The Nigerian Communications Commission (NCC) has been under attack for its directive to ‘big’ telcos to hike data tariff. Many Nigerians disagree with the regulator that it designed the initiative to protect small players from the big players in the telecoms sector, report LUCAS AJANAKU and JOSEPH JUBUEZE.
NIGERIANS would have woken up today to a new price floor for data, but for the protests against the plan.
Telecoms operators’ regulator, Nigerian Communications Commission (NCC) directed big carriers to increase data tariffs beginning from today. The move was to check the emergence of dominant operators in the data service segment of the industry.
In a letter dated November 1 and addressed to the telcos, the NCC put the interim price floor for data services at N0.90k/megabyte (MB) for big operators. It added that the rate will remain in force pending the finalisation of the study on the determination of Cost- Based Pricing for Retail Broadband and Data Services in the country.
In response to the regulator’s directive, Nigeria’s largest carrier, MTN, had sent a text message to all its customers, preparing their minds for a new regime of data tariff. The short text message read: “Dear customer, please be informed that from 1st Dec, some MTN data tariffs will be increased to reflect the new rates set by the NCC to operators. Thank you.”
Referenced NCC/PCEA/T&C/TRF/MTN/006 and entitled: “Re: Determination of an Interim Price Floor for Data Services, the memo reads: “We refer to our letter dated July 29, 2016 at the industry stakeholders meeting that was held on October 19, 2016, where service providers were asked to comment on the interim price floor for data services.
“The Commission has carefully reviewed all submissions and hereby make the following determinations:
“The interim price floor for Data Services is No.90k/MB for big operators. 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.
“In order to promote a level playing field for all operators in the industry, encourage small operators and new entrant to acquire market share and operate profitably small operators & new entrants are hereby exempted from price floor for data services.
“For avoidance of doubt, a small operator is one that has less than 7.5 per cent of market share and a new entrant is an operator that has operated less than three years in the market.
“All operators are directed to ensure that subscribers are not automatically migrated to the PAY-AS-YO-GO (PAYG) platform.
“Also note that the effective date for the interim price floor is December J 2016.
“In view of the above, all service providers should ensure that tariff for data services reflect the determination.”
The Policy/Competition and Economic Analysis Director Josephine Amuwo and Legal Regulatory Services Head Yetunde Akinloye signed the memo on behalf of the NCC’s Executive Vice Chairman/Chief Executive Officer (EVC/CEO) Garba Dambatta, a professor.
However, the propriety of the decision to hike data tariff at time citizens reel under the pains of recession, drew the ire of Nigerians.
Not a few Nigerians accused the NCC of insensitivity. The social media users and internet habitues were more critical of the development. They described the more as a decoy by the Federal Government to shut them out of the only platform available to express themselves.
The Senate moved yesterday to cool the rising temper by passing a motion asking the Commission to pull the breaks on the proposed internet data tariff hike.
In the motion moved by Senate Deputy Leader Bala N’ Allah under matter of urgent importance, the upper chamber condemned the planned data tariff hike and asked the NCC to halt the increase immediately.
Senator Gbenga Ashafa spoke of the need for urgent intervention by the Senate Committee on Communications over-sighting the NCC.
He said: “Certainly, there are more creative ways to achieve needed competition than inadvertently stifling the ability of Nigerians to access data.
“I am absolutely in support of the resolution reached on the floor of the Senate today (yesterday) to the effect that the NCC should halt any such planned increase in data tariff.”
Labour kicks
The Trade Union Congress (TUC) urged the Federal Government not to increase the cost of data to avoid further pressure on mobile telephone users.
Its President Bobooi Kaigama, warned in a statement in Lagos that the decision to raise data tariff could trigger insecurity. He described it “it as unacceptable.”
Kaigama said the increase, if implemented, would further frustrate the people who were already burdened by high cost of goods and services.
The statement reads: “We feel worried about the move because data is one of the cheapest ways to empower the teaming youth. “This move, if allowed, will make it unaffordable. This is insensitive on the part of the parties involved.”
He urged the government to increase awareness for citizens’ participation in Information Communication Technology (ICT) rather than discourage them from being ICT-compliant.
According to him, the decision if implemented will obstruct the drive to increase youth’s participation in ICT.
“Cheap internet data is a vehicle to economic development. It is very unfortunate and inhuman to come up with such idea at a period of recession,” he said.
NATCOMS reacts
To the National Association of Telecom Consumers (NATCOMS), the move smacked of insensitivity.
In a statement through its President Deolu Ogunbanjo, NATCOMS said: “We view the directive as insensitive, callous, and diabolical. Since NCC is an agency of the Federal Government, the purported directive is one more design by the government to cast more financial burden on the already depressed citizenry.
“The inimical directive, if implemented, has grave and far-reaching consequences; the gains of telecommunication revolution we have made so far will be rolled back. The policy desire to attain 30 broadband penetration by 2018 will no longer be attainable, with a high prospect of rolling back the current 13 broadband access via mobile. Those e-businesses and small scale businesses that rely on data and internet connectivity to offer their services will go underground and their promoters returning to the labour market and thereby compounding the unemployment situation in the country.
