Victor Ezeja
Chief Executive Officer of Financial Derivatives, Bismarck Rewane, has said the proposed increase in tariff by telecoms companies would make the sector more sustainable.
Rewane said the proposed tariff increase would not be a “bad deal” for both telecoms companies and consumers.
Join our WhatsApp ChannelAccording to him, the tariff increase would stimulate the interest of investors, leading to increased investment which would make the industry sustainable.
The economic expert, who stated this when he featured on Channels Television Business Morning on Thursday, predicted that the tariff increase would be between 40 and 50 per cent which according to him, is “fair.”
He stated this while responding to comments by the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, regarding the proposed tariff increase.
Dr Tijani, who on Wednesday confirmed plans to increase telecoms tariffs, assured it would not be a 100 per cent increase.
Telecoms companies had proposed a 100 per cent tariff hike, citing high cost of operations in recent years. This triggered reactions by customers across the country who expressed concerns about the potential implications of the hike on their daily spend on telecoms services.
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Rewane said: “Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50% which is fair after so many years of static changes.”
He said the price of MTN shares went up by 10 per cent to ₦220 on Wednesday, pointing out that such development is being factored in by investors who are expecting good returns on their investments.
While re-echoing the Minister’s statement about the intention to make the industry more sustainable, Rewane highlighted that the regulator, the Nigeria Communication Commission (NCC), would ensure that the telecoms companies offer quality services to customers after the tariff hike.
“But more important to think about is the fact that because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly,” the economic expert further observed
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal. So, 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.”
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
