Planned upward review of data tariff by telecoms operators ran into stormy waters, as the Senate was reported to have halted the planned price increase. The debate over the issue assumed a new dimension when the Senate Committee on Communications was reported to have approved the increase. However, less than 12 hours; the Senate Committee debunked the report on its approval of the price increase. SEGUN ADEBAYO reports on this unsettled matter that is putting both consumers and operators on edge.
The plan to upwardly review the price of data began far back in 2013 when telecoms operators came under the so-called heavy burden of operational costs made worse by declining efficiency in the power sector. As early as October 2016, telecoms operators had written to the Nigerian Communication Commission (NCC) requesting approval to adjust upwards the data tariffs. In the mix of this request, most Nigerians reacted angrily and sought the National Assembly’s intervention to halt what they described as ‘offensive’ and ‘exploitative’ proposal. As the debates gathered momentum and it seems the operators were about having their way, the Nigerian Senate stepped in to halt the planned increase, citing present economic hardship caused by the prevailing recession as a major reason. So, less than 24 hours after the upper Legislative chamber cautioned against the increase and the NCC, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) declared that consumers should expect poor data services over the planned data price increase. According to the chairman of ALTON, Gbenga Adebayo, there was need to effect an upward increase in data tariff in order to offer improved data services to subscribers. Underscoring the opposition that greeted the planned upward review in data tariff, Adebayo said the operators fully understood the public sentiments that greeted the announcement of a minimum data tariff being introduced by the NCC), adding that the regulatory agency intervened to set the data tariff floor in view of its statutory responsibility to promote healthy competition, by periodically reviewing voice and data tariffs in the industry. Critics have rejected what many stakeholders and sector operators consider an as ‘uncommon display of public friendly concession’ by the NCC, following the suspension of further action on the price hike for data. But the ALTON chairman insists the Commission’s intervention was to ensure the sustainability of the Nigerian telecommunications industry, saying, “ALTON notes that it is within the statutory remit of the NCC for it to make decisive interventions to address the data price concerns which had led to data prices falling to unreasonably low levels.” “This is with the effect that telecommunications operators were unable to recover the cost of providing data services and reinvest in capacity expansion to accommodate the increased usage arising from lower tariffs. The situation has been compounded by the recent economic challenges characterised by the steep depreciation of the naira. It is characterised by the need to resort to the parallel market and foreign exchange scarcity, which have considerably increased the capital and operational cost of providing telecommunications services. This has made current data tariffs unsustainable” he said. According to Adebayo, “This situation, if left unaddressed, could result in a sustained deterioration in the quality of data services across all networks and the attendant poor quality of experience for users. In this regard, our members await the conclusion of NCC’s market study, when the commission will be in a position to determine its requisite intervention.” The ALTON chairman said it was necessary for the provision of world-class data services for the overall benefit of the Nigerian subscriber and the Nigerian economy. In halting the planned upward review of data tariff, the telecoms regulatory agency had maintained that operators were to continue with current rate against expectations that the increase would have changed the fortunes of the telecoms sector from December 1, 2016. Reacting to what industry’s watchers described as a demonstration of sensitivity to public feelings, Director, Public Affairs of NCC, Tony Ojobo said the “decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by Consumers across the country.” The Commission’s action, according to Ojobo, became imperative taking into consideration the concerns that trailed the directive to introduce price floor for data segment of the telecommunications sector beginning from December 1, 2016, adding, “The NCC as a responsive agency of government takes into consideration the feelings of the consumers and so decided to suspend the new price floor.” He further said, “The decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by Consumers across the country”, adding that, having weighed all the issues and concerns expressed, the Commission consequently requested “all operators to maintain the status quo until the conclusion of study to determine retail prices for broadband and data services in Nigeria.” “In taking that decision, the smaller operators were exempted from the new price regime, by virtue of their small market share. The decision on the price floor was taken in order to protect the consumers who are at the receiving end and save the smaller operators from predatory services that are likely to suffocate them and push them into extinction. 