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Why slash on data subscription rate may take time

Why slash on data subscription rate may take time


When the Minister of Communications and Digital Economy, Dr. Isa Pantami last week gave a five day ultimatum to Nigerian Communications Commission (NCC) that telecoms operators should cut data subscription rates, subscribers were very excited and  were singing his praises, commending him on the order which they said has long over due.

But, they (subscribers) may have to wait a little longer to jubilate as this directive has received several reactions from industry operators.

The NCC on its own part has written to the Minister and asked for extension of the five day ultimatum given to it, which  has been approved.

In this report, operators  gave Daily Sun reasons why the Minister’s order might take some time to be  implemented.

According to Olushola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON),  Nigeria is one of the 37 countries in Africa where data is cheapest.  He said, “What we obviously know, is that the cost of data will continue to decrease over time. And, we are working with various stakeholders to ensure the cost of data is reasonable for the consumers, considering the fact that the cost of doing business in Nigeria is one of the highest in the world.”

Teniola explained that, the fact that NCC requires more time to actually find out through empirical evidence and studies, the actual price that is required to be leveraged to the consumers is a good thing and what is expected of them to do because, you don’t just come and cut data prices.

“We have to ensure that the integrity of the industry is sustained. NCC will be consulting various stakeholders over the coming weeks or maybe months to find out exactly what can be done about offering consumers the best price for data.

In our opinion,  increased competition is the best way to ensure that prices are kept at a reasonable level for all consumers. Without competition, then that will not happen.

The ATCON boss also noted that the country is very vast and there are many people who still do not have access to the internet. “We have to be cognizant of that and that requires investments. So, the balance between attracting investments has to be measured against the reality of consumers wanting very cheap prices for data. If you make the data so cheap that consumers can afford it, then it will require the necessary investments for infrastructure to be able to give them the service. So you know what comes first, the investments or the reduction in data prices, you can’t have data prices reduced without the investments. The regulator needs time to ascertain how best to do this. And we encourage the NCC to continue to regulate the industry in the manner that is a win win win for everyone.”

On his own part, the Chairman, Association of Licensed  Telecommunications Companies of Nigeria (ALTON), Gbenga Adebayo said he will not be right to say price reduction is possible. But,  a study necessitating price reduction is certainly possible. “You know that prices are not fixed. You don’t  just come and say, this is how much you charge for this service. it is based on studies, statistical data  about the state of the market. Cost of providing service, costs of buying, providing  bandwidth and  availability of relevant supporting infrastructure such as fibre and others

The cost of data can not reduced without conducting the relevant stakeholders consultations, you would create more negative impact on the industry, if you do so. So, it is only normal that a study would be conducted, and a review done. It can only be then, that a position can be made on whether the pricing is appropriate or not. If the current price level is appropriate, the Minister will be so advised.  If it require  a few incentives to motivate price reduction, it will be so made.  But, you can’t just say, go and make price reduction without collecting the relevant information.

As an industry, we always campaign that  prices are better left to market forces and regulatory guidance rather than political decisions. And that is where we are. So, I think the NCC has done what is procedural. They have also acted according to the Communications act, that establishes it  because such decision cannot be taken without conducting relevant  studies.

However, he pointed out that the independence of the regulator is very important for the sustainability of industry. He said, “We cannot compromise the independence of the regulator and it is also part of the duties of the minister under the communications act to  ensure, the independence of the regulator. So, I think it is  something that we need to begin to talk about.





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