TECHDIGEST – The telecommunications landscape is bracing for possible adjustments in service costs due to mounting energy expenses.

The cost of fueling communication networks is projected to surge to N38 billion in August, prompted by a spike in diesel prices to N950 per liter.

Recent reports from oil marketers indicate that the cost of Automotive Gas Oil (diesel) will escalate to a range of N900 to N950 due to ongoing foreign exchange challenges and the recent imposition of a 7.5 percent Value Added Tax (VAT) on the commodity.

Before the introduction of VAT on diesel, it was sold at N650 per liter, according to the Natural Oil and Gas Suppliers Association of Nigeria.

Benneth Korie, President of NOGASA, voiced concerns over the diesel price surge, stating, “Diesel prices are now approaching N900 to N950 per liter, depending on the source.

This increase is attributed to the scarcity of dollars. It’s imperative for authorities to address this issue, as it poses potential negative impacts.

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“The telecom industry, reliant on numerous base stations, is a significant diesel consumer in the nation, utilizing approximately 40 million liters per month to power its communication sites.

“At the close of 2022, the Nigerian Communications Commission reported 127,294 base stations across Nigeria. Industry experts reveal that each station operates two diesel-powered generators.

“The diesel price rise to N900–N950 per liter implies that operational expenses for operators will surge to between N36 billion and N38 billion monthly, which may influence telecom service costs.”

Operators have repeatedly expressed concerns about diesel’s high cost affecting their services.In the recent ‘State of the Industry’ report, the Nigerian Communications Commission unveiled a 21.64 percent surge in telecom operators’ operational costs in 2022, reaching N2.09 trillion from N1.72 trillion in 2021.

In 2022, the Association of Licensed Telecommunications Operators of Nigeria requested a tariff increase from the NCC due to a 40 percent rise in business expenses. Energy costs played a pivotal role, contributing to a 35 percent growth in operating expenses.

By April 2023, Gbolahan Awonuga, Head of Operations at ÀLTON, affirmed that the rising diesel expenses were affecting telecom operations.

He emphasized, “Power is a critical factor that influences every aspect. While other economic factors have driven up costs, telecom tariffs remain unchanged.

“This creates challenges as revenue drops and input prices shift, yet tariffs remain static.

“Telecom experts continue to voice concerns that soaring input costs jeopardize the sector’s sustainability.”

Gbenga Adebayo, President of ALTON, explained, “To ensure the viability of our industry, prices must reflect production costs. It’s logical that we revise rates after consulting stakeholders, considering the current input costs.”

Adebayo emphasized the link between input cost fluctuations and price adjustments, underscoring the need for sustainable pricing in line with production realities.

He noted that regulators are being kept informed of essential details to facilitate informed decisions.

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TECHDIGEST – Electronic-related financial crime is gaining massive ground in the country. Some reports have revealed that the menace have cost Nigerians over N25.5 billion in just four years.

Breaking it down, a non -governmental organisation, the Anti-Corruption Agencies of Nigeria, said each Nigerian loses the equivalent of N35,000 yearly on financial crimes.

It aggregated the loss to amount $18 billion when spread across illicit Financial Crimes like bribery, Internet fraud and non-payment of taxes.

However, the issue has become so worrisome in the Information and Communications Technology, ICT sector, that the Nigerian Communications Commission, NCC can no longer have any of it.

At the weekend, during the Second Quarter Industry Consumer Advisory Forum (ICAF) in Lagos, the commission appeared to hold the telecom operators partly responsible, subtly warning them to improve on their networks’ security architecture or take the blame for the risk and threat posed by the rising menace.

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NCC believes that if the telcos improve on the security architecture of their networks, unwarranted access of such crimes will be effectively blocked.

The commission said unequivocally that it was no longer comfortable with the way Nigerians lose their hard-earned money to fraudsters, who take advantage of the vulnerabilities on their network platforms.