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”, stressing that, “The price floor is not an increase in price but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators,” the NCC image maker stated. According to the Public Affairs Director, “This statement clarifies the insinuation in some quarters that the regulator has fixed prices for data services. This is not true because the NCC does not fix prices, but provides regulatory guidelines to protect the consumers; deepen investments; and safeguard the industry from imminent collapse.” The price floor in 2014 was N3.11k/MB but was removed in 2015. The price floor that was supposed to flag off on December 1, 2016 was N0.90k/MB. Before the new suspended price floor of N0.90k/MB, the industry average for dominant operators, including MTN Nigeria Communications Limited, EMTS Limited (Etisalat) and Airtel Nigeria Limited was N0.53k/MB. Etisalat offered (N0.94k/MB), Airtel (N0.52k/MB), MTN (N0.45k/MB) and Globacom (N0.21k/MB). Other smaller operators/new entrants charge the following: Smile Communications N0.84k/MB, Spectranet N0.58k/MB and NATCOMS (NTEL) N0.72k/MB Meanwhile, contrary to speculations that the Ministry of Communications approved the upward review in data tariff, Minister of Communications, Barrister Adebayo Shittu, has debunked such speculations, insisting the ministry has no hand in approving upward review of data tariff. He told journalists in Oyo State recently that the only organ mandated to approve increase in data tariff is the NCC and not the Ministry of Communications, adding that he learnt of the increase just like the common man on the streets. “The Ministry of Communications is saddled with the responsibility of providing political leadership for the ICT industry. By that, it means that the ministry is involved in the formulation of policy issues as opposed to dabbling into regulatory issues, which concerns the telecoms industries. By law, it is the NCC which has the power to regulate, to License, to also provide in a way frequency and all of that. The ministry does not have any business in issues of regulating the telecoms industry. “So when the NCC wanted to increase the so called data issues, they didn’t take permission from us (Ministry) and myself. So, I heard it like any other person in the society heard of it. But because the reason for all this is that the Nigerian State has failed in the agreement they had with the telecom service providers. They promised to provide them adequate power supply and security but all are not in place and they are spending a lot to provide them by themselves. Also the problem of right of way is involved with the high tax government and land grabbers are collecting from them,” the Minister said. Defending federal government’s passionate drive to improve the lots of Nigerians in the face of current economic hardship, Barrister Shittu said, “As a government, we must weigh the interest of our citizens against the interest of the operators. Otherwise, if it becomes un-provable for these companies to operate here, they will simplify pack and go. So, we also need to be considerate about their terms which we are not meeting. As a government and a ministry, we have neither supported or oppose the proposal. What we are saying is that NCC is a regulatory body, who has the manpower, technological wherewithal to decide, and when they take this decision, we must try to respect their expertise.” “This is because the Buhari government is at pains, if Nigerians are in pains. Government would not want to do anything that will bring pain and hardship to Nigerians, but again government must also face the reality that we are in a reality where you do not throw the baby away with the bath water. To create a situation where Nigerian interest at the end of the will not be jeopardized”, the Minister posited. Still, Another Controversy As Nigerians were thinking that the planned hike has been suspended for a long time to come, it was reported that the Senate Committee on Communications has approved the price hike. It said the committee’s lauded the decision based on the national interest. But in yet another twist, the Vice Chairman of the Senate Committee, Senator Solomon Adeola, debunked the story that the committee approved the upward review during its oversight visit to the corporate headquarters of the NCC. According to information placed on his personal website, Adeola noted: Our attention has been drawn to a publication with the misleading title “Senate Okays Data Price Hike, says NCC Acted in national Interest” in a national daily insinuating that the Senate through its Committee on Communications sanctioned data price increase by telecommunications service providers during an oversight visit to the Nigerian Communication Commission. There is no iota of truth in the misleading title as the contrary is the case from what the Vice chairman of the Committee Senator Solomon Adeola said in his presentation during the briefing by NCC Executive Vice Chairman, Professor Umaru Dambatta.” Sources in the National Assembly told Forefront that the Senate would continue to oppose any planned increase in data tariff, as the telecoms operators should bear with Nigerians who are undergoing pains due to the recession. Already, a Committee chairman in the Senate has declared that “telecoms operators should also bear the present hard times, just as they enjoyed the good old days when Nigerians spent billions of Naira for their services.” The NCC’s decision may have perfectly deflated many lawmakers and critics as well as douse already boiling consumers but with the telecoms operators are threatening clients with poor data services and NCC walking a tight rope to protect Nigerians, how long can the planned upward review of data tariff be on hold? This and other questions may only find answers as events unfold. As the controversy over the upward review of data price continues, not a few are predicting that Nigerians are far from seeing the end of the controversy.