major cities; it is all across the country. Diesel is required in all the places that require services. We are already significantly impacted. And it is not just about the high costs, it is also about availability. Suppliers are beginning to find it difficult to supply the commodity because of scarcity.

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“When they find, costs of haulage have gone up. The cost of procurement of the diesel itself has gone up significantly. We are actually in a very bad situation. And how this will play in end-user pricing requires us to follow the right channel, the regulatory procedure for conveying our complaint to the regulator.”

Telcos, according to Adebayo, would continue to guarantee that there are no service outages in the country. However, he cautioned that if the current diesel problem persists, a tariff revision may be required.

He stated, “The diesel situation is a problem at this time. We are doing all that we can to ensure the business continues as usual in all cases and other every circumstance. The assurance for the public is that there would not be a time of outage because of the current diesel crisis. What I cannot assure is that at some point there may not be a consideration for some form of tariff review.

“I cannot guarantee that it will not happen sometime in the near future. I cannot guarantee that. But as it stands today, I will reassure the public that there would be continuous service at all times.

 “We will continue to solve the problem to the best of our ability. We certainly need to approach the government for some intervention at some point. We are where we are. All that we are doing at this time is to ensure there are no disruptions to service.”

According to a source at one of the country’s telecommunications businesses, the operating climate for telcos has become more difficult. If the current problem continues, the insider added, service outages may occur.

According to the source, “For instance, we have about 20,000 base transceiver stations across the nation, and each one of them has two industrial generators.

“You can imagine what it must be costing to fuel two generators in over 20,000 places. It is a lot. As you are aware, we do not directly manage those stations anymore. But irrespective of who is managing it, the cost has definitely been impacted. Operating is more difficult now.

“In the long-term, this will cause service disruptions. We might have to renegotiate contracts with those helping us manage to the stations. As you know our call rates are regulated, meaning there is a ceiling and a floor. We cannot because of this change our call rates.”

The price of fuel has risen to N850/litre and is expected to rise further. In Lagos, diesel cost N350 a litre in January.