MTN, Airtel  Hike in Data Tariffs Unsettles Subscribers

FINANCE

Last week, MTN and Airtel stunned their subscribers with a silent upward review of the cost of their data services, a development industry stakeholders fear may not only trigger similar actions by other telecom firms, but could also compel subscribers to port to other operators with affordable tariff,  Emma Okonji reports

Telecoms subscribers to MTN and Airtel, woke up last week to experience a sudden increase in their data plan, without prior notice from the telecoms operators, and not even from the telecoms industry regulator that is supposed to protect consumers as it had always done, since the rollout of Global System for Mobile communication (GSM) in 2001. 

Disturbed by the development, subscribers are calling on the industry regulator, the Nigerian Communications Commission (NCC) to prevail on MTN and Airtel to reverse their data tariff to the status quo, insisting that the hike will further add to the economic hardship currently being faced by Nigerians and telecom subscribers. 

Some subscribers who spoke to THISDAY, expressed fears that other operators like Globacom, 9mobile, Smile, including Spectranet and other Internet Service Providers (ISPs), might follow suit to also increase their data tariff plan if the issues around the hike were not addressed. 

Data Hike  

Last week, subscribers to MTN and Airtel suddenly noticed an increase in tariff in their data plan, without getting prior information regarding the data price increase. Airtel for instance, increased its monthly bundle for data plan to: N1,100 for 1.5GB monthly data; N1,200 for 2GB monthly data; N1,500 for 3GB monthly data; N2,200 for 4.5GB monthly data; N2,500 for 6GB monthly data; N3,300 for 10GB monthly data; N4,400 for 11GB monthly data; N5,500 for 20GB monthly data. 

MTN also increased its monthly bundle for data plan to: N1,100 for 1.5GB monthly data; N1,200 for 2GB monthly data; N1,500 for 3GB monthly data; N2,200 for 4.5GB monthly data; N2,500 for 6GB monthly data; N3,500 for 12GB; N5,500 for 20GB monthly data; N6,000 for 25GB monthly data. Although the new rates are slightly different from the former rates, with about a 10% increase, some subscribers to both MTN and Airtel told THISDAY that they were not happy because neither the operators nor the regulator informed them about the hike during the planning stage and that the timing was wrong, owing to the difficult economic hardship that Nigerians are currently facing.      

NCC’s Role  

President of the National Association of Telecoms Subscribers (NATCOM), Chief  Deolu Ogunbanjo, who spoke to THISDAY about the hike in data tariff, said MTN and Airtel couldn’t increase the cost of data, without first seeking the approval of NCC. He, however, said the price cap for voice calls had been fixed between N20 and N50 per minute call since 2001, and that the current hike in data tariff did not exceed the price cap for data that was fixed since 2001, which he explained, could be the reason why NCC has not reacted to the hike in data tariff.  

Asked what would be the next step for subscribers, Ogunbanjo said since NCC has not reacted to the contrary, they would rather live by it without agitation of any sort. He, however, advised other telecoms operators, including ISPs not to increase their data tariff. 

The NATCOM president explained that any operator that did not increase the cost of data, would likely experience a surge in their subscriber’s number, because many subscribers will port to their networks, in search of affordable data plans.   

Another subscriber who gave his name as Philip Emordi, warned against the hike, saying it is unjust to increase the cost of data at a time when subscribers were expecting a further downward review of the cost of telecoms service offerings across networks. He said telecoms operators had long been pushing to increase the cost of service delivery and urged NCC to resist such a move.

 Chairman, of the Association of Licensed Telecom Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, told THISDAY in a telephone conversation that he wouldn’t know if the hike in data tariff cuts across all the subscription plans, and promised to get more details about the hike before he could make any comment about the increase.

THISDAY also spoke with the Director of Public Affairs at NCC, Mr. Reuben Muoka, who said he would find out if the increase was within the approved price cap and price floor limit for data tariff.   

Different Data Plans  

THISDAY investigation shows that MTN Nigeria has different data plans for subscribers, which range from daily plans to weekly plans to monthly plans. For example, MTN has a daily plan that is as low as N50 for 24 hours, N60 for 50MB data for 24 hours, N100 for 100MB data for 24 hours, and N300 for 1GB data for 24 hours.

For customers to get data plans from MTN on a super-fast 4G+ network, they could simply select from the rich bouquet of flexible data bundles for their mobile and MiFi devices, or dial the data code *131# to activate any internet plan of their choice.   

Airtel has a daily data plan of N50 for 40MB data, N100 for 100 MB data, N300 for 350MB data, N500 for 1GB data and N1,500 for 6GB data. For the monthly data plan, Airtel used to have N1,000 for 1.5GB data but has increased it to N1,100 for 1.5GB monthly data. The increase by Airtel and MTN in data tariff is a 10%, which does not cut across all data plans of both network operators.   

For Airtel, all of its monthly plans offer an additional 4 GB for YouTube night streaming except for the N1,000 plan that offers 2 GB. Airtel customers are welcome to choose among any of the offers that are valid for 30 days. 

NCC’s Resistance to Initial 40% Planned Hike  

Although NCC has been quiet over the recent increase in data tariff by MTN and Airtel, the commission had over time, resisted the planned hike in the cost of services, as proposed by operators. 

Telecoms operators, through its umbrella body, ALTON, had in April this year, called for an increase in the cost of delivering voice calls, short message services (SMS), and data services by 40%. 

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

To drive home their points, they wrote a letter to the NCC in April this year, asking for an upward review of the cost of delivering most telecom services to subscribers. 

The operators (Telcos) made their intention for an upward review known to NCC in a letter dated April 25, 2022, which was received and acknowledged by NCC on April 27, 2022.

 Planned 5% Excise Duty on  Operations  

The federal government, through the Federal Ministry of Finance, Budget and National Planning, also made a move to introduce a 5% excise duty on telecom operations, a development that was vehemently opposed by NCC, the Federal Ministry of Communications and Digital Economy, as well as telecoms subscribers. 

NCC’s resistance, in collaboration with the ministry and subscribers, forced the federal government to rescind its earlier decision to introduce the planned 5% excise duty on operations.

If allowed, the 5% excise duty would have been an additional tax to the 7.5% tax that telecom operators pay for Value Added Tax (VAT), among other imposed taxes on operations, which tickles down as a burden to telecom operators who bear the brunt of the imposed taxes.

The Federal Ministry of Finance, Budget and National Planning had in August this year, notified the telecoms sector of the intention of the federal government to introduce a 5% excise duty on  operations, in addition to the 7.5% VAT that all sectors of the economy pay for goods and services rendered.

In the notice, the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, disclosed that government would begin the implementation of a 5% excise duty tax on all voice calls, SMS and data services, adding that the 5% excise duty has been in the Finance Act 2020 but has never been implemented.

Disturbed by the development, the Minister of Communication and Digital Economy, Dr. Isa Ibrahim Pantami, resisted the move and described it as unjust, a move that led to the suspension of the 5% excise duty on telecoms operations.

After the suspension, Pantami said it was directed by President Muhammadu Buhari, following his petition as the Chairman of the Presidential Council on Digital Economy and eGovernment, insisting that the policy has the potential to impact very negatively on the digital economy sector, and particularly, telecommunication, which is already overburdened with a plethora of taxes totalling about 41 categories. 

So if NCC has been proactive in protecting telecoms consumers from arbitrary hikes in the cost of  service delivery in the past, it is expected of NCC not to rest on its oars, but to also rise against the current hike in data tariff by MTN and Airtel.