Telecommunications operators in Nigeria are pushing for a shift from the existing uniform national tariff structure to a regional tariff regime, which would allow them to adjust pricing based on operational challenges in different states.

The proposal, discussed at the 7th edition of the Policy Implementation Assisted Forum (PIAFo) in Lagos, comes amid mounting concerns over high operational costs, multiple taxation, and security threats to telecom infrastructure.

Industry stakeholders note that a regional tariff model would ensure fairer pricing, rewarding states that create a business-friendly environment while making those that impose high costs on telecom operations pay more for services. This move, they believe, will compel some state governments to revise policies that have made telecom operations difficult, particularly in areas such as multiple taxation, Right of Way (RoW) charges, and bureaucratic bottlenecks.

Right of Way Charges: A Major Concern for Telcos

One of the key operational challenges faced by telecom operators is the cost of Right of Way (RoW) charges, which refers to the fee levied by state governments for laying telecom infrastructure such as fiber optic cables. Ideally, these charges are meant to facilitate infrastructure development, but in many states, they have been inflated, becoming a revenue-generating tool rather than a means to support connectivity.

While some states, such as Kaduna, Ekiti, and Katsina, have reduced or eliminated RoW charges to encourage broadband penetration, others continue to impose exorbitant fees. These high costs, coupled with multiple layers of taxation, have significantly increased the cost of expanding telecom networks, especially in underserved rural areas.

The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo pointed out that some states make it extremely difficult for telecom companies to operate due to excessive taxation and infrastructure challenges. He stated that these issues should be reflected in the pricing of telecom services.

“We may have to reconsider our national tariffs and look at regional tariffs. If you are aware that the cost of doing business is high in a particular state and it’s impossible to negotiate with them, factor the cost of deployment in those areas into the cost of providing services,” Adebayo said.

Multiple Taxation and Security Threats Driving Cost of Operations

Another pressing issue for telcos is the rising cost of maintaining infrastructure due to multiple taxation and security challenges. In several states, telecom operators face levies from various government agencies, leading to an increase in the cost of operations. In some cases, local governments, state agencies, and even non-state actors impose fees on telecom infrastructure, making it expensive to deploy and maintain services.

Beyond taxation, telecom infrastructure is frequently targeted by vandals and criminals, further increasing the cost of service delivery. Operators often have to spend millions of naira to repair damaged sites and secure installations, with no financial compensation from the states where these incidents occur.

At the forum, discussions also focused on the need to safeguard telecom infrastructure. The convener of PIAFo, Mr. Omobayo Azeez, emphasized that the recent passage of the Critical National Information Infrastructure (CNII) Order by President Bola Tinubu was a milestone in strengthening Nigeria’s digital economy.

However, telecom operators insist that without a pricing model that reflects their operational costs, they will continue to struggle with financial losses and service disruptions.

The President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Tony Emoekpere, supported the idea of a regional tariff structure, stating that it is unfair for telecom companies to operate under a uniform national tariff when costs vary significantly across states.

“If it costs me extra to haul diesel from one part of the country to another, I should be able to add that cost to the service or you compensate me for that by making your environment attractive for me to operate,” Emoekpere explained.

A Necessary Push for States to Adjust Telecom Policies

While discussions on the feasibility of the proposal continue, many stakeholders believe that a regional tariff system is the right call, as it would put pressure on states that have refused to create a business-friendly environment.

Currently, telecom operators are at the mercy of state policies that often disregard the importance of affordable and accessible telecom services. By introducing a pricing structure that reflects the realities of each state, governments that have been reluctant to lower telecom taxes and RoW charges may be forced to revise their policies to attract better service at lower costs for their residents.

In states where RoW charges remain high, a regional tariff system would mean higher service costs for consumers. This, in turn, could push state governments to rethink their policies and align with the Federal Government’s broadband penetration agenda, which aims to expand connectivity across the country.

NCC’s Role in Approving a Regional Tariff Model

While telecom operators are eager to implement the regional tariff system, its approval lies with the Nigerian Communications Commission (NCC), which regulates pricing in the industry.

The NCC recently approved a 50% tariff increase for telecom operators after years of agitation over rising operational costs. However, the agency still requires telcos to operate under a national tariff regime, ensuring that subscribers pay the same rates regardless of location.

If the NCC approves a regional tariff structure, it would mark a major transformation in Nigeria’s telecom sector. While consumers in business-friendly states may enjoy stable or even reduced pricing, those in states with difficult operational environments could see a rise in telecom costs. However, there is concern that it will impact the affordability of telecom services since some regions fall into underserved areas with low disposable income.

