On telecoms tariffs, let the Act decide in 2025 

As the year 2024 raced to an indeterminate conclusion, there was some theatre of the absurd playing out in the telecommunications industry. Tariff occupied centre stage. There was a reported tariff hike in the industry which was immediately denied by the Nigerian Communications Commission (NCC), also reportedly.

Just before the final bell could ring on the preceding year, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), released a blistering statement on the state of the telecommunications industry, saying the industry could start service shedding (load shedding for proper understanding, evoking the painful failure of the power sector) if the travails of the sector were not resolved urgently. Quite a handful and so much baloney, if you permit the use of that word.

My humble appeal in the immediate is for the regulator and the operators to stop playing dangerous games with a sector that approximates the possibilities of a nation if properly handled. They are both playing at the precincts of the law. I will explain.

Is tariff review expedient in the telecoms industry in the face of a fickle economy? Many positions have been canvassed. As always, the subscribers don’t want to hear of any increase having been pauperised by some of the polices of this administration. The same policies are making life very difficult for ALTON members who have raised the alarm that telecom service provisioning may grind to a halt. Nigh impossible, you may want to say but nobody wants to hear such a laced threat because telecoms remain the only standout achievement of a limping democracy since 1999.

The regulator takes a position that is understandable. Standing on the pillars of the Nigerian Communications Act 2003, especially in Sections 108 and 109, the regulator says it is backed by the Act to regulate tariffs and such responsibility should therefore not be rocked by those who operate in the industry. It is a cocktail of provisions.

For instance, Section 108 (1) says: Holders of individual licences shall not impose any tariff or charges for the provision of any service until the Commission has approved such tariff rates and charges except as otherwise provided in this Part.

Section 109 would add, “Notwithstanding the provisions of Section 108 of this Act, the Commission may intervene in such manner as it deems appropriate in determining and setting the tariff rates for any non-competitive services provided by a provider mentioned in Section 108 (1) of this Act for good cause or as the public may require.

Further expanding its responsibilities based on the aforementioned Sections of the Act, the regulator in November 2024, released the Guidance on the Simplification of Tariffs in the Nigerian Communications Sector (as Amended).

“The Commission hereby issues this Amended Guidance for the simplification of tariff pans, bundles and promotional activities that include tariffs. This Guidance is designed to enhance transparency, improve consumer understanding and foster fair competition amongst licensees of the Commission,” the regulator stated.

The position and powers of the regulator have never been questioned by any of the industry stakeholders. What the operators are saying, for instance, is that some of the regulations by the Commission are so stale that they have little or no impact on modern business operations that can lead to growth or renewal of the industry.

Plus the letter addressed to the Executive Vice Chairman of the NCC in November 2023, titled: State of the Nigerian Telecommunications Industry – Repositioning the Industry for Sustainable Growth and Development, wherein the operators lamented the dwindling investments and fortunes of the industry, ALTON, at an End-of-Year Dinner with Industry Stakeholders on December 29, 2024, again pressed the panic button that the telecoms industry was under siege.

In the statement titled: Before the Final Call – Telecom – As Sector Under Siege, ALTON chairman, Engr Gbenga Adebayo, warned that “if nothing is done, we might begin to see in the new year grim consequences unfolding, such as Service Shedding; Operators may not be able to provide services in some areas and at some times of the day leaving millions disconnected, there will be significant economic Fallout, because businesses will suffer from lack of connectivity, stalling growth and innovation. There will also be national economic disruption where key sectors like security, commerce, healthcare, and education which rely heavily on telecom infrastructure, will face serious disruptions.”

The dumbest reaction to what one may describe as ALTON’s hysteria is to call it cheap blackmail, because such position obfuscates the real issues ailing the industry at the moment, from forex volatility to escalating cost of service delivering, and even from market hostility to dwindling returns, ALTON has a basketful of mixed fortunes. The members are not in a good place at all and are looking for the best possible way to deliver their predicament to government without causing chaotic response from the economy and investing public.

Quite a few voices, even from the regulatory authority, have told this writer that the industry and the regulator should stop playing games. They validate their position with the explanation that a price regulation was done for the industry a long time again which created a Price Cap of N50 and Price Floor of between N19, after a review over a decade ago which increased the mobile termination rate (MTR). They explain that once a band of between N19 and N50 was created, the operators had the latitude to play within the band, raise and reduce tariff if they like without reverting to the NCC for any approval.

“We don’t set prices. What we do is set a Cap and a Floor. Within the space, the operators can play. There is a tariff regulation since about 2005. You have not reached the Cap, why are you asking for an increase,” an NCC source told this writer.

“Once a Floor and a Ceiling have been put in place, playing wthin the band doesn’t need the approval of the NCC,” another source affirmed.

Perhaps in trying to enjoy this regulatory latitude, the operators in 2022 requested for, and got a 10 percent  tariff increase on Voice and Data services from the NCC. The Commission reversed itself after a few days, saying the priority of the Minister Isa Pantami was to protect the citizens and ensure justice for all stakeholders. An NCC source told this writer that the reversal was unilaterally done by the minister who coerced the regulator to receive the fall.

At the time, NCC lost the voice to proclaim the provisions of the Act in Sections 108 and 109 which have no tolerance for the meddlesomeness of a minister or even the President of the Republic if he wanted to supervene. The operators did not also test the provisions of the Act in the Court.

One operator confessed in trepidation that “it’s already very tough doing business in Nigeria. We don’t want the government to come after use with all its powers.”

Here are a few lessons for me and I think also for the government. Some businesses are already operating in fear in Nigeria in spite of President Tinubu’s effort to attract investors to our dear nation. The source of that fear must be conquered in order to create a conducive business environment. The NCC must abide by the Act and do the needful for the telecoms industry and it’s operators without resorting to puerile emotions about protecting citizens. Afterall, some of the investors in these operations  are also citizens who with their efforts are trying to promote the good of the land.

In the New Year, the regulator must look beyond emotions to do a good job. This is wishing you all a lovely and more peaceful and productive 2025.