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The Nigerian Communications Commission on Wednesday announced the
immediate suspension of the new minimum pricing template for data
services by mobile operators in the country.
The director, Public Affairs at the NCC, Tony Ojobo, said the
decision to rescind its earlier directive to telecom operators to
commence charging the new floor price rate for data from December 1, was
to allow for further consultation with industry interest groups.
“Following concerns that visited the directive to introduce price
floor for data segment of the telecommunications sector beginning from
December 1, 2016, the Nigerian Communications Commission (NCC) has
suspended any further action in that direction,” Mr. Ojobo said in a
statement.
“The decision to suspend this directive was taken after due
consultation with industry stakeholders and the general complaints by
consumers across the country.”
Mr. Ojobo said the Commission has already asked all operators to
maintain the status quo until the conclusion of study to determine
retail prices for broadband and data services in the country.
Prior to the suspension, Nigerians had raised concerns about the
impropriety of the decision by government to hike price of data at this
time.
Several Nigerians accused the NCC of insensitivity, considering the
high cost of living in the face of the current economic recession in the
country.
Social media users expressed fears the government planned to limit citizens’ access to the Internet.
In its reaction, the Senate passed a vote asking the Commission to immediately halt the proposed Internet data tariff hike.
The upper chamber of the National Assembly, in a motion under matter
of urgent importance by Bala N’ Allah, the Senate Deputy Leader,
condemned the planned data tariff hike, and asked the NCC to halt the
increase immediately.
On November 1, the Commission, after a consultative meeting on
October 19 with all mobile network operators in the country, wrote to
them on the need to determine an interim price floor for data services.
In the memo, the telecom sector regulator justified its decision to
have a price floor, claiming it was primarily to promote a level playing
field for all operators in the industry, encourage small operators and
new entrants.
The price floor of N3.11 kobo per megabyte of data in 2014, it
recalled, was removed in 2015, pointing out that the price floor that
was supposed to flag off on December 1, 2016 was put at 90 kobo per
megabyte.
Although the Commission said smaller operators, by virtue of their
small market share, were exempted from the now suspended price regime,
it said the decision on the floor price was to protect the consumers who
are at the receiving end.
The commission said the decision was equally to save the smaller
operators from predatory services likely to suffocate them and push them
out of business into extinction.
“The price floor is not an increase in price, but a regulatory
safeguard put in place by the telecommunications regulator to check
anti-competitive practices by dominant operators,” Mr. Ojobo clarified.
He denied the regulator had fixed prices for data services, pointing
out that “the NCC does not fix prices, but provides regulatory
guidelines to protect the consumers, deepen investments and safeguard
the industry from imminent collapse.”
Prior to the now suspended price floor of N0.90k/MB, the industry
average for dominant operators, including MTN Nigeria Communications
Limited, EMTS Limited (Etisalat) and Airtel Nigeria Limited was N0.53k
per megabyte.
Etisalat offered (N0.94k per megabyte), Airtel (N0.52k per megabyte),
MTN (N0.45k per megabyte) and Globacom (N0.21k per megabyte).
A comparison of the data prices by the major operators with that
initially proposed by NCC shows that but for the reversal, majority of
Nigerians would have had to pay between 90 and 300 per cent increase in
data prices.
The smaller operators/new entrants, including Smile Communications, Spectranet and NATCOMS (NTEL) were allowed to charge N0.84k, N0.58k and N0.72k per megabyte respectively.
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