THE Nigerian Communications Commission approved a 50 per cent increase in call tariffs on Monday, which may raise the average cost of calls to N16.5 per minute.
Based on the 2023 national telephone traffic data, this hike could generate over N6.74tn in revenue for telecom operators in 2025 if call volumes remain stable, hence Nigerians may pay this amount to the firms.
However, this projection excludes the impact of free and discounted call promotions, which may alter actual revenue figures.
An analysis of data from the latest 2023 Subscriber/Network Performance Report by the NCC showed that in 2023, total outgoing telephone traffic was 205.3 billion minutes, while incoming traffic stood at 203.2 billion minutes.
The report read, “As of December 2023 total outgoing Local and National Traffic was 205,298,114,995.11 minutes while Total incoming Local and National Traffic was 203,187,588,876.00 minutes. MTN had the highest total outgoing and incoming Traffic of 122,667,600,437.00 and 123,762,501,615.00 minutes respectively in 2023.”
This implies that Nigerians spent about 408.5 billion minutes making local calls in 2023.
Since there was no fresh data yet for 2024, our analysis was based on the available data for 2023, which might vary for 2025.
Our analysis also excluded international calls, although Nigerians spent 1.5 billion minutes on international calls in 2023, according to the NCC.
Further analysis showed that MTN led the market, recording 122.7 billion minutes of outgoing traffic and 123.8 billion minutes of incoming traffic.
At the new rate of N16.5 per minute, MTN’s combined revenue from outgoing and incoming calls is projected to exceed N4tn, making it the primary beneficiary of the tariff adjustment and accounting for over 60 per cent of the market’s total revenue.
Airtel is expected to follow with a projected revenue of approximately N1.78tn, reflecting its strong share of both outgoing and incoming traffic.
Glo, the third-largest operator, is estimated to generate N536.2bn.
Smaller players, including Smile and Ntel, are expected to earn N5.7bn and N13.1bn respectively, affirming their minimal market influence.
9mobile (EMTS) is likely to generate about N105.6bn from its traffic volumes.
The projected N6.74tn revenue highlights the significant impact of the tariff increase.
Outgoing calls alone are expected to bring in N3.28tn, while incoming calls will contribute an estimated N3.23tn.
Despite the growing popularity of data services and over-the-top messaging platforms, voice calls remain a significant revenue driver for telecom operators.
MTN’s dominance in outgoing and incoming traffic reinforces its leadership position, with Airtel and Glo following as major contributors.
In contrast, smaller operators continue to face challenges, with limited market penetration and a smaller customer base impacting their revenue potential.
This newspaper further observed that the 50 per cent tariff hike approved by the NCC will likely raise the average cost of an SMS to N6, and significantly boost revenue for telecom operators in Nigeria.
Based on the 2023 SMS traffic data, the projected earnings for 2025 could surpass N137.84bn, assuming traffic remains unchanged.
According to the NCC’s 2023 annual report, a total of 22.97 billion SMS were sent and received during the year, representing an 11.38 per cent decline from the 25.92 billion recorded in 2022.
MTN accounted for the highest SMS traffic, with 8.21 billion sent messages and 8.57 billion received, bringing its total to 16.79 billion SMS.
With the revised tariff of N6 per SMS, MTN is expected to earn approximately N100.72bn, making it the likely largest beneficiary of the hike.
The telecom giant’s share of SMS traffic represents over 73 per cent of the total market, securing its position as the dominant player in the sector.
Airtel is projected to generate N26.26bn in revenue from its total SMS traffic of 4.38 billion, comprising 2.01 billion sent messages and 2.37 billion received.
This accounts for 19 per cent of the projected industry-wide earnings. Glo, with a total SMS count of 1.35 billion, is expected to earn N8.10bn, representing 5.88 per cent of the total revenue.
Meanwhile, smaller operators such as EMTS and Smile are likely to see modest revenues.
EMTS, with 458 million SMS, is projected to earn N2.75bn, while Smile, which recorded just 1.2 million SMS, is expected to generate N7.36m.
Combined, these smaller players contribute less than two per cent of the total projected revenue for 2025.
The telecom industry is projected to earn N137.84bn from SMS in 2025, driven by the tariff hike.
However, the new pricing may affect consumer behaviour, as more Nigerians may shift towards over-the-top messaging platforms such as WhatsApp and Telegram, which offer cost-free alternatives.
The Nigerian Communications Commission approved a 50 per cent tariff adjustment for telecommunications operators in response to increasing operational costs and prevailing market conditions.
According to a statement made on Monday by the NCC’s Director of Public Affairs, Reuben Muoka, the decision was made under the NCC’s regulatory powers as stipulated in Section 108 of the Nigerian Communications Act, 2003.
The approved adjustment falls significantly below the over 100 per cent increase initially requested by some network operators.