Revisit Suspended Data Price Floor, Stakeholders Urge NCC 

By Emma Okonji

Seven months after suspension of the proposed data price floor by the Nigerian Communications Commission (NCC),  industry stakeholders have called on the telecoms industry regulator to revisit it for the benefit of operators and the subscribers.

The stakeholders, who spoke at a technology forum in Lagos recently, said the need to revisit the suspended price floor became necessary in order to maintain business continuity in the telecoms sector.

The operators were of the view that upward review of data price floor would enhance quality service delivery.

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo said there was need for upward review of the data price floor in order to help telecoms operators remain in business and offer quality and reliable telecoms services to their subscribers.

According to him, “The suspended data price floor should be revisited and the price raised, because there is a limit to which operators can reduce cost of service delivery and still remain in business.”

He expressed the fears that if the data price floor remain low, more operators may go out of business. He said registered telecoms services providers used to be 35 in number but that in recent times, the number has drastically reduced to 14 players, which he said could be a big threat to telecoms growth.

Although majority of the stakeholders said they needed quality service from operators at affordable cost, others insisted on the need for upward review and reintroduction on the suspended data price floor.

The data price floor is a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.

Following the opposition that greeted the directive to introduce price floor for data segment of the telecommunications sector, the NCC, on November 30, 2016, suspended directive, which was supposed to take effect from December 1, 2016,

According to the Director, Public Affairs at NCC, Mr. Tony Ojobo, the decision to suspend the directive was taken after due consultation with industry stakeholders and the general complaints by consumers across the country.
“The commission weighed 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,” Ojobo said.
NCC had written to 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.
According to NCC, 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, and not necessarily to hike price.
The price floor in 2014 was N3.11k/MB but was removed in 2015, and further reintroduced at N0.53k/MB. But even at that, operators were charging different rates. While Etisalat offered N0.94k/MB, Airtel offered  N0.52k/MB, MTN offered N0.45k/MB and Globacom offered N0.21k/MB.

The smaller operators/ new entrants also charged at different rates. Smile Communications charged N0.84k/MB, Spectranet charged N0.58k/MB and NATCOMS, which operates as ntel, charged N0.72k/MB.

Based on the differentials in data price floor among telecoms service providers, NCC decided to introduce a new price floor of   N0.90k/MB, but subscribers opposed to it for the fear that it would increase cost of data services.