Telecom operators in Nigeria – MTN, Airtel, Glo, and others – are planning a 40% hike on calls and SMS tariffs.
The GSM operators have proposed to the National Communications Commission (NCC) for a hike in the tariff following high cost of doing business in the country.
According to the operators, both economic and security challenges bedevil their business operations in Nigeria.
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They revealed this in a letter they titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ which was sighted by our correspondent.
The operators wrote the letter under the aegis, Association of Licensed Telecommunication Operators of Nigeria.”
They addressed the letter to the NCC.
Proposed New Tariff:
MTN, Glo, Airtel and other operators want Nigerians to pay N8.95 as price floor for calls as against the current N6.4 naira.
Similarly, they want Nigerians to now pay a price cap of N5.61 instead of N4 for SMS.
What this means for you:
What it means is that should the NCC grant their wish, you will now begin to pay N8.95 for every one minute of calls that you make.
Also, the operators will charge you N5.61 for every one page SMS (messages) you send to anyone.
Why the tariff hike?
The telecom operators have blamed the reason on the ongoing war between Ukraine and Russia.
Also, they blamed the economic situation in the country, saying the recession Nigeria faced in 2020 affected operators.
According to the operators, the developments have led to scarcity of energy. It said the various crises have increased the cost of providing energy to operate maximally.
They said this had resulted in an increase in energy costs, increasing their operating expenses by 35 per cent.
Also, the operators said the recent excise duty of 5% on telecom services has equally raised the cost of operation.
What they are saying:
“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.
“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.
“In implementing the said recommendations, however, we recommend that the 40 per cent increase in the cost of doing business be factored in to arrive at a cost price per GB in view of the current economic situation.”
The operators also urged NCC to explore and provide other means of penalising operators rather than punitive monetary sanctions.
They said NCC should extend the payment timeline of relevant regulatory levies and fees.
Also, they urged the NCC to urge the Federal Government to sign the executive order declaring telecoms infrastructure as a critical national infrastructure.
This, they said, will mitigate cost they spend in replacing infrastructure and other equipment which vandals damaged or have stolen.
Also, the telcos suggested an upward adjustment of the MTR by 40 per cent.
“For large operators, new interim MTR of N5.46 from N3.90 reflecting 40 per cent increase in the cost of business.
“For small operators, new interim MTR of N6.58 from N4.70 reflecting 40 per cent increase in the cost of business.”
Implications:
Going by the plan, the final consumers will bear the cost which telecom operators bear for running their businesses.
Also, it means you would have to pay additional N2 and some kobos for every one minute of calls.
Equally, you would have to pay additional N1. 61 Kobo for one page of every SMS that you send.
So, if you usually buy N100 call credit to make 5 minutes calls, you won’t anymore.
You will now have to buy more call credit to make such calls.
Similar development results in the sending of SMS too.
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