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Consumers’ Interest Pivotal To Proposed Tariff Hike – Danbatta

The Executive Vice Chairman and Chief Executive Officer (EVC/CEO) of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, has stressed that interest of telecom services consumers be taken into consideration in the proposed tariff review now being canvassed by licensed operators in the industry.

Danbatta,  who gave the assurance while interacting with journalists at the sidelines of the ‘Stakeholder’s Consultative Forum on Emerging Technologies,’ on Thursday in Lagos, pointed out that an increase in the price of telecommunication services is unlikely, at least in the short term, despite the push by telecom operators for tariff hike.

According to him, any review of the current tariff regime would have to go through various stages including stakeholder consultations, cost studies and others before such an exercise can sail through.

The EVC explained that the commission was aware of rising cost of operations and challenge of lack of access to foreign exchange which telecom service providers, like other sectoral players in the economy were going through but that due process needed to be followed in any tariff review in the sector.

He confirmed that the NCC recently received a letter from the Association of Licensed Telecoms Operators of Nigeria (ALTON) which contained the unfavourable working environment telecom operators were facing and their clamour for the review of the tariffs on services by 40 percent.

Danbatta further clarified: “ALTON rightly pointed out the high cost of doing business and in fact gave a figure of 40 per cent but the chairman denied that they indicated any figure. To me, when you say a 40 per cent hike in telecommunication services, you need to indicate which segment of the sector. Is it voice, Internet, data? There are so many segments, broadband services.

“So, it is very difficult to just give a figure as the amount by which you need to see a hike for services across all segments in the telecoms industry.

“It is impossible to do it that way as that would be doing it in a way that doesn’t align with our ACT. We normally increase prices scientifically; we engage the services of consultants in the area of cost-based studies to study each and every segment of the sector to come up with a recommendation as to whether there is a need for an increase in the cost of services from that particular segment or not.

“Even before we come up with a determination of new prices, we carry out a stakeholder consultation. That is the rule-making process in the NCC. Before you impose a new tariff on citizens, you subject the matter to a stakeholder consultation. They must have a say. Consumers deserve to be heard.

“It is through this process that all along we have been doing determinations. Now when you look at the voice sector, there is a cap and a ceiling within which people who provide voice service can charge for the services they are providing. And if they increase a little above what they are charging now, provided it is within, the NCC would say make sure you do this with recourse to approval. No operator should do this unilaterally”, the industry regulator added.

The EVC, however, maintained if the cap became exhausted due to the high cost of doing business, the commission would like to be allowed to do a cost-based study and come up with factual information that will stand the scrutiny of consumers that are been charged for the services.

On ALTON’s complaint about rising cost of diesel and lack of access to forex and how these are impacting negatively on its members’ operations, Danbatta said the commission had discussed the problem with the Minister of Communications and Digital Economy, Prof. Isa Pantami, and that the issues is being looked into by the government.

Specifically, he hinted that the minister would soon take up the matter with the governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, with a view to exploring ways of making forex easily accessible to telecom operators.

He expatiated:  “On the issue of the cost of diesel, everyone is paying for it. No sector is spared, for instance, the aviation sector also pays for the high cost of diesel.

“I believe the government is studying the situation very closely and will come up with a holistic remedial measure that is not restricted only to the telecoms sector because people in the aviation sector provide services to students, even though we can say not every citizen provides aviation services, it is probably elitistic.

“But everyone uses communication services. Farmers make calls and send text messages, so one has to be very careful before tinkering with the cost of telecommunication services as against allowing aviation operators to increase the cost of increasing aviation services”, the EVC stressed.

As a cost-reducing measure, he advised the telecom operators to begin to explore alternate sources of energy to sustain their operations at lower cost.

It would be recalled that ALTON recently sent a letter to the NCC proposing a 40 percent hike in the cost of calls, SMS, and data due to rising cost of doing business in the country.

According to the group, it is time for the tariff floor of calls to increase from N6.4 to N8.95 and the price cap of SMS to increase from N4 to N5.61.

In the letter titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector’, the ALTON canvassed:  “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.”

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