Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, has said he expects that the proposed tariff hike by telecoms companies would be between 40 and 50 percent.
On Wednesday, Minister of Communications, Innovation and Digital Economy, Bosun Tijani, confirmed plans to increase telecoms tariffs. He however assured it would not be a 100 percent increase as the telecoms firms have proposed.
Re-echoing the minister’s comment, Rewane said he feels it is not a “bad deal” for both telecoms companies and consumers.
“Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50% which is fair after so many years of static changes,” Rewane said during an appearance on Channels Television’s Business Morning on Thursday.
The economy expert, who previously backed plans for a tariff hike, said the move would make the sector more sustainable.
“Yesterday, the price of MTN shares went up by 10% to 220. The investors have already factored that in and are expecting a lot of good goodies,” Rewane said.
“But more important to think about is the fact that because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the goal. So, we heard from the policymaker Bosun Tijani who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service.”
