The telecommunication companies in Nigeria have been sending out messages to their subscribers, notifying them about data rate increment effective today December 1, 2016. According to inside sources, the increment has become essential following complaints by small and new entrants into the data sector of a budding oligopoly. The gist is that the major players and incidentally all of them GSM operators and are four in number have mastered the art of lowering data rates in order to increase market share. But that’s not all.
The Nigerian Communications Commission, NCC approved a new “floor plan” or minimum pricing for data services by data operators. According to NCC, this new price regime is to “address market distortions, unhealthy price wars and value erosion that could threaten the going concern of the service providers.” To this end therefore, a new price template was approved by NCC and it is N0.90k per megabyte. This new tariff will subsist pending the finalisation of the study on the determination of cost based pricing for retail broadband services.
Investigations further reveal that the following are what was charged as fees for data per megabyte: MTN which is the largest operator charged N0.45k, Glo charged N0.21k, Etisalat charged N0.94k, while Airtel charged N0.52k. On the other hand, smaller operators like Smile charged N0.84k, Spectranet N0.58k, among others. Also, we learnt that other operators such as Multilinks and Starcomms were muscled out of the market. The same way Visafone could not cope and had to be acquired by MTN. The major plank upon which this increment is based from the above is simply to profit industry players. There is nothing to show to us that the Nigerian public, the consumers were taken into any form of confidence before the new tariffs were arrived at.
Now this brings to question the role of NCC in the whole mix. Granted that the commission is supposed to protect investments of operators and make room for even and fair playing ground, but in equal measure, they are also supposed and was set up to protect the interest of consumers. Is it fair to increase Glo data rates from N0.21k to as much as N.90k in a twinkle of an eye without recourse in the capacity of subscribers to pay? How can NCC set up with tax-payers money be interested in the business person who is supposed to have conducted feasibility before venturing into a business? This particular policy directive is wrong-headed and must be stopped.
The country is at a very precarious situation. Anyone can construe this as anything-over-taxation, telecom rate increment, government censoring social media backlash, etcetera; and they won’t be wrong. The wrong party here is the government represented by NCC and the ministry of communication. With rising prices of goods, commodities and services, government should be in the frame to ameliorate not add to the burden. Incomes are fast depleting, workers are being laid off, and those working are not regularly remunerated-therefore, this is the darkest patch to raise rates of services. While government claims it wants to kill monopoly/oligopoly, government if allowed to see this through will kill Nigerians. By the time Nigerians are dead from the yoke of high cost of living, we wonder who will now pay these high fees.
Everyone is in business to make profit. With the growth and expansion in the data sub-market, data usage is no longer about social media. It is now a stand-alone business of which when those businesses succeed they pay taxes to government at all levels. There are many jobs that would be lost as a result of this imminent price hike at a time we should be talking about price reduction. Secondly, many countries now offer free broadband services. Why should our own government officially seek to over-burden us. Not in this recession, not at any other time. If this price increase is allowed to stand, by the time National Bureau of Statistics release their figures for this month in week’s time, we will find out that this increment will worsen our inflationary trends. This is an undisguised no-no!
We urge the government to reverse this increment. The reasons advanced for it are hogwash and can’t be sustained at all by any stretch of doubt. NCC should rather think of other ways to help the small/new operators. The help should not be to kill the consumers. NCC must not be slave to special interests. NCC and other consumer protection agencies must wake up and do their job for the well-being of Nigerians.
NOTE: This editorial was written before the suspension of data price increase yesterday.