The Nigeria Communications Commission (NCC) yesterday said it intervened with an interim price floor for data services to avert a looming price war in the telecommunications sector.
But the Communications Minister Adebayo Shittu has asked Nigerians to brace for a price rise.
The regulatory commission said it feared that the price war could eventually lead to a monopoly in the telecom industry that would force small operators to shut down.
It said that monopoly in the telecom sector could also push the country back to the days of NITEL – the troubled governenmt-owned telco – to the detriment of small operators.
NCC Executive Vice Chairman Prof. Umar Dambatta stated this when he appeared before the Senate Committee on Communications.
The committee was mandated to investigate the proposed data tariff hike said to have been ordered by the NCC.
Committee Vice Chairman Senator Solomon Adeola, who presided, noted that there was a public outcry over the proposed increase.
Sen. Adeola said Nigerians were united in their opposition to the proposed increase.
He said the position of Nigerians was that a tariff hike was ill- advised, especially with the biting economic situation.
Dambatta told the committee that the NCC’s intervention was not designed to undermine consumers.
He noted that if cheap prices were introduced, they may end up undermining the telecom service operators.
He said if the situation arose where the operators could no longer cope, the consequences could be better imagined.
Dambatta said the need to avert a crisis in the industry informed the decision to introduce interim price floor for data services at N0.90k per BM.
He said: “We wanted to protect the Nigerian consumer from unhealthy price war in what may lead to a monopoly that may lead us to the days of NITEL. We did not increase any price but merely provided a regulatory standard to protect small telecom operators.”
Dambatta said there were some telecom operators that lacked the capacity to compete with the big operators.
He said the N0.90k price floor for purchase of data was a benchmark below which no operator could sell.
“We said in the interim directive measure that no operator should sell below 90k per megabite. There was a price war in the market; that was why we issued the interim directive.
“A situation where a dominant operator provides services far below what is obtainable in the sector in order to attract more customers may lead to a situation where smaller operators will be forced to shut down,” he said.
Dambatta, who said there was a mix up of the interim directive, noted that instead of increase, the NCC wanted reduction in price of tariff to create a balance between big and small operators.
He said the NCC did not set any price ceiling but provided a price law.
Dambatta added, “ We stepped in when we noticed a price war in the sector. The price war was already reaching undesirable level that we had to step in to prevent a monopoly like the days of NITEL.”
The interim floor price, he said, has been suspended temporarily to allow for further consultations.
Dambatta said the NCC would conduct extensive research to come up with a price floor that would be acceptable to Nigerians.
The Minister said the reality was that telecom service providers are operating in an unfriendly business environment, including lack of electricity and increasing security challenges.
He said: “This is one area that I believe that we all must face the reality… If you look at the NCC law, it is positioned to reflect experiences, expertise and all of that and I want to believe that there must not be too many interventions in the activities of the NCC.
“I am a political office holder. I am not an expert, so I cannot venture to say whether they did wrong or right, except they say that the constitution has granted them the role of a supervisor of a direct regulatory authorities, particularly relating to the activities in the telecoms industry.
“The only area I feel they were deficient was in the area of communicating with the people of this country, particularly because of the sensitivity that has been imposed on Nigerians by the harsh economic situation.
“I know that if you want to make omelet you must break eggs. Unfortunately in this country, we fail to appreciate the transformation role that ICT has brought about in the lives of Nigerians.
“I keep saying this, and I have no apology in saying this, before 1999, GSM lines in Nigeria were less than 500,000. Today, we have well over N152 million lines. All the hustles that Nigerians were going through before the exponential development of ICT are no more with us.
“It is also important to say that operators in Nigeria are operating on a very harsh situation, which is not known in other advanced countries. For instance, over the years, the Nigerian state has not succeeded in fixing electricity over the last 20 years.
“This industry’s reliance on electricity and because Nigeria has failed in providing reliable electricity, it means they have to rely on extra budgetary provisions to provide electricity 24 hours, seven days of the week, which additional expenditure does not operate in other countries which we seek to copy. This is one challenge that we must look at.
“The other challenges in the area of security; a lot of infrastructure by operators are usually under coma by criminals all across the country. Indeed we know what the security situation is in the country. Apart from that we also have the problem of taxes which they have always be talking about. I have always challenged operators that I want to see all the taxes so that we find a way of harmonising them.
“What I am saying is this, if Nigeria has invited international investors to come and invest in Nigeria so that our lives will be better, so that the economy will be better, so that businesses can be more conveniently made, so that even government can run more conveniently, to whom much is given, much is expected.
“The Nigerian state must also be in a position to provide its own share to make an enabling environment operate properly.
“So, I am not supporting at this stage or not supporting the price increase with regards to the floor. But what I am saying is, these are technical issues whose decision must be taken having regard to all the factors that are important before a decision can be taken.
“I am appealing to the distinguished senate in intervening, they should try to encourage NCC to be the best that it can, they should try to assist us (NCC) in the area of holding the balance between the interest of operators and the interest of the Nigerian masses so that we can be seen to be providing the best.”
MTN CEO Mr. Ferdinand Moolman, who was also at the hearing, said that the industry had been operating without data floor since 2015.
He underscored MTN’s commitment to ICT development in the country.
The MTN boss also stressed the need for a long time overview of the industry.
He was emphatic that the industry needed to be health to continue to grow.
Moolman said: “MTN remains unrelentingly committed to the sustained provision of affordable and accessible voice and data services in accordance with the National ICT and Broadband plan. In line with this commitment and to continue the provision of high speed data services to its esteemed customers, MTN recently bid for, and acquired the 2.6GHz LTE spectrum at the cost of US$96million.MTN also launched 4G LTE services, enabling faster access to digital platforms and igniting socio-economic development with a multiplier effect on the economy.

http://thenationonlineng.net/minister-advises-nigerians-brace-telecom-data-price-increase

I am not understanding

Humn make I no talk

Is it our fault that the government has failed to provide favorable operating conditions for telecos? If the operators, despite the harsh operating conditions are willing to sell below 0.90k, why will NCC discourage them from doing so?

