As FG Forces Telcos to Cut Subscribers’ Data Cost…

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Minister of Communications, Dr. Isa Ali Pantami

The recent directive from the Minister of Communications and Digital Economy that telecoms operators should cut data subscription rates, has been received with mixed feelings by the operators and subscribers, writes Emma Okonji

The Minister of Communications and Digital Economy, Dr. Isa Ali Ibrahim Pantami, last week, directed the Nigerian Communications Commission (NCC) to resolve the issues of illegal data deduction and review downwards, the cost of data in the country within five days.

While telecoms subscribers have hailed the directive of the minister, which they said was long overdue, having been subjected to high cost of data against their wish for too long a time, telecoms operators are however disturbed about the directive, insisting that the directive is unachievable, owing to the high operational cost of doing telecoms business in Nigeria.

Telecoms operators had, before now, consistently complained about the high cost of data in Nigeria, despite the berthing of several submarine broadband cables at the shores of the country like MainOne, Glo 1, MTN WACS, SAT3, among others. The subscribers were of the view that with the landing of the various submarine cables at the shores of the country, operators have comparative advantage of reducing cost of data in Nigeria, but they expressed their dissatisfaction that cost of data still remained high in Nigeria, thus limiting businesses, organisations and individuals from accessing the internet for e-Commerce trade, government online activities and personal browsing.

The Directive

Pantami, last Tuesday, directed NCC to resolve the issues of illegal data deduction and review downwards, the price of data in the country within five days. The minister gave the directive during the presentation of Mr. Adeleke Morofolu Adewolu, the new NCC board member/executive commissioner by the commission’s chairman, Senator Olabiyi Durojaiye, at the ministry’s headquarters in Abuja. The minister pointed out that there were numerous complaints from Nigerians regarding illegal data deduction and high price of data, adding that he had personally experienced illegal data deduction. He charged NCC to facilitate the penetration and expansion of 3G and 4G and urged the commission to design a target on how mobile operators could expand penetration of 3G and 4G in the country.

Pantami said: “The main agenda of NCC is to protect the interest of customers and our priority is to protect Nigerians. It is our collective responsibility to make sure we give 100 per cent support to Mr. President to deliver his key mandate.”

He charged the new commissioner to use his experience and support the board to fight corruption, noting that the success of NCC and the Federal Ministry of Communications and Digital Economy remained the success of Nigeria.

The minister noted that the mandate of the ministry had been expanded towards improving the economy of the country through ICT, hence, there is a need to work together for the progress of Nigeria.

Subscribers’ Reaction

Following the directive of the minister that telecoms operators should embark on downward review of data pricing in the country, telecoms subscribers, who for the cost of data, have commended the minister for the directive, saying the directive is long overdue. One of the subscribers to MTN, who identified himself as Adeleke Jimoh, said although the telecoms operators often come up with some palliatives through promos to reduce cost of data and increase data gigabytes for the same fixed rate, to enable subscribers have more data for browsing.

He, however said the rate at which such data runs and depletes, was alarming, making it impossible for subscribers to actually stay long on the internet. Other subscribers, who expressed their feelings over the directive, also commended the minister, while explaining that Nigeria had the highest rate in data billing in the world. They called on the telecoms regulator, NCC, to ensure that all telecoms operators comply with the directive of the minister to further reduce the cost of data across all networks.

Telcos Reaction

Speaking on the new directive, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said enforcing reduction in data cost without addressing the challenges of doing telecoms business in Nigeria, would make the directive practically unrealistic.

He wondered how the directive would work without a good framework that will save the huge investments made by the telecom operators. “I don’t know how the government is going to achieve data reduction in five days without putting into consideration the high cost of operating our businesses and the very harsh operating environment we are in.

“Why are they trying to muzzle the NCC and stampede it into doing what is unrealistic? Do they know that operators don’t just sit down and fix tariffs?”

They, with NCC, rely on so many things before coming up with tariffs.

“We do not know under what circumstances the directive was given, and to be honest with you, we don’t know how that is going to be achieved.

“We have said it several times that when policies interfere with commercial matters, the industry will be jeopardised. Government needs to be careful not to whittle down the powers of the regulator. To arrive at prices NCC normally conducts survey and research, and after all that, it will benchmark the country’s tariffs based on what is obtained in other jurisdictions,” Adebayo said.

Data Depletion

Following the global shift from voice to data communications as a result of the free data services offered by Over The Top (OTT) telecoms service providers, subscribers in Nigeria have complained of data rip-off by telecoms subscribers, who they alleged, programmed their data bundle to deplete very fast while browsing.

Although the incursion into data communication by Mobile Network Operators (MNOs) is a global phenomenon meant to generate additional revenue strings for MNOs in order to make up for the loss in voice revenue, occasioned by activities of OTT players, subscribers have alleged that MNOs, like MTN, Globacom, Airtel, 9mobile and ntel, are however using the opportunity to rip off telecoms subscribers of their money, through early data depletion. The situation is such that subscribers’ data bundle purchased from MNOs, depletes in a twinkle of an eye after just few usage, which the telecoms subscribers have described as huge rip-off in the system.

Majority of the complaints have been on fast depletion of data bundle after each successful purchase of data bundle from their data service providers. One of the subscribers who identified himself as Mr. Yemi Adeniran, said he has multiple SIMs for data services, and that the rate at which the data depletes from his devices after visiting few websites was alarming. According to him, as soon as data is loaded into my device and I visit few websites, the data bundle depletes faster than expected, forcing me to buy another data when I have need to go online another day.