The S&P 500 ended a four-week losing streak with a slight gain. This marked a shift after a period of consistent declines, with the index closing modestly higher for the week, snapping its longest string of weekly losses in recent months. The turnaround came amid a volatile market environment influenced by factors like Federal Reserve policy updates and ongoing tariff discussions, offering a bit of relief to investors. The Federal Reserve’s impact on the S&P 500—and markets broadly—stems from its role as the U.S. central bank, controlling monetary policy to influence economic conditions.

The Fed sets the federal funds rate, which affects borrowing costs across the economy. When the Fed raises rates, loans and credit get pricier, slowing business expansion and consumer spending. This often pressures stock prices, including the S&P 500, as companies face higher costs and lower profits. Conversely, cutting rates cheapens borrowing, boosting investment and spending, which tends to lift equities. In early 2025, the Fed’s signaling of potential rate adjustments—likely in response to inflation or growth concerns—could have swayed investor sentiment, contributing to the S&P 500’s rebound after its losing streak.

The Fed uses rate hikes or cuts to manage inflation. High inflation erodes purchasing power and can spook markets if it spirals, prompting tighter policy that weighs on stocks. By March 2025, if inflation showed signs of cooling (or overheating), the Fed’s latest statements or actions—like a March meeting or Powell’s comments—might have reassured investors, supporting that S&P 500 uptick. The Fed doesn’t just act; it signals. Investors obsess over every word from Fed Chair Jerome Powell or the FOMC (Federal Open Market Committee) minutes.

If the Fed hinted at pausing rate hikes or pivoting to cuts in early 2025, markets likely took it as a green light, fueling optimism and buying that snapped the S&P’s four-week slide. Through tools like open market operations (buying or selling bonds), the Fed controls money supply. More liquidity—say, from bond purchases—can juice markets by giving banks more cash to lend. In March 2025, any whiff of looser policy could’ve boosted confidence, propping up the S&P 500.

Around this time, the Fed’s moves were likely reacting to 2024’s economic data—think inflation hovering around 2-3%, unemployment shifts, or tariff-related uncertainty. That S&P 500 recovery suggests markets interpreted the Fed’s stance as supportive, or at least less hawkish than feared. It’s a dance of policy and perception, and the Fed leads. Tariffs can significantly influence the S&P 500 by altering the economic landscape for the companies within the index. Here’s how they likely played into the market dynamics around March 2025, when the S&P 500 broke its four-week losing streak.

Tariffs are taxes on imported goods, so they raise costs for S&P 500 firms relying on global supply chains—think tech (Apple, semiconductors), retail (Walmart), or manufacturing (Caterpillar). If new or threatened tariffs ramped up in early 2025, say from U.S.-China trade tensions or post-election policy shifts, these companies might’ve faced slimmer margins. This can drag stock prices down as investors anticipate lower profits, possibly contributing to the prior losing streak. A resolution or delay in tariff hikes by March could’ve eased that pressure, aiding the rebound.

Higher import costs from tariffs often get passed to consumers, stoking inflation. This worries investors because it might force the Federal Reserve to tighten policy (raise rates), which, as we discussed, tends to hit stocks. In Q1 2025, if tariff talks—like those tied to Trump-era rhetoric or new administration moves—escalated, the S&P 500’s earlier declines might’ve reflected that fear. A pause or softer stance by March 22 could’ve calmed markets, supporting the upturn.

Tariffs don’t hit evenly. Domestic producers (e.g., steelmakers like Nucor) might gain from less foreign competition, boosting their stocks, while importers or multinationals (e.g., Nike, Boeing) suffer. The S&P 500, being broad, reflects this tug-of-war. If tariff uncertainty peaked in February 2025, then eased—say, with trade talks or policy clarity—the index’s recovery might signal a rebalancing as losers stabilized.

Many S&P 500 companies earn big overseas. Retaliatory tariffs from trading partners (China, EU) can shrink those revenues, denting stock prices. In early 2025, escalating tariff threats could’ve spooked investors, driving the prior four-week slide. A de-escalation or even just steady news by March—like stalled tariff plans or diplomatic progress—might’ve restored confidence, lifting the index.

Tariffs are as much about perception as reality. Headlines about “trade wars” can trigger selloffs, even if the economic hit is TBD. The S&P 500’s losing streak likely fed on such uncertainty—perhaps tied to 2024 election fallout or policy rumors. By March 21, 2025, if tariff chatter quieted or shifted to negotiation rather than confrontation, that alone could’ve sparked the modest rally.

Tariffs’ impact in 2025 would hinge on specifics—like which goods, how high the rates, and who’s targeted (China? Mexico?). The S&P 500’s turnaround suggests that, at least temporarily, the market saw tariff risks as less immediate or severe, letting other factors (like Fed signals) take the wheel. It’s a volatile mix—tariffs can punish, but clarity, even grim, often beats uncertainty for stocks.