By Olusegun Qazim
One. The NCC approval is for Telecom Operators to adjust their tariff prices by 50 percent within an already existing tariff band determined since 2013 – with a cap of 50 percent. That means they can increase up to 50% as a maximum but can chose to increase by a percentage less than 50%. Recall that this is a liberalized market, and prices are driven by competition: about 10 years ago, the cost of a call was around 50 Naira per minute, but competition among operators brought it below 50 Naira, and also introduced per second billing. Consumers should rest assured that as has been done in the past, competition will do a lot to drive prices down, in the months ahead, especially as the macroeconomic conditions of the country improve.
Two. Section 108 of the Nigerian Communications Act, 2003 (NCA) spells out the “Tariff Rate Regulation” power of the NCC, as follows: “Holders of individual licenses shall not impose any tariff or charges for the provision of any service until the Commission has approved such tariff rates and charges except as otherwise provided in this Part.”
Three. The last time the NCC exercised this regulatory function and approved a tariff increase in the telecoms sector was 2013 – over a decade ago. The inflation rate in 2013 was 8.5%, 12 years later, the inflation rate today is 34.80%. That is about a 300% increase!
Four. The telecommunications sector is one of the biggest consumers of diesel in Nigeria, accounting for diesel spending of about 40 billion Naira monthly. This diesel powers generators in over 30,000 mast sites on a 24-hour basis to ensure that we all have network constantly. The sector is also very FX-dependent because of its imported equipment which currently have no local/indigenous alternatives. In 2013, both the dollar and the price of diesel were less than N200. Today, each one of these is well over a thousand Naira, a monumental pressure on the cost of delivery of service. No sector can survive keeping prices constant in the face of these drastic cost increases.
Five. Telecoms operators requested approval for over a 100 percent increase, but the NCC approved only 50 percent. Upon approving this, the NCC has vowed to ensure strong monitoring of Quality of Service and full compliance by operators. So, in other words, the operators asked for an increase, in return, they will be held to account for any service lapses experienced by consumers in that time. According to the NCC, it has amended its rules to be able to fine operators with heavier sums and for even the most basic violations.
Six. Operators must also communicate the new rates in a simple and transparent manner; the NCC says it has given them a “Tariff Simplification Guidance” which in summary says that they must tell you everything about your tariff: no hidden charges or mago-mago plans that say one thing but mean another.
Seven. To whom much is given, much is expected. Telecom operators have no choice but to improve their services. MTN, 9Mobile and Airtel have made open commitments that with this increase they will do all that is necessary to invest in new equipment that would ensure improved quality service. They now have the funds to do so, they can’t give anything less. There is no room for complaining any longer. Nigerians must enjoy better services, and the NCC must do more to engender stronger competition, which will help moderate prices and ensure that the customer remains king.