Nigeria’s   telecommunications industry is facing an imminent crisis, with the Private Telecommunications and Communications Senior Staff Association of Nigeria sounding a stark warning that the sector is on the verge of collapse.

In a letter addressed to President Bola Tinubu, the union urgently appealed for immediate government intervention to avert a looming disaster.

The letter, dated December 3, 2024, and signed by the union’s president, Comrade Opeyemi Tomori, and general secretary, Comrade Okonu Abdullahi, was obtained by The PUNCH on Wednesday.

It painted a dire picture of the sector’s financial struggles, driven by soaring operational costs and the broader economic challenges currently gripping the country.

The union pointed to a sharp increase in the cost of petroleum products—automated gas oil, which is used to power telecom base stations, has risen from N842.25 per litre to an average of N1,300, while petrol motor spirit, needed to fuel engineers’ vehicles, has surged from N198 to as high as N1,030.

It added that electricity tariffs have also seen significant hikes, exacerbating the cost burdens on telecom companies.

“Rising costs have severely impacted the telecom sector, with companies struggling to break even,” the union’s letter stated. “As a result, some telecom operators are finding it difficult to meet their financial commitments, including salaries to workers.”

The union said that companies, unable to balance the growing costs against dwindling revenues, are already considering the possibility of network service shedding.

This would mean that telecom services might be unavailable in certain areas at different times, disrupting the broader economy and daily activities across the nation.

“If this situation is not addressed, the sector’s collapse is imminent, and it will have a domino effect on other industries that depend on telecom services,” it warned.

The union expressed concern for its members, who are already facing financial strain as companies have not proposed salary adjustments to match the rising costs. Some workers fear that continued difficulties in the sector could lead to job losses.

“Our members are already struggling as their companies have not discussed any salary increases to cope with the economic pressures,” the letter stated.

Nigeria’s telecommunications sector has continued to experience dramatic decline in foreign investments.

According to the National Bureau of Statistics, foreign investments in the sector plummeted to $14.4m in the third quarter of 2024, marking an 87 per cent drop from the $113.42m recorded in the previous quarter. This reflects a loss of $99.02m in just a few months.

The union called for an urgent intervention from President Tinubu, requesting the government to allow telecom operators to charge higher tariffs to cover their increased operational costs, similar to interventions made in the oil and gas and power sectors.

“Allowing telecoms to adjust their tariffs will ensure that they can continue operations, pay workers, and meet tax obligations,” the union wrote.

The telcos earlier this year emphasised that their general service pricing framework has remained unchanged for the past 11 years, primarily due to regulatory constraints.

Telecom providers are now advocating for cost-reflective tariffs, warning that the ongoing economic pressures are jeopardising their financial stability.

They argue that without an adjustment in tariffs, their ability to remain viable is increasingly threatened, and the sector’s collapse could have devastating effects on the broader economy.

Further, the letter also referenced comments from the CEO of MTN Nigeria, who recently likened the state of the sector to a patient on life support.

“The telecom sector cannot continue on this path without significant government support,” the union stressed, highlighting the broader implications for Nigeria’s economic recovery.

Despite the grim situation, the union remains hopeful that with the President’s leadership, a solution can be found to safeguard the telecom sector, protect jobs, and prevent further disruptions in services.