Following the proposed data price hike by the Nigeria Communications Commission (NCC), the Senate Committee on Communications met with key stakeholders yesterday to address the growing concern.
The Committee was mandated to investigate the proposed hike in the price of data tariff said to have been ordered by the NCC. The Vice Chairman of the Committee, Senator Solomon Adeola relayed the Senate’s concern over the proposed data price increase.
Senator Adeola, while speaking at the stakeholders meeting said that Nigerians were united in their opposition, that the proposed increase in the price of datashould be stopped. According to the senator, the hike in data price was ill-advised especially with the biting economic situation in the country.
Professor Danbatta, (Vice-Chairman of the NCC, 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. We did not increase any price but merely provided a regulatory standard to protect small telecom operators.” – Prof. Danbatta, Executive Vice Chairman of the NCC.
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 move by the NCC was primarily to avoid a situation where a dominant operator provides services far below what is obtainable in the sector in order to attract more customers. Having monopolies within the communications sector may lead to the closure of smaller operators.
The Minister of Communications, Adebayo Shittu said that in reality the telecom service providers were operating under unfriendly business environment including lack of electricity and increasing security challenges.
“This is one area that I believe that we all must face the reality. 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. – Adebayo Shittu, Minister of Communications.
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. Adebayo during the stakeholders meeting appealed to the Senate to assist in the area of holding the balance between the interest of operators and the interest of the Nigerian masses.
Adebayo also spoke about the importance of the ICT sector to bring about the transformation to increase the revenue and to sustain Nigeria’s economy.
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. He further said 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. Ferdinand asked that the NCC does a proper cost in price analysis which will factor in the current inflation in the country.
To address 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 research to come up with a price floor that would be acceptable to Nigerians.