Nigeria’s multiple and aggressive implementation of taxation of telecommunications companies is the cause of the poor quality of the network. This was revealed in a report published by SB Morgen titled “Inside Nigeria’s Subnational Fiscal Crisis”.
The report indicates that the telecommunications industry appears to suffer disproportionately from this overtaxation in Nigeria. The report also revealed that there are over 40 different taxes and levies imposed on Mobile Network Operators (MNOs) providing telecommunications services in Nigeria.
However, the aggressive taxation of this sector has led to the degradation of the quality of the network with consequences for Nigerians.
What the report says
The report indicates that the poor quality of the network is an obvious result of the numerous taxes of the telecommunications companies. It said, “A clear impact of multiple charging of telecommunications companies is the degradation of network quality. This mainly occurs when state authorities, in an effort to enforce the payment of taxes, lock down the facilities of telecommunications operators and deny them access to their sites for refueling, maintenance or troubleshooting. .
The report says the enforced lockdown of telecom operators by the regulator would lead to catastrophic network disruptions, affecting large numbers of Nigerians.
The report said:Lockdowns are quite often targeted at large sites, effectively crippling much of the network, causing a complete network outage for affected communities over an area that could span up to two or more contiguous states.
According to the report, the effects of these network outages are not limited to the affected telecommunications network, but can spread to others as affected customers are transferred to other network providers when they cannot take advantage of the service from their current network providers.
The report said:telecom operators in kogi state have warned that the shutdown of their sites by the kogi state government in a bid to force operators to pay more taxes and levies could lead to a communication breakdown in no fewer than 11 states.
The report adds that “State governments often lock telecom operators out of their facilities in an effort to collect various taxes. This often leads to network quality degradation”
What you should know
- The Nigerian National Broadband Plan 2020-2025 estimates 4G coverage to be 37% and aims to achieve coverage of at least 90% of the population and a penetration rate of 70% by the end of the year. plan life and provide data download speeds. approximately 25Mbps in urban areas and 10Mbps in rural areas.
- It also predicts that for every 10% increase in broadband penetration, the country’s gross domestic product (GDP) increases by 2.6-3.8%, making it an economically significant initiative.
- According to Nigeria’s GDP data, the telecommunications sector had a nominal GDP of N14.1 trillion in December 2021, compared to N5.3 trillion for the entire financial services sector. 10 years ago (2021), the telecommunications sector had a nominal GDP of 5 naira. 0.3 trillion while banks had a nominal GDP size of 1.49 trillion naira.
- Telecom operators have a customer base and demand that will drive increased revenues and profitability in the years to come, with over 199 million active mobile users. Telecom operators also have the capacity and the capital to diversify into other sectors of the economy, starting with the banking sector. MTN’s latest MOMO license provides the company with a new revenue stream.
- Nairametrics reported that Nigerian telecommunications giant, MTN Nigeria, is now worth N5 trillion, making it more valuable than all the banks, insurance companies and financial services companies listed on the Nigerian Stock Exchange combined.