Wednesday, October 19, 2011

NCC trades tariff reduction with interconnect fee


Tariff reduction and Quality of Service (QoS) topped discussions at the 8th anniversary of the Telecoms Consumer Parliament and the celebration of the decade of Telecom Revolution in the country.

Speaking at the event, the Executive Vice Chairman, Nigerian Communications Commission (NCC) Dr. Eugene Juwah, challenged telecommunications operators in the country to reduce tariffs in a significant way with a promise to reduce the interconnection fee in the sector.

“I challenge the operators to lower prices in a very visible way, then NCC can lower the interconnect rate,” he said.

Juwah explained his position, saying that it would unfair deal for the Commission to reduce the rate of interconnection, while the operators’ smiles to the banks, thereby leaving the Nigerian telecom consumers with obviously nothing to take home from the reduction.

He said that NCC is ready and keen in ensuring that prices come down with respect to the call tariffs, but insisted that it must be significant and not through promo affiliations as currently being done by most operators.

Equally, he said that despite the progress made in the past eight years of telecom consumer parliament and a decade of telecom revolution, there are some challenges.

He observed that in fulfilling the mandate to NCC by the Telecoms Act, the Commission has ensured that Nigerians have access to telephone services at affordable prices and with the best quality possible.

The good news, he said, is that the Commission is providing regulatory intervention to curtail such challenges, just as he outlined some of key challenges to include quality of service, which Juwah noted has not reached the envisaged level of efficiency.

“Erratic public power supply, vandalisation of telecom infrastructure, lack of basic infrastructure, high level insecurity, multiple taxation, militancy, all collectively affect expectations from the industry,” he said.

As said by Juwah, there have some regulatory intervention comprising directions to the industry to make certain that stakeholders keep to the rules, through provision of numerous guidelines on different services provided by service providers, especially in the spread out of customer care centres and thresh hold of help lines by service providers to name a few.

The importance of consumers in this sector and in order to ensure that their interest is well considered at all times, he said, led to creation of the Consumer Affairs Bureau, which today is led by a director, Mrs. Mary Uduma.

“This specifically ensures that consumers’ interests are adequately protected” he said, adding that till date, NCC has held 64 consumer related TCP sessions; 44 Consumer Outreach Programmes and 4 Consumer Townhall Meeting (CTM) outings.

Also speaking in a key note to the occasion, former EVC, NCC, Dr. Ernest Ndukwe, pointed out that by opening up the telecommunications market to competition in all segments of the industry has resulted in major drop in prices for telecommunications services.

He recalled that pre-2001, the cost of subscription to MTel’s analogue mobile services was over N60,000 per line, adding that in 2001, the GSM subscription started with a price of N20,000 per line and today, this figure has fallen to almost zero.

“The tariff for calls on the GSM network was as high as N50,000 per minute. Today, a call on any network can be made for lower than N20 per minute, even to some international destinations,” he said.

Ndukwe noted that though NCC does not set retail prices, the regulator consistently monitors the prices of which the operators offer their services to the Nigerian public, and intervene when necessary in determining interconnect rates for the industry, mostly when the need arises.

He said that the combined effect of the three interconnect rate determinations made in the last decade; namely in 2004, 2006 and 2009 have shown  reduction in mobile call termination rate from about N30 to N18 per minute in 2003; down to N11.40 per minute in 2006.

According to him, NCC had in 2009 introduced asymmetric interconnect rates regime for the first time of N8.20 per minute and N11.40, stressing that these reductions, have generally assisted telecom operators to reduce retail tariffs for calls.

Ndukwe said that within the past eight years of Telecom Consumer Parliament (TCP), that NCC has been fully engaged in its regulatory responsibility for the protection of the consumers, thus becoming very active and innovative in its effort to inform, educate and protect the consumers of telecommunications services in the country.

By introducing an initiative such as the TCP, he said, NCC has established the first of its kind globally, which was acknowledged by the International Telecommunication Union (ITU), describing it as an innovative and effective mechanism for resolving the consumer complaints.

Severally in the past, he said, NCC had stopped service providers from engaging in promotional campaigns that led to increase in the volume of traffic until such a time as there were substantial improvements in the Quality of Services (QoS) provided by the networks.

“NCC had also directed that service providers were not to place any restrictions or time limitation on validity of airtime credits so that subscribers were not compelled to utilize their call minutes within restricted time frames,” he said.

Remmy Nweke:

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