CEM REPORT | Reactions of despair from subscribers have continued to trail the proposed 40% hike in calls and SMS tariffs by telecommunications operators.
Amidst rising cost of basic necessities and the unstable economy, telecommunications operators in Nigeria under the auspices of Association of Licensed Telecommunication Operators of Nigeria (ALTON), have written to the Nigerian Communications Commission (NCC) proposing a 40% hike in calls and SMS tariffs.
Subscribers see this hike in tariff as an aggravation of already tough economic conditions they struggle to cope with.
A vendor who also operates online told CEM reporter that NCC shouldn’t grant the approval but rather task them on service delivery, she further stated that cost of doing business is high for everyone but a 40% increase was too high for users to bare
“Doing business is hard for all of us but 40% is outrageous for the unreliable service provided. The rate data runs is terrible, one giga byte (1gb) for a week will be exhausted within a day yet sales to recover cost is not made. NCC better not approve.” BU’s World said.
A working class resident at Isolo said; “It is absurd and shouldn’t be encouraged. The only thing giving people joy is the internet if you take that away by increasing price anything can happen. Besides salaries and allowances are not been increased but yet we have to work with airtime and data. I subscribe everyday to meet customers demand yet it isn’t enough. They shouldn’t add to our starvation.” Ruth cried.
An online entrepreneur who was shocked on hearing the report said
“Our present survival depends on the internet – data. Everything happens in that space, if data which is currently not very affordable becomes more unaffordable business and struggling entrepreneurs will fizzle out. Web design, content creation and the likes will charge more or reject jobs meaning more hunger and crime” Precious stated.
An anonymous person said
“I have no take on this because already, the economy has been conditioned by the failures in government for this to happen. Every aspect of the economy is on that trajectory.”
ALTON, Head of Operations, Mr. Gbolahan Awonuga, who confirmed the letter written to NCC said the letter was submitted to NCC last week and the commission’s response is still being expected. Nairametrics report.
The association through the letter said an upward review in tariff was necessary due to high cost of doing business occasioned by the pandemic in 2020 which pulled the country’s economy into recession, along side the ongoing Russia-Ukrian war resulting to high cost of energy needed to run business.
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The letter further explained that cost of business rose by 35% due to the above mentioned reasons and the recent 5% increase in excise duties slammed by the federal government on telecommunications operators resulting to 40% increase in operational cost.
“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,”
“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.”
Upon approval by the NCC, telecos will charge N8. 95 per second from N6.4 current cost for voice calls while short message services (SMS) will transit from N4. 00 to N5. 61.
For data the body is proposing a cost-base pricing.
“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 letter further stated that it won’t be the first private sector to increase tariff as it sight the power sector.
“As the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission, NERC, in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds.
