• Friday, July 19, 2024
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BusinessDay

FG orders MTN, Airtel to reverse 10% hike in data price

The Nigerian government has directed telecommunications operators in the country to immediately reverse the upward price review of internet data.

BusinessDay had earlier in October reported that telcos like MTN and Airtel had adjusted the price of their data bundles by 10 percent in October in response to harsh economic realities in the country.

Many subscribers of the network said they were not informed ahead of time of the adjustment, hence their surprise when in an attempt to purchase data they found the prices have increased. Daily data bundles increased to N550 from N500, N 1000 to N1100, and monthly bundles like N5000 for 20GB rose to N5500.

The Nigerian Communications Commission (NCC), in a statement it released on Wednesday, said the action of the telcos was unilateral.

A spokesperson for Association for Licenced Telecommunication Operators in Nigeria (ALTON) said they cannot comment on the NCC directive.

The commission, however, acknowledged that consideration for 10 percent approval for tariff adjustments for different voice and data packages was in line with the mandates of the NCC as provided by the Nigerian Communications Act, 2003, and other extant regulations and guidelines, as this was within the provisions of the existing price floor and price cap as determined for the industry.

The decision was also taken after a critical and realistic review and analysis of the operational environment and the current business climate in Nigeria, as it affects all sectors of the economy.

“Even though the tariff adjustment was proposed and provisionally approved by the management of NCC, pending the final approval of the board of the commission, in the end, it did not have the approval of the board of the commission. As a result, it is reversed,” the NCC said.

Read also: Consumers squeezed as telcos hike data costs

According to the NCC, the priority of Ali Isa Pantami, minister of communication and digital economy is to protect the citizens and ensure justice for all stakeholders involved. As such, anything that will bring more hardship at this critical time will not be accepted. The data price hike would also derail the broadband target of 70 percent by 2025 the country has set.

Broadband penetration in Nigeria increased by 1.1 million to approximately 85 million in August. While this represents a higher penetration rate of 44.7 percent compared with the 41 percent recorded in the previous year, the penetration rate is still below the 45.9 percent recorded in October 2020.

At 44.7 percent penetration, broadband needs to grow by about 25 percent in three years to achieve the 70 percent target. This means that between 2018 the year Nigerian Communication Commission recorded 31 percent and 2025, broadband needs to grow by at least 6.6 percent every year. However, 4 years after, about 13 percent has been achieved which is an average of 3.25 percent in a year.

The NCC said the minister obtained the approval of President Muhammadu Buhari for the suspension of the proposed 5 percent excise duty, in order to maintain a conducive enabling environment for the telecom operators. Much as there is an increase in the cost of production, the provision of telecom services is still very profitable and it is necessary that the subscribers are not subjected to a hike in charges.

“In view of the above, the commission, through a letter sent on October 12, 2022, has already directed the affected Mobile Network Operators (MNOs) to reverse the upward tariff adjustment. The commission will carry out further consultations with all industry stakeholders on the best approaches that will protect and uphold the interest of both the consumers and the service providers,” the NCC said.