Rising Inflation and Forex Crises Lead to Telecom Staff Reductions

The Nigerian Communications Commission's latest data reveals that the telecommunications sector cut 383 jobs within a single year, attri...

The Nigerian Communications Commission's latest data reveals that the telecommunications sector cut 383 jobs within a single year, attributed to a significant rise in operational expenses.

Data from the NCC's 2023 and 2024 Year-End Performance Reports showed that the overall number of employees among licensed operators decreased from 17,882 in 2023 to 17,499 in 2024. This reduction coincided with a rise in operating costs for the operators, which went up from N3.16tn in 2023 to N5.85tn in 2024, representing an 85.35 per cent year-on-year growth.

The NCC linked the increase in expenses to increased energy costs, inflation, foreign exchange issues, and various fees set by state and local governments. Even though the commission managed to get no Right-of-Way charges in certain states, many companies still mentioned significant costs related to network setup and upkeep.

N5,854,257,451,225.71 represents the overall operational expenses recorded in 2024, marking an 85 percent increase compared to the N3,158,403,767,328.48 from the previous year.

"Many licensees expressed concerns about high Right-of-Way charges, strict microeconomic operational employment conditions, and increasing inflation. Nevertheless, the NCC managed to achieve no ROW fees in certain states during 2024," stated its most recent 2024 Year-End Performance Report.

The PUNCHAdditionally, it was noted that GSM operators experienced the largest decrease in workforce, reducing their employee count from 7,212 to 6,658 during this time. Internet Service Providers cut their staff from 5,589 to 5,473, while the number of workers in the Value-Added Services sector dropped from 813 to 713.

Fixed-line operators saw a small rise, going from 268 to 272 employees. Nevertheless, employee counts increased in two areas. Providers of collocation and infrastructure sharing expanded from 1,574 workers in 2023 to 1,751 in 2024, while the "Others" group increased from 2,426 to 2,632. These gains were not enough to offset the declines observed in the GSM, ISP, and VAS sectors.

The workforce realignment came after a significant decrease in active voice subscriptions following the implementation of the NIN-SIM linkage policy. Active subscriptions dropped from 224.7 million in 2023 to 164.9 million in 2024, representing a 26.61 percent reduction, while teledensity declined from 103.66 percent in 2023 to 76.08 percent in 2024.

The report stated, "As of December 2024, the total number of active voice subscriptions across all market segments stood at 164,926,599, compared to 224,713,710 recorded by December 2023. This shows a decrease of 26.61 percent in 2024."

The decrease was due to the removal of Subscriber Identification Modules that are not associated with confirmed National Identification Numbers, and the correction of a major issue by a Mobile Network Operator, which accounts for the substantial reduction in Nigeria's telecommunications subscriber numbers.

Teledensity also experienced a similar drop of 26.61 per cent. It stood at 76.08 per cent in 2024, compared to 103.66 per cent in 2023, as reflected in the Voice segment mentioned earlier.

Starting from September 2023, the calculation of teledensity will use the projected population number of 216 million provided by the Nigerian Population Commission.

Although there was a decline in the number of subscribers, the industry saw an increase in capital expenditure. CAPEX increased from N990.55bn in 2023 to N2.90tn in 2024, fueled by the elevated cost of imported machinery and continuous network development.

The number of towers was raised by operators from 39,356 to 39,880, and base stations from 137,992 to 145,141. Expansion of fibre infrastructure also took place. The sector's income grew from N5.30tn in 2023 to N7.67tn in 2024, representing a 44.70 per cent rise.

Nevertheless, the operators mentioned in their submissions that increasing expenses still impacted their activities and future planning. The telecommunications sector accounted for 14.40 percent of Nigeria's GDP in Q4 2024, up from 14 percent in Q4 2023.

In early 2023, The PUNCH stated that telecom companies started reducing operational expenses and could potentially cut jobs in the next few months if the naira's decline is not resolved.

A representative from the Association of Licensed Telecommunications Operators of Nigeria, who is well-informed about industry changes, stated that smaller telecom companies would face the greatest impact. The source, who shared this information with our reporter under confidentiality, was unable to speak publicly on the issue. It was mentioned that some smaller operators have started laying off employees to cope with deteriorating economic conditions.

Last year, The PUNCH highlighted that Nigeria's telecommunications industry faced a potential collapse when approximately 800 members of the Private Telecommunications and Communications Senior Staff Association went on strike, endangering nationwide service operations.

The union, primarily composed of contract workers, cautioned about significant disruptions to telecommunications services if their requirements were not fulfilled, which could result in millions of customers experiencing a possible communication outage.

"The strike is now unavoidable due to the current unstable working conditions that our members are facing in the industry, the employers' refusal to acknowledge and uphold the constitutional right of these workers to freely join the union, and the unfair dismissal of three union members," it mentioned in its seven-day strike warning.

Provided by SyndiGate Media Inc. (Syndigate.info).