NCC Bows to Pressure, Suspends Data Tariff Increase

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  • NCC Bows to Pressure, Suspends Data Tariff Increase

The Nigerian Communications Commission has suspended its directive to telecommunications operators to increase tariffs on data services available on their networks.

The suspension followed the uproar that the announcement of imposition of a price floor on the network operators has generated. The price floor, which would have taken effect today (Thursday) is about 200 per cent higher than what mobile telecommunications operators currently charge for data.

In a statement issued by the Director of Public Affairs, NCC, Mr. Tony Ojobo, in Abuja on Wednesday, the commission said the decision to suspend the directive was taken after due consultation with industry stakeholders and in view of the general complaints by consumers across the country.

Ojobo stated, “The commission has weighed all of this and consequently asked all operators to maintain the status quo until the conclusion of a study to determine retail prices for broadband and data services in Nigeria.

“Recall that the commission wrote to the mobile network operators on November 1, 2016 on the determination of an interim price floor for data services after the stakeholders’ consultative meeting of October 19, 2016.

“The decision to have a price floor was primarily to promote a level playing field for all operators in the industry, encourage small operators and new entrants.”

He added, “The price floor in 2014 was N3.11k/MB, but was removed in 2015. The price floor that was supposed to flag off on December 1, 2016 was N0.90k/MB.

“In taking that decision, the smaller operators were exempted from the new price regime by virtue of their small market share. The decision on the price floor was taken in order to protect the consumers, who are at the receiving end, and save the smaller operators from predatory services that are likely to suffocate them and push them into extinction.”

Ojobo noted that the price floor was not an increase in price, but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.

Consumers, however, believe that it is a new consumption tax imposed by the regulator since they have opposed a plan by the government to impose a nine per cent tax on telephone calls made in the country.

Ojobo further explained, “Before the now suspended price floor of N0.90k/MB, the industry average for the dominant operators, including MTN Nigeria Communications Limited, EMTS Limited (Etisalat) and Airtel Nigeria Limited, was N0.53k/MB.

“Etisalat offered N0.94k/MB; Airtel, N0.52k/MB; MTN, N0.45k/MB; and Globacom N0.21k/MB.

“The smaller operators/new entrants charge the following: Smile Communications, N0.84k/MB; Spectranet, N0.58k/MB; and NATCOMS (ntel), N0.72k/MB.”

He added that the NCC, as a responsive agency of the government, took into consideration the feelings of the consumers and so decided to suspend the new price floor.

Despite the announcement of the suspension, the National Association of Telecommunications Subscribers warned the Federal Government that it would resist any attempt in the future to increase data tariff rates in the country.

The NATCOMS stated this on Wednesday, some hours after the NCC said it had suspended action on the new price floor of data tariff.

The association said that the directive to implement the new price floor, in the first place, was “insensitive, callous and diabolical, so we will resist it should the Federal Government turn around in the future and decide to increase data tariff rates.”

The NATCOMS President, Adeolu Ogunbanjo, said, “Since the NCC is an agency of the Federal Government, the purported directive was designed by the government to cast more financial burden on the already depressed citizenry.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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