Telecom Operators Lament Poor Electricity Supply, Spend N360 Billion on Diesel Cost

Telecom Operators Lament Poor Electricity Supply, Spend N360 Billion on Diesel Cost

  • Operators telecom services in Nigeria has cried out to the Nigeria Communications Commission (NCC) over the high cost of running operations in Nigeria
  • According to the umbrella body of telecom operators, the Association of Licensed (ALSTON), they spend about N360 billion annually in diesel every year
  • ALTON cited the high cost of diesel for the recent proposed tariff increase in calls, SMS and data by the operators in Nigeria

The telecommunication companies have cried out to the Nigeria Communications Commission (NCC) over the poor electricity supply in the country.

They said that the cost of running and powering telecom services across the country has jumped by 233.33 per cent in recent months to about N360 billion every month.

Telecom operators, ALTON, Diesel, NCC
Telecom operators lament high energy cost Credit: Tara Moore
Source: Getty Images

ALTON decries hike in diesel price

The Association of Licensed Telecoms Operators of Nigeria (ALTON) said the cost of diesel to run network towers, base stations and offices increased from N225 per litre to N750 per litre as of March 2022.

Read also

APC, PDP Primaries: Naira slumps heavily against dollar as aspirants mop up hard currency

PAY ATTENTION: Install our latest app for Android, read best news on Nigeria’s #1 news app

In their letter to the NCC, the operators cried that the cost of running operations in Nigeria has impacted heavily on them financially as Nigeria entered recession in 2020 and the impact of the Russian invasion of Ukraine.

According to them, the heavy cost has resulted in an increase in energy costs which constitutes an appreciable 35 per cent of ALTON’s members’ operating expenses.

Industry sources said that mobile telecommunication operators use an average of 40 million litres of diesel monthly to run telecom sites.

By the current diesel cost, the price of powering telecoms services will be about N30bn monthly and N360bn annually.

Reason for proposed tariff increase

The Punch reported that the NCC in its 2020 subscriber/Network Data report, said there were a total of 33.832 towers which belong to mobile and fixed operators as well as collection and infrastructure companies as of last year.

Read also

Airtel hits jackpot, rakes in N304 billion in revenue from data services

The NCC said there was a total of 36,998 base stations at the end of the year.

ALTON said energy costs amount to 35 per cent of telecom operators’ running expenses.

They mentioned that the crisis in Ukraine has contributed largely to the increase which was affecting them negatively in the telecoms industry.

The telecom operators cited this and other reasons for the reason for the current proposed 40 per cent tariff hike for calls, SMS and data.

Because of the development, ALTON for telcos is inching to increase the base price of calls from N6.4 to N8.98 and the price cap of SMS from N4 to N5.61.

The ALTON President, Gbenga Adebayo stated that the industry was one of the largest consumers of diesel in the country. The operators base their network planning, operational expense and projection plans on diesel prices.

Cost of data, calls to increase as telecommunication companies write NCC for tariff change

Read also

Exercise Books, Textbooks, other Print materials to Become more Costly as Cost of Paper Imports hit N1.23trn has reported that Nigerians are set to pay more for calls and data as telecommunication companies are proposing a new tariff increase by 40 per cent.

They made this known in a letter they sent to the Nigerian Communications Commission titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector.

The letter was written by the telecommunications companies under the aegis of the Association of Licensed Telecommunication Operators of Nigeria to the NCC.


Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner.

Online view pixel