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Wednesday, November 30, 2016

Why NCC bowed to Senate, suspends directive on data segment price floor

Some reasons have been adduced as to why the telecom regulator, the Nigerian Communications Commission (NCC) has to bow to the concerns raised by the Senate of the Federal Republic to suspend directive on data segment price floor, reports ITRealms.

The Director, Public Affairs at NCC, Mr. Tony Ojobo, explained to ITRealms why the reversal became necessary, insisting that the regulator never aligned with the Mobile Network Operators against the telecom consumers in the country.

This, he said, follows the concerns that visited the directive to introduce price floor for data segment of the telecommunications sector beginning from December 1, 2016, NCC has suspended any further action in that direction.

According to him, the decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by consumers nationwide, which included at the floor of the Red Chambers of the National Assembly today, Wednesday, November 30, 2016.

The Commission, Ojobo said, has considered all of this and consequently asked all operators to maintain the status quo until the conclusion of study to determine retail prices for broadband and data services in Nigeria.

ITRealms recalls that the Commission had written the Mobile Network Operators (MNOs) on November 1, 2016 on the determination of an interim price floor for data services after the stakeholder’s consultative meeting of October 19, 2016.

Ojobo also said that 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, which are contrary to speculations making a round since Tuesday.

Further, NCC explained that 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.

“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,” he pointed out.

The price floor, Ojobo said, 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.

Ojobo noted that this statement clarifies the insinuation in some quarters that the regulator has fixed prices for data services, stressing that 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.

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).

The smaller operators cum new entrants, Ojobo explained, charged as follows: Smile Communications N0.84k/MB, Spectranet N0.58k/MB and NATCOMS (NTEL) N0.72k/MB.

He insisted that NCC as a responsive agency of government takes into consideration the feelings of the consumers and so decided to suspend the new price floor.


Meanwhile in the Senate today when the matter came up, the Senators condemned the attempt and directed NCC to immediately stop the proposed data tariff increase until due process is followed and stakeholders carried along.

Chuks Egbune/GEE
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