Due to Nigeria’s current economic crisis, telecommunication (telecoms) providers in the country are considering raising the cost of calls, SMS, and data by 40%.
A letter from the telecoms to the Nigerian Communications Commission called “Impact of the Economic and Security Issues on the Telecommunications Sector” said that they were going to do this.
The telecoms cited the increased cost of doing business in the country as their justification for the new tariffs.
If significant stakeholders agree, the maximum call fee of N6.4 will climb to N8.95, while the SMS price cap will jump from N4 to N5.61, according to Naija News.
Telecoms, represented by the Association of Licensed Telecommunication Operators of Nigeria, wrote to the NCC, claiming that the industry has been financially harmed as a result of the country’s economic slump in 2020, as well as the current Ukraine/Russia situation.
They claimed that as a result of the increase in energy costs, their operational expenses increased by 35%.
It went on to say that the recent introduction of a 5% excise charge on telecom services had added to the industry’s burden of many taxes and levies.
“As the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission of the power sector in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds reported above,“ the letter said.
“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. Details are hereunder:
“Upward review of the price determination for voice and data and SMS. Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.
“With respect to voice an SMS cost, ALTON respectfully requests the commission to consider a mark-up approach to address the upward price adjustment desirable for the industry. We have enclosed herein and marked as ‘Annexure 1’our proposal in that regard.
“For data services, we wish to request that the commission implements the recommendations in the August 2020 KPMG report on the determination of cost-based pricing for wholesale and retail broadband service in Nigeria. Excerpts from the report, are attached and marked ‘Annexure 2’ to provide a further illustration.“
The telecoms reiterated that, in order to weather the current economic storm, the commission should explore and provide other means of punishing operators other than punitive monetary sanctions; extend the payment timeline for relevant regulatory levies and fees; and persuade the Federal Government to sign an executive order designating telecom infrastructure as a critical national infrastructure to reduce costs spent on replacing damaged and stolen infrastructure, among other things.
They also demanded a 40% rise in the MTR, stating that “for large operators, the new interim MTR of N5.46 from N3.90 reflecting 40% increase in business costs.”
“For small operators, new interim MTR of N6.58 from N4.70 reflecting 40 per cent increase in the cost of business.”