THE Nigerian Communication Commission (NCC) recently suspended its approval of an increase in tariffs for data services, for telecommunications operators in the country. The approval ought not to have been given in the first place. By all measures, the plan to hike tariff for data services available on the networks was insensitive, callous and unacceptable.
It is, therefore, a welcome relief that the telecom regulator responded to public outcry and the directive of the Senate to immediately halt the planned tariff hike. Before the suspension of the increase, NCC had reportedly approved a 200 per cent hike in data subscription tariff, effective December 1, 2016. A data plan of N1000 for 1.5 gigabytes would have cost N3000.
The network providers were reported to have written to the NCC complaining that the current economic recession had adversely affected their operations and, therefore, requested for a significant increase in tariffs on data services available on their networks. They claimed they were providing services below cost price. The regulator approved the request November 1.
It was most unkind to consumers for the NCC to initially accede to the request of the operators without weighing the far-reaching implications of such an action at this time that the harsh economic situation is already impoverishing most Nigerians. The action of the NCC would have amounted to “robbing Peter to pay Paul” had the increase not been halted.
Giving reasons for the suspension of the hike, the NCC, in a statement by its Director of Public Affairs, Mr. Tony Ojobo, last Wednesday said it took the decision after due consultation with industry stakeholders, and in view of the general complaints by consumers across the country.
The commission explained that it weighed all the complaints and consequently asked all the network providers to “maintain the status quo until the conclusion of a study to determine retail prices for broadband and data services in Nigeria”. The argument put forward by the NCC for approving the hike in the first place is not convincing. The agency has explained that its “decision to have a price floor was primarily to promote a level playing field for all operators in the industry, and encourage small operators and new entrants.” It said the decision was taken in order to protect consumers who are at the receiving end. It also averred that the “smaller operators were exempted from the new price regime by virtue of their small market share.”
We are not at all persuaded by these explanations. On the contrary, we believe the decision could only have been taken to improve the profitability of the telecom providers at the detriment of subscribers who are at the receiving end of their poor services. The hike, had it succeeded, would have amounted to an imposition of consumption tax by the regulator through the back-door in cahoots with the GSM providers.
It is regrettable that a government agency that is funded by Nigerians to protect their interest could approve such a high increase in tariffs for data services at this time that Nigerians are groaning under generally high inflationary trend, including steep increases in the cost of basic food items, electricity, petroleum products and bank services.
It is disheartening that at this time when many countries have made telecom data one of the cheapest ways to empower their citizens, particularly the youths, Nigeria is thinking of making data services unaffordable.
Nigeria remains one of the most profitable countries for GSM network providers in the world. The sector has grown exponentially in the last sixteen years, and has significantly contributed to the nation’s Gross Domestic Product (GDP).
However, the sharp drop in the sector’s contribution to the GDP in the third quarter (Q3) of 2016, from N1.59 trillion in Q2, to N1.39 trillion in Q3, (a decrease of 1.8 percent, according to the National Bureau of Statistics), should not be redressed at the expense of consumers.
The painful truth is that many service providers in the country have in recent times reviewed their fees upwards in utter disregard of the dwindling purchasing power of their customers, sometimes without the relevant regulatory agencies protecting the interest of the public.
All things considered, we strongly oppose any attempt to increase tariffs for data services available on any network in the country. As many Nigerians, including the Senate and the National Association of Telecommunications Subscribers (NATCOMS) have said, any further measure or policy that will increase the financial burden of the already depressed citizenry should not stand.