Are the consumers themselves not already overburdened with tax, lack of stable electricity, delayed/unpaid salaries? Who now protects us, if NCC protects the smaller operators by allowing a benchmark price of 0.90k, even when the likes of Airtel are willing to go as low as 0.46k?

Are the new/smaller operators they seek to protect not aware of these harsh economic realities before choosing to invest here? I think they should instead look for heavy investors to help them compete with the big guns in the industry.

I still don't see NCC's point. Let the market dictate the price!

I knew the suspension of pricing increment was just a temporary stall, that it would eventually be implemented anyway. Useless country.

We re already complaining of the already existing hardship and u wanna add urs to it..

God help us all..

All this upandan policies of this administration is making Nigeria's dizzy..

I no go fit perch for here









Na bad news, useless govt stupid buhari, thunder go fire u if u say u wan contest for president 2019, no amount of format wey u wn use go make ur zombies vote for u again

They have already increased it on data usage per kilobyte.

Hmmmmm, God de

This man keep referring to the days of NITEL. How many operators were in existence then?

I still don't get it. So NCC is more interested in the protection of the so called smaller operators than the over 170 million consumers nationwide?

This is absolutely disgusting.

This man has been compromised.
Market forces should be allowed to play out naturally and not be manipulated. A price war is very healthy for the consumers especially when there is no single dominant player (note that we have 4 dominant players and none of them have ever declared that they are operating at a loss).
If the barriers to entry are not to the small players favour, why did they enter the market? I believe these small companies he is referring to are owned by some top government officials.
The truth remains that these Telecom's companies would never have slashed data prices if it would have made them run at a loss.
If NCC are allowed to increase data price based on this frivolous excuse that cost of business is high in Nigeria very soon CBN will tell banks that run generator sets 24/7 to increase charges based on the same excuse.

The senators are already sounding compromised.

I weep for my country.

Hehee, I don't get it ooo, isn't this 1 too many ? A group of people elected have become our oppressors? Lies everyday? More lies ,more lies again? From basic foodstuffs to building materials to transport to electricity, to inflation, all down under, why did we do this to ourselves, why did we lie to ourselves? Lemme catch d idiiooot that will come & tell me about 2019, in fact I tink I have to get my PVC ready, to dump this whole bunch of incompetent, bunch of fraudsters, we are tired, and we r just looking without doing anything about it, I tinks its high time for advocacy.

After a failed attempt to push their price down our throat they are coming here to do damage control and spinning more tales.

If it was monopoly that brought prices of sim packs from N20000 to N200 please let the monopoly continue.

To an extent, I understand the Minister's explanation. The issue of electricity is the main challenge for Telecom Companies. Daily usage of Diesel generators are quite expensive, erodes on their profit, affect staff welfare to some extent, delays their infrastructure upgrade,etc.

But Honorable Minister knows the issue of Electricity is the Government's responsibility.

They should promote Nigeria.

Make Nigeria attractive to investors.

Stop incitement and lies which they've been doing. You don't, use mouth to, among others incite, aggravate, spread lies, then, use the mouth to try and promote a country; your audience know the truth.

Government should involve seasoned professionals, give them liberty to help; not via nepotism or tribal or religious means.

If they(Government) choose not to be better, decide to increase price of mobile data, in addition to other increase of basic amenities, security issue would be their top priority.

dis government are clueless, brainless shameless, heartless and above all very useless

We will shut down Nigeria

What exactly is wrong with this people?

Stewpid people, waiting till una increase fueil

Increase it all and make this government more harder ... Those that voted for change will not have change again in Jesus name

lol

What I know is that this wicked government will be disgraced one day

Survey

Click like if buhari is the worst president ever in nigeria. Click share if u disagree.

Only 4 Naija u go dey suffer & still dey claim Ajebutter.

Seun yawa go soon dey for you oh? Better start to unban all the big boys and girls wey hold side!

amnotunderstanding. you mean glo go form monopoly over mtn, airtel and etisalat cuz i know the closest to glo is mtn which is more than double the price of mtn, 21k to 48k respectively, this people are just plain abnormal, or they mean the big4 go form a monopolistic market to kill others, i know etisalat is even charging far above mtn and glo combined, so which kind monopoly dem wan form, this people should just shut up, if they want to address the big players from forming monopoly, make dem go talk to lafarge and dangote in the cement industry, those are the only known 2, others don die

Buhari shiitu

are we progressing or retrogressing in this country?
imagine the stupid excuse. it is obvious that Ncc have been compromised. if they feel for Telcos's who will feel the pain of the masses.
the last time I checked we don't have regular electricity at home. there is no increment in salaries despite the fact that price of goods are on the increase. no security. who will compensate the masses.
am beginning to feel that this administration is confused.

R

One chance government
If I say A, you say P and another man say C
Omo na you sabi ooooh
No more FP