But in a swift response, the umbrella body of the telcos, the Association of Licensed Telecom Operators in Nigeria, ALTON, differed with the commission.

The association did not agree that the network architecture of the telcos has anything to do with the rising menace considering the huge investments operators have made over time in advancing their networks.

Executive Secretary of the association, Mr Gbolahan Awonuga, used the opportunity of a panel discussion on a paper titled: “Combating e-fraud in telecom platforms: Building consumer confidence in the digital economy” to push back the narrative which tends to heap the blame on the doorstep of the telcos.

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TECHDIGEST – The Association of Licensed Telecommunication Operators of Nigeria (ALTON), umbrella body of licensed telecoms operators has explained why the Mobile Network Operators (MNOs) have asked the industry regulator – the Nigerian Communications Commission (NCC) – to approve a 40 per cent increase in the cost of calls, SMS and data.

ALTON said the telecommunication companies based their request for 40 per cent hike on tariffs for data and calls on the rising operational costs in the country.

ALTON in a letter to the Nigeria Communication Commission (NCC), titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ said the decision to hike charges was based on an increase in energy costs, which has raised their operating expenses by 35 per cent.

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Their proposal means the price cap on phone calls will increase from N6.4 to N8.95, while SMS costs will also increase from N4 to N5.61. Gbolahan Awonuga, head of operations, ATLON, said the increase in charges was long overdue.

“We depend on diesel as our main energy source to keep our power stations running because we don’t rely on the national grid. And diesel price was moved from N220 per litre to N750 per litre.

“Since 2003, we have not increased our charges and this is nothing we can do except to start retrenching our staff to cut down costs.

“This is why we are appealing to the NCC to re-consider and make amends to the charges to reflect the prevailing realities,” he said.

The telecommunication industry is grappling with the impact of the economic recession in 2020, as well as the ongoing Ukraine/Russia crisis.

The recent introduction of five per cent excise duty on telecom services has also worsened the problem of multiple taxes and levies in the industry.

Source : Tech economy.ng

The post Why Telcos Are Asking For 40% Tariff Hike On Data, Calls – ALTON appeared first on Tech Digest News.

TECHDIGEST – The operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) on Monday expressed concerns about the shutting down of telecommunications facilities in Kogi State as a result of disputes arising from what it described as unusual taxes and levies demanded by the Kogi State Internal Revenue Service (KIRS).

ALTON said the issue is likely to lead to a total communications blackout in the entire Kogi State, parts of Abuja the Federal Capital Territory and possible impact on service availability in some parts of Nassarawa, Benue, Enugu, Anambra, Edo, Ondo, Ekiti, Kwara, Niger States.

ALTON’s chairman and head of operations, Gbenga Adebayo and Gbolahan Awonuga respectively, said in a statement that a number of critical telecommunications sites belonging to its members have been closed and sealed up by Kogi State Government in an attempt to increase its Internally Generated Revenue IGR Collection.

This action, according to the telecoms body, followed an ex-parte court order obtained by the KIRS over unsubstantiated allegations that operators were in default of tax payments to the state government.

“As a result of these actions by the state government, our members are unable to refuel power generators in these sites, a situation which has led to outage of over 70 sites including hub sites across parts of Kogi State. Now, with likely impact on the nine states surrounding Kogi (namely:- Nasarawa, Benue, Enugu, Anambra, Edo, Ondo, Ekiti, Kwara, Niger States. These are States sharing borders with Kogi State), and Abuja the FCT inclusive,” Adebayo and Awonuga said in the statement.

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“We are very concerned that this indiscriminate action has the potential of further leading to a total telecommunications outage in Kogi State with neighbouring states and parts of the Federal Capital Territory adversely impacted.”

The body said its members have settled all statutory levies and taxes due to the Kogi State Government and have taken necessary steps to comply with local laws that govern business activities within Kogi State.

The post Blackout Looms In FCT, Nine States As Kogi State Shuts Down Telecom Hub Sites appeared first on Tech Digest News.