Telcos admit revenue shortfalls amid load shedding allegations

Nigerian telecom companies have acknowledged experiencing revenue shortfalls amid allegations of implementing load shedding to control rising operational costs.

The operators, who denied implementing load shedding, acknowledged that current revenue levels were insufficient to sustain network operations.

 Industry sources revealed that telecoms are struggling to maintain network quality due to financial constraints.

This practice, often referred to as load shedding, involves extending the coverage area of each base station to compensate for the reduced number of active masts, effectively decreasing operational costs.

According to the President of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, load shedding might not accurately reflect the current situation.

He emphasised that the real challenge was not operational losses but the sustainability of network services.

The ATCON president warned that operators faced a mismatch between revenue and operational costs, citing that the real challenge was not just about operational losses but also the sustainability of network services.

“For instance, if a telecom company could afford to buy 3,000 litres of fuel last month but can only purchase 1,000 litres this month due to lower revenue, it may lead to reduced service levels. This is not a formal policy decision but a response to financial constraints,” he explained.

The Association of Licensed Telecom Operators of Nigeria and ATCON had previously argued in April that current tariffs were insufficient due to rising diesel prices, inflation, and currency devaluation.

The telecom sector faces sustainability risks, potentially impacting service quality and availability for consumers.

The regulator emphasised that any tariff adjustments must be justified and not adversely affect consumers.

Telecom companies' past profits have likely been used up, and any call for tariff increases reflects the need to address financial pressures rather than capitalise on past profits. The government is urged to take swift action if it plans to assist telecom companies or increase tariffs.

Any potential tariff hike is crucial for ensuring network sustainability, as telecom companies' inability to cover costs or recoup investments will compromise their ability to provide services.