Although Nigerians have remained critical of mobile telecomm service providers because of the high tariffs as against the relatively poor quality of service, the Nigerian Communications Commission (NCC), the regulatory agency for the telecoms sector appears to be up to the task in ensuring a downward review of charges on voice calls and other services for users.
Whereas there has been an inflationary trend leading to the upswing of prices in all sectors of the economy, Nigeria’s mobile telephony sector has been a welcome exception as only recently, operators were forced to reduce the cost of the short messaging service (SMS) from about N15.00 (fifteen naira) per SMS to N4.00 (four naira) off-network and N3.00 (three naira) maximum on-network rates.
The industry has witnessed a 30 percent reduction in tariff in the last three years and operators are foreseeing a further reduction in the years ahead in spite of various obstacles. Although much of the tariff drop has been occasioned by aggressive competition among operators, the expansion of their coverage and the need to keep their subscribers who could easily switch allegiance has also been a factor.
In the past, operators had unscrupulously limited and restricted low call rates to promos largely enjoyed by only subscribers within the network. More notorious promos as ‘free night calls’ ring a bell. Such promotional campaigns led to increase in the volume of traffic without any corresponding improvement in the quality of services (QoS) provided by the networks. Indeed, at the height of the promos telephony was all bedlam.
Mr. Wale Goodluck, Corporate Services Executive for MTN, one of the major telecomm service providers, recently told the media in Lagos that there has been a 30 percent reduction in tariffs in the last three years. He noted that this was the only sector where tariffs continued to drop as against the steady rise in prices of commodities in virtually all other sectors of the economy.
To buttress his argument, he claimed that Nigerian subscribers still enjoy lower fees than their counterparts in India and Europe. While explaining that operators in India were consolidating and have increased tariffs in order to remain in business, he said operators in Europe face the same network challenges as obtain in Nigeria; pointing out that the records were all listed on the stock exchange.
The significance of competition in the sector can hardly be overemphasized. For instance, pre-2001, the cost of subscription to MTel’s analogue mobile services was over N60, 000 per line; in 2001, the GSM subscription started with a price of N20, 000 per line and today, this figure has fallen to almost zero. The tariff for calls on the GSM network was as high as N50, 000 per minute, with major operators at the time – MTN, Econet Wireless (now Airtel) and Mtel ruling out the possibility of per second billing. However, the competitive entry of Globacom into the market with a straight-out per second billing system forced the others to review the ‘per minute’ billing policy. Today, a call on any network can be made for lower than N20 per minute, even to some international destinations.
It is obvious that that the combined effect of the three interconnect rate determinations made in 2004, 2006 and 2009 have caused the reduction in mobile call termination rate from about N30 to N18 per minute in 2003; down to N11.40 per minute in 2006. NCC had in 2009 introduced asymmetric interconnect rates regime for the first time of N8.20 per minute and N11.40, and these reductions generally assisted telecom operators to reduce retail call rates.
In all these developments, the role of the NCC in ensuring qualitative and affordable services for Nigerians is quite commendable. Through the NCC’s regulatory intervention, government’s structured investment and current programmes and strategies would put Nigeria on a faster lane to broadband deployment and development.
Though NCC does not set retail prices, the regulator consistently monitors the rates at which the operators offer services to Nigerians, and intervenes when necessary in determining inter-connect rates for the industry when the need arises.
Executive Vice Chairman (EVC) of the NCC, Dr. Eugene Juwah has noted that the contributions from the ICT sector would boost gross domestic product (GDP) growth in the country by 15 percent in 2015.
In his words, “I challenge the operators to lower prices in a very visible way, then NCC can lower the interconnect rate”.
This challenge underlines the Commission’s recognition of its obligation to the people because a one sided reduction of inter-connect rates as advocated by the operators would mean an unfair deal wherein they would smile to the banks – leaving consumers with obviously no benefit from the policy.
Also at the occasion, he observed that in fulfilling the mandate of the NCC by the Nigeria Telecommunications Act (2003), the Commission is providing regulatory intervention to curtail such challenges as quality of service, which is yet to reach the envisaged level of efficiency. “Erratic public power supply, vandalisation of telecom infrastructure, lack of basic infrastructure, high level insecurity, multiple taxation, militancy, all collectively affect expectations from the industry”, he said.
According to Juwah, there has been some regulatory intervention comprising directives to the industry to make certain that stakeholders keep to the rules especially in the spread out of customer care centres and help lines for emergencies.
To underscore the importance of consumers in this sector and the need to ensure that their interest is well considered at all times, the NCC has also put in place a functional Consumer Affairs Bureau.
The bureau specifically ensures that consumers’ interests are adequately protected. To this end, the Commission has held 64 consumer related TCP sessions; 44 Consumer Outreach Programmes and four Consumer Townhall Meeting (CTM) outings.
The TCP which has been recognised by the International telecommunications Union (ITU), is the first of its kind globally and has been an innovative and effective mechanism for resolving consumer complaints.
Notwithstanding these positive developments, majority of subscribers are still clamouring for better service quality as well as a further reduction in voice tariffs.
With Nigeria’s reputation as the largest telecoms market in Africa, it behoves on the Commission to continue insisting on even much lower tariffs because that is an incentive which would drive mobile usage up –boosting the sector’s contribution to the nation’s GDP and giving mobile telecom subscribers satisfaction for their patronage.
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