NCC Suspends Directive on Data Tariffs Hike

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  • Senate summons minister, regulator, network providers

Omololu Ogunmade and Dele Ogbodo in Abuja

Following the outcry over the proposed introduction of a new price floor for the data segment of the telecommunications sector that would have led to a hike of data tariffs, the Nigerian Communications Commission (NCC) has suspended any further action on the proposal.

A statement wednesday by NCC spokesman, Mr. Tony Ojobo, said the decision to suspend the directive was taken after due consultation with industry stakeholders and the general complaints by consumers across the country.

“The commission has weighed all of these 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,” it said.

NCC had written to the mobile network operators (MNOs) on November 1 on the determination of an interim price floor for data services after the stakeholders’ consultative meeting of October 19.

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.

The price floor in 2014 was N3.11k/MB but was removed in 2015. The new price floor that was supposed to come into effect today 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.

NCC explained that the decision on the price floor was taken in order to protect 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.

“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.

“This statement clarifies the insinuation in some quarters that the regulator has fixed prices for data services. This is not true because the NCC does not fix prices but provides regulatory guidelines to protect the consumers, deepen investments and safeguard the industry from imminent collapse,” it added.

NCC pointed out that before the new suspended price floor of N0.90k/MB, the industry average for dominant operators including MTN, Etisalat and Airtel 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 charged the following: Smile Communications N0.84k/MB, Spectranet N0.58k/MB and NATCOMS (NTEL) N0.72k/MB.

“The NCC as a responsive agency of government takes into consideration the feelings of the consumers and so decided to suspend the new price floor,” it said.

But before the industry regulator announced the suspension on the proposed new price floor for data services, the Senate yesterday summoned the Minister of Communications, Mr. Adebayo Shittu, NCC and network providers to appear before its Committee on Communications to explain the rationale behind the decision to increase data tariffs.

The upper legislative chamber also ordered network providers to put paid to the plan to commence implementation of the new tariffs today.

Consequently, the Senate mandated its Committee on Communications to commence a comprehensive investigation into the matter and report back to it within one week.

The resolutions were the aftermath of a motion moved by Deputy Senate Leader Bala Ibn Na’Allah during which he condemned the planned hike of data tariffs, saying it would further impoverish the people.

Also speaking on the matter, Vice-Chairman of the Committee on Communications, Senator Solomon Adeola (Lagos West), described the policy as not only “unholy” but also “unfriendly”.

He assured the Senate that the committee would act on the mandate and report back to it next Tuesday.

“We are up to the task. And I can assure the Senate that we will swing into action immediately. We will invite all the necessary agencies that are involved in this policy that is unholy and unfriendly and get back to the Senate unfailingly on Tuesday,” he said.

Senate President Bukola Saraki accused the NCC of failing to carry out enough consultations before announcing the policy.

He also asked the committee to investigate allegations of non-compliance with laid-down regulations by telecoms operators.

NCC had in a letter addressed to telecoms operators on November 1, put the interim floor price for data services at 0.90k/MB for big operators, adding that “this rate will subsist pending the finalisation of the study on the determination of cost-based pricing for retail broadband and data services in Nigeria”.

Acting on this directive, MTN sent text messages to its customers on Monday, announcing the hike in its data tariffs beginning today.