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Posted On

07
May
2022

Data, SMS cost hike not possible without approval, NCC assures Nigerians

The Nigerian Communications Commission (NCC) has said telecoms operators under the Association of Licensed Telecommunications Operators of Nigeria (ALTON) cannot increase calls, data, and SMS tariffs by 40 per cent without direct approval from the telecoms regulator.

The Commission said there would not be any cost review in the telecom sector until empirical studies are conducted to ascertain if increments are necessary.

In a statement sent to Technext, and signed by its Director of Public Affairs, Dr Ikechukwu Adinde, the NCC says the current tariff regime being administered by the service providers is a product of its “determination in the past.”

Adinde says, “Consistent with international best practice and established regulatory procedures, the NCC ensures its regulatory activities are guided by regular cost-based and empirical studies to determine the appropriate cost (upper and floor price) within which service providers are allowed to charge their subscribers for services delivered.

“The Commission ensures that any cost determined, as an outcome of such transparent studies is fair enough to enhance healthy competition among operators, provide wider choices for the subscribers as well as ensure the sustainability of the Nigerian telecoms industry. 

“For the avoidance of any doubt, and contrary to MNOs’ agitation to increase tariffs for voice and Short Messaging Services (SMS) by a certain percentage, the Commission wishes to categorically inform telecoms subscribers and allay the fears of Nigerians that no tariff increase will be effected by the operators without due regulatory approval by the Commission.”

According to ALTON’s request, call prices will rise from ₦6.4 to ₦8.95, while the SMS price cap will rise from ₦4 to ₦5.61. 

The telecoms operators argue that the business has been harmed financially due to the country’s economic downturn in 2020 and the ongoing Ukraine/Russia issue, consequently increasing energy costs, increasing their operating expenses by 35 per cent. They also mentioned that the cost of doing business had risen by 40% in the past years.

They went on to say that the recent imposition of a 5 per cent excise charge on telecom services had added to the industry’s burden of many taxes and levies.

“Upward review of the price determination for voice and data and SMS. Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments,” ALTON said in a letter to the NCC.

But, the NCC cites Sections 4, 90 and 92 of the Nigerian Communications Act (NCA) 2003 which delegates powers to the Commission to determine prices so as to ensure they protect “subscribers against unfair practices including but not limited to; matters relating to tariffs and charges.”

“The current tariff regime being administered by the service providers is a product of NCC’s determination both for voice and SMS in the past,” Adinde says to telecoms operators.

However, the NCC agrees that while there may be justifiable reasons for the request of Mobile Network Operators (MNOs) to effect a 40 per cent increase “it should be noted that they are not allowed to do such either individually or collectively without recourse to NCC, following the outcome of a cost study. This is not the case for now.”

Adinde adds, “Through NCC’s commitment to engendering healthy competition among the licensees, the cost of services has been democratised and become more and more affordable for Nigerian subscribers. The regulator is even more committed to this cause to ensure subscribers get greater value for money spent on telecom services.”

In reaction to the request by the telecoms operators, both the President, National Association of Telecoms Subscribers (NATCOMS), Deolu Ogunbanjo, and the President, Association of Telephone, Cable and Internet Subscribers of Nigeria (ACTIS), Sina Bilesanmi asks ALTON not to increase the tariff at this time.

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