Consumers Also Have Say in Proposed Tariff Hike, Says NCC
The Nigerian Communications Commission has hinted that an increase in the price of telecommunication services such as calls, data, and text message is unlikely, at least in the short term, despite the push by telecom operators to increase the cost of these services.
It also said such proposal would have to go through various stages including stakeholders consultations, cost studies, among others.
According to the Executive Vice Chairman and Chief Executive Officer, NCC, Prof. Umar Danbatta, the commission is aware of how high diesel prices and lack of access to foreign exchange are negatively impacting telecom service providers.
He stated that the NCC recently received a letter from the Association of Licensed Telecoms Operators of Nigeria describing the unfavourable working environment operators were faced with and the need to review the prices of services by 40 per cent.
Recently, ALTON sent a letter to NCC proposing a 40 per cent hike in the cost of calls, SMS, and data because of the rising cost of running a business in the nation.
According to them, it is time for the price floor of calls to increase from N6.4 to N8.95 and the price cap of SMS to increase from N4 to N5.61.
In a letter titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ ALTON said, “In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the commission’s intervention in order to minimise the impact of the challenging economic issues faced by our members.”
Speaking to journalists on the sidelines of the ‘Stakeholder’s Consultative Forum on Emerging Technologies,’ on Thursday, Danbatta said, “ALTON rightly pointed out the high cost of doing business and in fact gave a figure of 40 per cent but the chairman denied that they indicated any figure.
“To me, when you say a 40 per cent hike in telecommunication services, you need to indicate which segment of the sector. Is it voice, Internet, data? There are so many segments, broadband services. So, it is very difficult to just give a figure as the amount by which you need to see a hike for services across all segments in the telecoms industry.
“It is impossible to do it that way as that would be doing it in a way that doesn’t align with our ACT. We normally increase prices scientifically; we engage the services of consultants in the area of cost-based studies to study each and every segment of the sector to come up with a recommendation as to whether there is a need for an increase in the cost of services from that particular segment or not.
“And even before we come up with a determination of new prices, we carry out a stakeholder consultation. That is the rulemaking process in the NCC. Before you impose a new tariff on citizens, you subject the matter to a stakeholder consultation. They must have a say. Consumers deserve to be heard.
“It is through this process that all along we have been doing determinations. Now when you look at the voice sector, there is a cap and a ceiling within which people who provide voice service can charge for the services they are providing. And if they increase a little above what they are charging now, provided it is within, the NCC would say make sure you do this with recourse to approval. No operator should do this unilaterally.
“However, if the cap is exhausted due to the high cost of doing business, we would like to be allowed to do a cost-based study and come up with factual information that will stand the scrutiny of consumers that are been charged for the services.”
Danbatta explained that the commission was concerned about how the high cost of diesel and lack of access to forex was impacting the industry. He said the NCC has discussed the matter before the minister of communications and digital economy, Isa Pantami.
According to him, the minister is going to engage with the Central Bank of Nigeria, governor, Godwin Emefiele, on how to make forex easily accessible to telecom operators.
He added, “On the issue of the cost of diesel, everyone is paying for it. No sector is spared, for instance, the aviation sector also pays for the high cost of diesel.
“I believe the government is studying the situation very closely and will come up with a holistic remedial measure that is not restricted only to the telecoms sector because people in the aviation sector provide services to students even though we can say not every citizen provides aviation services, it is probably elitistic.
“But everyone uses communication services. Farmers make calls and send text messages, so one has to be very careful before tinkering with the cost of telecommunication services as against allowing aviation operators to increase the cost of increasing aviation services.”
Danbatta further said it was time for operators to begin to consider alternate sources of energy so as not to stall the growth of the sector and to ensure it continues to provide services to everyone at low cost.