Last year in December, the Nigeria Communications Commission (NCC), intervened with an interim price floor for data services to avert a looming price war in the telecommunications sector. The explanation of the NCC also came from even the Minister of Communications, Mr. Adebayo Shittu, who asked Nigerians to face reality.
The regulatory commission said that it feared that the price war could eventually lead to a monopoly in the telecom industry that would force small operators to shut down.
It said that monopoly in the telecom sector could also push the country back to the days of NITEL to the detriment of small operators in the sector.
Recently, Umar Garba Danbatta, Executive Vice Chairman of the Nigeria Communications Commission (NCC), said the organisation has completed its cost-based research and is set to revise the price floor for data in Nigeria.
In November 2016, the Commission suspended the data segment price floor following a widespread backlash to its attempt to increase the minimum cost of data.
The Commission then urged operators and other stakeholders to maintain the status quo pending the completion of a market survey.
According to the NCC, the price floor is not an increase in price but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators.
“NCC does not fix prices but provides regulatory guidelines to protect the consumers, deepen investments and safeguard the industry from imminent collapse,” the Commission stated.
Before the suspended price floor of NGN0.90/MB, the industry average for dominant operators (including MTN Nigeria Communications Limited, Etisalat and Airtel Nigeria Limited) was NGN0.53/MB.
Etisalat offered (NGN0.94/MB), Airtel (NGN0.52/MB), MTN (NGN0.45/MB) and Globacom (NGN0.21/MB). Smile Communications – NGN0.84/MB, Spectranet – NGN0.58/MB and NATCOMS (NTEL) – NGN0.72/MB.
Speaking in Abuja yesterday, Danbatta said the Commission has observed a significant increase in data usage across the country necessitating the need for an affordable and acceptable data price floor.
He added that the action would help in averting a price war in the data sub-segment of the telecommunications industry. “We have noticed that the level of data usage is growing. This attests to the earlier assertion by the NCC that data is going to be the next frontier. You recall that NCC attempted to do the interim price floor for data in order to ensure that we do not have a price war in the data sub-segment of the industry. This of course met with resistance from the consumers; and because the NCC is a listening agency, we suspended the interim price floor.”
He added that the Commission is considering several temporary measures to improve quality of data services, including the provision of palliatives to smaller operators with just 7.5% of the market share.
3 Comments
True true, the data price should be reviewed. The data price is killing oo. I spend much on data. Thanks admin for the update.
Last year, Mr. Shittu was saying the data price should be increased in other to save new entrants like Intel. There was a national uproar over this and the so-called price floor regulation was suspended. I hope this is not an attempt to increase the data price by all means. They should not make things more difficult than it already is.
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