Telcos to increase voice, SMS and data tariffs by 40%, NCC, stakeholders react

Telecommunications companies cite rising cost of doing business as the major influencer of the fee hike.

Telcos to increase voice, SMS and data tariffs by 40%, NCC, stakeholders react

Telecommunications operators in Nigeria, through their umbrella body, the Association of Licensed Telecoms Operators of Nigeria (ALTON), have sent a letter to the Nigerian Communication Commission (NCC) about their intention to increase voice, call, and data tariffs by 40%.

The telcos cited rising cost of doing business, especially the cost of diesel and multiple taxations from diverse agencies from the three tiers of government as major influencers of the move.

Sources from the telcos confirmed to Vanguard that the letter has already been sent to the NCC through their umbrella body, ALTON. If approved, voice calls, short messaging services (SMS), and data charges will see a 40% increment in cost.

This would mean that the average 11k per second charge, #8.95 per minute which is the current cost of voice call would go up #12.53, while SMS will go from #4.00 to #5.61.

A reliable source from NCC confirmed the fact that the commission understands with the telcos the need for their intention to increase service tariff. However, he said that due protocol to enforce this must still be adhered to.

The source said: “I am aware that the ALTON sent in a letter with a demand for increment in tariffs, but there is a process which is rigorously taken before increments are made on tariff.

“The current tariff they are currently operating with went through that rigour. So, even if their demand will be considered, it will also take a process which is not going to encourage an instant implementation” he added.

Part of ALTON’s letter read: “As the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds.

“In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the commission’s intervention to minimise the impact of the challenging economic issues faced by our members.

“Details are: Upward review of the price determination for voice and data and SMS. Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.

“With respect to voice and SMS cost, ALTON respectfully requests the commission to consider a mark-up approach to address the upward price adjustment desirable for the industry. We have enclosed herein and marked Annexure 1 of our proposal in that regard.

“For data services, we wish to request that the commission implements the recommendations in the August 2020 KPMG report on the determination of cost-based pricing for wholesale and retail broadband service in Nigeria. Excerpts from the report are attached and marked Annexure 2 to provide a further illustration.

“In implementing the said recommendations, however, we recommend that the 40 per cent increase in the cost of doing business be factored in to arrive at a cost price per Gigabyte in view of the current economic situation.”

Reacting to the matter, the executive director, Paradigm Initiatives Nigeria, Mr Gbenga Sesan, said: “The holy alliance the operators entered with ministry of communications and digital economy on the bad NIN-SIM linkage policy has come to haunt them.

“The effect of that bad policy is what they are reacting to. They should have stood their ground that the policy was not right, instead of compromising their knowledge.

"If they increase prices, people will adjust. Already we are used to telephone communications. What will suffer is the aggregate economy, which is why we didn’t want that evil policy in the first place.

“The Over the top operators will now gain ground because people will call more on whatsapp and other Voice over internet protocol platforms than normal voice calls.

“That is where the revenue that was supposed to accrue for government will go to people who do not have physical in our economy."

In the letter sent to NCC by ALTON, the body also made mention of other demands as the need to have other corrective measures beyond monetary sanctions, extension of payment timeframe for regulatory fees, and an order acknowledging telcom infrastructure as national infrastructure to help mitigate losses to the telcos from the destruction of these structures.

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