“Since the data tariff increment is just a prelude (testing the water) to voice calls tariff increment, telecommunication services will now be limited to the rich, and the poor, who constitute about 90 of the population, will be denied access.
“Within the current suffocating economic situation in the country where prices of goods and services go up every day and thereby undermining the people’s standard of living, the directive is just a mirror of an inconsiderate policy maker.”
Ogunbanjo accused the NCC of not doing due-diligence and not carrying out any consultation whatsoever, through any of its consumer engagement platforms.
The statement further reads: “Data/internet availability means more youth engagements, because they use data to develop apps and build software. With what the NCC has done, these young minds, who develop apps will be slowed down and limited.
“Data/internet service is the “petrol” of all electronically-driven businesses, which means that the cost of doing business will also increase.
“The directive is ill-advised, illegal and parades all features of economic adversity and should be withdrawn forthwith.”
ATCON backs NCC
But the Association of Telecoms Companies of Nigeria (ATCON) President, Teniola Olusola, said critics of the NCC directive got it all wrong. He said the NCC has not directed the telcos to hike data tariffs contrary to insinuations. Teniola said the service providers embarked on tariff increase a long time ago.
According to him, what the regulator did was to apply the floor in pursuit of its responsibility to ensure a level-playing field for all the players in the industry.
Teniola insisted that contrary to speculations, it was the telcos that raised the tariffs, adding that the regulator merely stepped in to save the situation.
He explained that the regulator has a duty to protect the consumers as well as the telcos, who he argued operate neither as a charity outfits, nor not-for-profit organisations.
On its effect on small businesses that rely on the internet to do business such as digital marketing, Teniola said the development will only give them options, adding that ATCON’s interest is in bringing in more players to the industry for end-users to have freedom of choice.
“We want small players to compete with the big ones to deepen the industry,” he said.
He, however, lauded the groundswell of opposition to the alleged tariff hike, describing the reactions as an indication that consumers know their rights.
Minister disowns plan
Communications Technology Minister Shittu Adebayo denied having foreknowledge of the planned data tariff increase.
Speaking on Fact File, a live radio programme, the minister said he heard the news just like any other Nigerian
“The NCC is in the best position to tell Nigerians the need for data tariff increase. I heard the news like other Nigerians. It is the NCC that should explain for the justification for it
“I am not privy to it and the Federal Government is not a party to it. We never gave any such directive to the NCC. Government will do everything to protect the interests of Nigerians.”
On insinuations that the step is to take the social media platform out of the reach of the average Nigerian, Adebayo said the NCC must have been motivated by logistics reasons.
“The reasons would have been more of logistics and not political. There is no plan by the government to gag Nigerians from airing their views. The government is not aware of any plan to raise data tariff”, the minister said.
Responding to the flouting a federal directive to operators to stop unsolicited messages and voice calls to registered lines, Adebayo said: “As a minister, I am not insulated from such unsolicited sms and voice calls. You remember I had a meeting with mobile telecom operators over this issue.”
Other callers on the programme wonder why the service providers have not complied with the directive to stop sending unsolicited messages and they have not been sanctioned by the regulator.
They accused the operators of fleecing Nigerians. “In other climes, operators are bringing down tariff but they are raising it here in Nigeria. They are taking advantage that the regulators are not doing what they should do.”
Lawyer sues NCC, telcos
A Lagos-based lawyer Kabir Akingbolu yesterday filed an originating summons at the Federal High Court in Lagos to challenge the proposed data tariff increase.
Akingbolu is seeking an injunction restraining NCC, MTN, Airtel, Etisalat and Globacom Limited from increasing data tariff.
The tariff increment, which was ordered NCC, would have kicked off today but for its suspension yesterday.
The lawyer said given the unambiguous provision of Section 4 (1) (b) of the NCC Act, the Commission was under a legal obligation to protect consumers’ interests against unfair practices, including matters relating to tariffs and charges.
Akingbolu, in a supporting affidavit, said data, due to its indispensable nature, is provided freely in better economies or at the most, subsidized.
The lawyer wondered why the situation was different in Nigeria, adding that the increment came at a time the country was going through a recession.
He said if allowed to stand, it would not augur well for the citizens as life would become more frustrating for subscribers.
Regulator defends action
Speaking on the sideline of a forum on spectrum trading, the regulator’s Spectrum Administration Director Austine Nwaulune said the action was taken in the best interest of the industry.
He said: “These are for economic means. What you don’t want is to kill an industry. People are talking about erosion on Return of Investment; erosion of Average Revenue Per User (ARPU); what you don’t want is to put a car on the road and failed to make provision to replace it.
“What that means is that if the car stops working, you stop being a car owner. But if you put a car on the road and you know that that car will have a problem and you begin to make move to prevent such, it means you will be a car owner for long.
“So, what the regulator does in the car (analogy) is to ensure the car doesn’t die either in cold or hot. As the regulator, the NCC works to ensure and measure what is good for the industry. So, the whole process was to protect the industry from collapse.”
