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Data price hike: Senate meets NCC, Telcos

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Following the Nigerian Communications Commission (NCC) u-turn on data tariff increase, the Nigerian Senate committee on communications on Tuesday met with the telecommunications regulatory body and major telecommunications company in Nigeria to determine the correct pricing for data.

It could be recalled that telecom operators announced intention signalled by the NCC to increase data price effective December 1, which was halted by the Nigerian Senate with a mandate on the Senate committee on communications to investigate the proposed hike in data tariff.

While the NCC had since made the u-turn without implementing the increase, and the Minister of Communications, Adebayo Shittu, has said the Federal Government (FG) of Nigeria never authorized NCC to hike data tariffs, indications from the investigative meeting held yesterday, both the NCC and the telecoms operators are bent-on on hiking data price.

Speaking at the meeting, the Vice Chairman of the Committee, Senator Solomon Adeola, relayed the Senate’s concern over the proposed data price increase. Senator Adeola said that Nigerians were united in their opposition that the proposed increase in the price of data should be stopped. According to the senator, the hike in data price was ill-advised especially with the biting economic situation in the country.

The Executive Vice Chairman of NCC, Mr Umar Danbatta, while addressing the committee, said that the intervention of the NCC was not designed to rip-off the consumers. Danbatta explained that if cheap prices were introduced, they may end up undermining the telecom service operators.

According to Danbatta, the need to avert crisis in the telecom industry informed the introduction of the interim price floor for data services – ₦0.90k per megabyte.

“We wanted to protect the Nigerian consumer from unhealthy price war in what may lead to a monopoly that may lead us to the days of NITEL,” Danbatta said.

“We did not increase any price but merely provided a regulatory standard to protect small telecom operators,” he added.

In the defence of the NCC, Danbatta said that there were some telecom operators that lacked the capacity to compete with the big operators in the field. Therefore, the  ₦0.90k price floor for data was a benchmark below which no operator could sell.

The Communications Minister at the meeting said that in reality the telecom service providers were operating under unfriendly business environment including lack of electricity and increasing security challenges.

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“This is one area that I believe that we all must face the reality. The government in its wisdom, and I am happy the National Assembly, promulgated the National Communications Act which required that there be established an NCC.

“If you look at the NCC law, it is positioned to reflect experiences, expertise and all of that and I want to believe that there must not be too many interventions in the activities of the NCC,” Shittu said.

Adebayo Shittu while reflecting on the data hike pointed out that the NCC was deficient at properly communicating the new price floor to the public. He, however, appealed to the Senate to assist in the area of holding the balance between the interest of the operators and the interest of the Nigerian masses.

The Chief Executive Officer (CEO) of Etisalat, Matthew Willsher, while speaking to the Senate Committee said that the absence of a price floor is a major problem, adding that the absence of a data price floor led to the dramatic decline in data pricing.

Ferdinand Moolman, CEO of MTN, who was also in attendance spoke about the impact of inflation on the sector. Mr Moolman asked that the NCC does a proper cost and price analysis which will factor in the current inflation in the country.

Moolman said, “All of us aware that inflation is going up to 17 to 18 per cent, we have experienced price increase in all other sectors yet we have seen price drop in the telecoms sector in the last two or three years and you have heard this said by a number of speakers”.

Addressing the committee’s concerns on the data price hike, Danbatta explained that the NCC does not set prices but provide regulatory safe guides.

Danbatta made it clear to the Senate Committee that the NCC would conduct an extensive scientific research to determine the correct pricing for data that would be acceptable to Nigerians.

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