The founder and CEO of Paga, Tayo Oviosu, has said that telecommunications operators in Nigeria will have to crash the cost of data to accelerate financial inclusion in the country.
Oviosu, who stated this in Lagos while speaking to journalists on the state of financial inclusion in rural Nigeria on Wednesday, said the current high cost of data is preventing many Nigerians from participating in the financial system.
According to him, the cost of data in Nigeria is more expensive compared to a country like India. He said this affects how people use fintech services.
Fintechs in rural areas
Explaining why most fintech services are not accessible in rural areas, Oviosu said the cost of data is a major hindrance.
“For fintech services to get to the rural areas, there are a lot of things that have to happen. First of all, the biggest thing that actually has to happen is that the cost of data needs to crash.
Data is so expensive here. It’s not smartphones because a lot of people have smartphones. In India today, the cost of a gigabyte of data is less than seven US cents. So cheap. You will consume so much content. That’s why you have so many content creators in India that are making money. So, I think that’s a big thing,” he said.
Reminded that the telecom operators in Nigeria are currently demanding for price increment due to high inflation and other economic realities in the country, the Paga founder said the call is unjustifiable. According to him, the telcos in Nigeria have relied heavily on tariffs over the years while neglecting other areas they can make money from.
“I think if they’re forced to reduce price, their businesses will scale significantly because they will make money from other areas they are not looking at. If you go to the US, yes, you can go to a store and buy a smartphone, but almost everybody is buying their phones from mobile operators. So, there are other ways that the mobile operators can make money that they’re not tapping into,” he said.
Telcos want price increment
Meanwhile, the call for price reduction came at a time when the operators were asking the telecom regulator, Nigerian Communications Commission (NCC), to allow them to increase the price of data and voice services. According to the operators, the NCC has not allowed them to increase prices in the last 11 years despite the astronomic rise in their operation costs.
In a joint released on Thursday by the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON), the telecom companies said the telecom industry is the only sectir that has not reviewed its prices despite the rising inflation in the country.
They blamed this on the regulatory restraints that have been preventing them from pricing appropriately.