Other complaints from subscribers, include fast data depletion while on social media. A subscriber said his monthly data bundle of 1.5 Gigabyte for N1,000, which is supposed to last for a period of one month, does not stay up to two weeks before he gets a notification that he has consumed up to 75 per cent of his data usage and that within few days he is cut off because of insufficient data.

Some other complaints have to do with the inability of telecoms subscribers to access the internet when they actually have sufficient data bundle to do so, which they attributed to poor network service on data delivery. Some other customers blamed the situation on weak internet infrastructure across the country. According to them, they got disconnected intermittently from the internet, especially at a time when they required the service the most, a situation, which is said to be hurting businesses that relied heavily on internet.

Some of the customers said they pay so much for monthly subscription, yet they do not get the full value for their monthly subscription. They have therefore called on NCC to come to their rescue, and to compel ISPs to compensate for any downtime suffered by their customers and to ensure that service providers deliver unhindered internet access to customers.

Data Rollover

In order to ameliorate some of the challenges in use of data, the Nigerian Communications Commission (NCC), introduces Data Roll-Over policy, which allows telecoms subscribers the benefit of rolling over unused data which they could not exhaust at the expiry date of their data bundle plan. According to NCC, the Data Roll-Over policy became necessary, following complaints from millions of data subscribers that they were being short-changed by internet service providers by deleting every unused data at the end of the expiration date.

NCC had therefore in the past, directed all telecoms operators to give a 14-day window to subscribers after the expiration of their monthly data subscriptions, to enable them exhaust their unused data bundle before rolling over. Before the directive there were myriads of complaints from telecoms subscribers that service providers do not give them enough time to exhaust their monthly data subscription plans before they are either disconnected or forced to rollover the excess data bundle to the next month after purchasing another monthly data plan.

To address this concern, the NCC issued a directive to the telecoms operators to implement 14-day window for data rollover. The 14-day window, after the expiration of the 30-day data plan, allowed subscribers to completely use their current monthly data subscription plans, before rolling over the unused data to the next month after purchasing a new monthly data plan. The decision of NCC to address the ubiquitous complaint by subscribers was in line with its resolve to always protect the interest of telecoms consumers. The resolve followed the regulatory body’s declaration of 2017 as the year of telecoms consumers.

Most light users of data often have surplus of data at the end of the month, but cannot rollover the excess data to the next month. They had to forfeit their unused data of the previous month at the beginning of a new month, a situation they also described as data rip-off. MTN Nigeria Communications Plc, one of the MNOs, had said in a statement that the company had provision for data rollover as palliative to enable MTN customers have more access to the internet, through subscribers’ data bundle. According to the statement, to roll over unused data balance, customers must renew their bundle before expiration or before the end of grace period. Auto renewal only applies, if the customer selects the “Recurrent” option at the point of activation of any data bundle.

Data Price Floor

NCC had on November 1, 2016, written to mobile network operators (MNOs) on the determination of an interim price floor for data services after the stakeholders’ consultative meeting of October 19, 2016.

According to NCC, 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, and not necessarily to hike price.

The data price floor is a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.

The price floor in 2014 was N3.11k/MB, but was removed in 2015, and further reintroduced at N0.53k/MB. But even at that, operators were charging different rates. While Etisalat (now 9mobile) offered N0.94k/MB, Airtel offered N0.52k/MB, MTN offered N0.45k/MB and Globacom offered N0.21k/MB.

The smaller operators/ new entrants also charged at different rates. Smile Communications charged N0.84k/MB, Spectranet charged N0.58k/MB and NATCOMS, which operates as ntel, charged N0.72k/MB.

Based on the differentials in data price floor among telecoms service providers, NCC decided to introduce a new price floor of N0.90k/MB, but subscribers opposed it for the fear that it would increase cost of data services.

The differentials in the cost of data by different operators, did not go down well with subscribers who protested the high cost of data as at 2016, and till date, subscribers still complain about high cost of data, hence their decision to commend the minister for the directive to reduce cost of data across all networks.

Based on several agitations and opposition that greeted the directive to introduce price floor for data segment of the telecommunications sector, NCC, on November 30, 2016, suspended the plan, expected to take effect from December 1, 2016.

According to NCC, 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 weighed all of this and consequently asked all operators to maintain the status quo until the conclusion of study to determine retail prices for broadband and data services in Nigeria, NCC said.

But seven months after suspension of the proposed data price floor by the NCC, industry stakeholders called on the telecoms industry regulator to revisit it for the benefit of operators and the subscribers. The stakeholders said the need to revisit the suspended price floor became necessary in order to maintain business continuity in the telecoms sector.

The operators were of the view that upward review of data price floor would enhance quality service delivery.

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said there was need for upward review of the data price floor in order to help telecoms operators remain in business and offer quality and reliable telecoms services to their subscribers.

According to him, the suspended data price floor should be revisited and the price raised, because there is a limit to which operators can reduce cost of service delivery and still remain in business.

He expressed fears that if the data price floor remain low, more operators may go out of business. He said registered telecoms service providers used to be 35 in number, but that the number drastically reduced to 14 players in 2017, with further reduction as of today, which he said could be a big threat to telecoms growth.

Internet service providers (ISP), have called on the NCC to as a matter of urgency, come up with the new data floor price that will determine the charges of internet service delivery and also protect the smaller ISPs from undue market forces from the bigger ISPs that are mostly telecoms operators, licensed to provide both voice as data services.

The situation, according to ISPs, is forcing traditional ISPs to go out of business, coupled with the harsh business environment in the country. The effect has cut down on the current 103 licensed ISPs, as only few of them were able to renew their licenses in 2018 and 2019, an indication that more ISPs may have gone under this year, the ISPs said.