Telcos Seek Upward Review of Voice Call, SMS, Data Services’ Cost

Emma Okonji

Telecommunication operators under the aegis of the Association of Licenced Telecoms Operators of Nigeria (ALTON), are calling for an increase in the cost  of delivering voice calls, short message services (SMS), and data services. 

They expressed concerns over the negative impact of the economic and security issues in the country on the Nigerian telecommunications industry, which they said had adversely affected the cost of telecoms service delivery across networks. 

Owing to these, they have written the Nigerian Communications Commission (NCC), asking for an upward review in the cost of delivering most telecons services to subscribers. 

The letter dated April 25, 2022, was received and acknowledged by NCC on April 27, 2022. 

In the letter obtained by THISDAY, the telcos said the telecommunication industry had been heavily financially impacted following Nigeria’s economic recession in 2020 and the effect of the ongoing Ukraine/ Russia crisis. 

According to the letter, “This has resulted to an increase in energy costs (which constitutes an appreciable 35 per cent of ALTON’s members operating expenses). “Consequently, the cost of diesel required to power operators’ Towers, Base Stations and offices rose by a staggering 233 per cent from N225 per litre in January 2022 to over N750 per litre in March 2022. “Additionally, the introduction of new lines of fiscal obligations via the recent Excise Duty of 5 per cent on telecommunications services further exacerbates the burden of multiple taxes and levies in the sector. 

“As the Commission may be aware, the Power sector under the supervision of ib Nigerian Electricity Regulatory Commission (NERC) of the Power sector in November 2020 undertook a review of elecfricity tariffs to cater for the economic headwinds reported above.”

The letter further stated:” In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the Commission’s intervention in order to minimize the impact of the challenging economic issues faced by our members.”

In the letter, the telcos also demanded for upward review of the price determination for Voice and Data and SMS. 

They explained: “Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the Mobile (Voice) Termination Rate (MTR) for Voice; Administrative Data floor price and cost of SMS as reflected in extant instruments. With respect to Voice and SMS cost, ALTON respectfully requests the commission to consider a Mark-up approach to address the upward price adjustment desirable for industry.”

They further stated that for data services, “we wish to request that the Commission implements the recommendations in the August 2020 KPMG Report on the Determination of Cost Based Pricing for Wholesale and Retail Broadband Services in Nigeria (Report).”

In addition, they called for the suspension of punitive monetary sanctions and extension of payment timeline of relevant regulatory levies/ fees in compliance with the Commission’s mandate by at least three months from the stipulated date of fulfilment.

They also want the Commission to prevail on the federal government to sign the Executive Order declaring telecommunications infrastructure as a Critical National Infrastructure for due protection of the infrastructure and to mitigate cost expended towards replacing the damaged/ stolen infrastructure and other amenities.

In addition, they called for reduction or waiver of duties, taxes and other charges and suspension or reduction of sector fees and other levies. 

As a way of ameliorating the impact of the tough operating environment, “we respectfully request that the proposed upward review of the Frequency Pricing Regulations and current administraåve fees regime for services such as numbering fees, type approval fees, promotion fees and tariff modificaåon/revalidation fees be suspended,”

“It is our expectation that the above mentioned proposals will support our members and ameliorate the challenging economic situation facing the telecommunications industry,” ALTON added.