Hardship Imminent For Telecom Subscribers In Nigeria

Hardship Imminent For Telecom Subscribers In Nigeria

  • MTN, Glo, Airtel Propose 40% Increase In Cost Of Calls, SMS, Data
  • Cite Rising Cost Of Doing Business

Nigerians are poised to be subjected to more hardship as Telecommunication providers in Nigeria are getting set to increase their prices.

The Matrix gathered that MTN, Glo, Airtel, and other telecommunication companies in Nigeria on Wednesday proposed a 40 percent increase in the cost of calls, SMS, and data to the Nigerian Communications Commission NCC due to the rising cost of running a business in the nation.

The price floor of calls is expected to increase from N6.4 to N8.95 while the price cap of SMS will increase from N4 to N5.61 based on their proposal.

This was disclosed in a letter titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector.’

The letter was written by the telecommunications companies under the aegis of the Association of Licensed Telecommunication Operators of Nigeria (ALTON) to the NCC.

In the letter, the telecom companies said there had been a 40 percent increase in the cost of doing business in the country.

According to them, the telecommunication industry has been financially impacted following the nation’s economic recession in 2020 and the effect of the ongoing Ukraine/Russia crisis. They said this had resulted in an increase in energy costs, increasing their operating expenses by 35 percent.

They added that the introduction of the recent excise duty of five percent on telecom services had further increased the burden of multiple taxes and levies on the industry.

The letter read in part, “As the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission of the power sector in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds reported above.

“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 minimise the impact of the challenging economic issues faced by our members. Details are hereunder:

“Upward review of the price determination for voice and data and SMS. Given the state of the economy and the circa 40 percent increase in the cost of doing business, we wish to request an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.

“With respect to voice an SMS cost, ALTON respectfully requests the commission to consider a mark-up approach to address the upward price adjustment desirable for the industry. We have enclosed herein and marked as ‘Annexure 1’our proposal in that regard.

“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 service in Nigeria. Excerpts from the report, are attached and marked ‘Annexure 2’ to provide a further illustration.

“In implementing the said recommendations, however, we recommend that the 40 per cent increase in the cost of doing business be factored in to arrive at a cost price per GB in view of the current economic situation.”

The umbrella body for telecom companies including MTN, Glo, Airtel, and 9Mobilie while proposing the increase in calls and data rates, added that to further help telcos during this economic crisis, the commission should explore and provide other means of penalising operators rather than punitive monetary sanctions; extend the payment timeline of relevant regulatory levies and fees; prevail on the Federal Government to sign the executive order declaring telecoms infrastructure as a critical national infrastructure to mitigate cost spent replacing damaged and stolen infrastructures, among other things.

The body also requested an upward adjustment of the MTR by 40 percent.

It said, “For large operators, new interim MTR of N5.46 from N3.90 reflecting 40 percent increase in the cost of business.

“For small operators, new interim MTR of N6.58 from N4.70 reflecting 40 percent increase in the cost of business.”

This development is coming on the heels of a similar hike in the prices of bouquets offered by Pay TV company, Multichoice, owners of DSTV, GOTV.

The firm increased the prices of all its bouquet from April 1, 2022. Subscribers that were paying N18,400 for the Premium package on DSTV now pay N21,000.

Compact Plus which cost N12,400 before will now go for N14,250, while Compact will cost N9,000 instead of N7,900.

The firm blamed “rising costs of inflation and business operations” for the increase which also affects GOTV packages.

“The price adjustments will enable us serve our customers better, offering them MORE CHOICE and GREAT VALUE all the time,” Multichoice said.

“We remain committed to making the best content from around the world accessible at varying price points to cater to the needs of individuals and families across the country.”

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