DATA PRICE HIKE: Nigerians can’t escape the inevitable -Minister Shittu

The Nigeria Communications Commission (NCC), on Tuesday, said it acted with a temporal price floor for data services to avert a looming price war in the telecommunications sector.

The Minister of Communications, Mr. Adebayo Shittu, has asked Nigerians to brace up and face reality over the need to effect a hike in the price of data services in the country.

The Minister said that reality meant that telecom service providers were operating under unfriendly business environment including lack of electricity and increasing security challenges.

He spoke when he appeared before the Senate Committee on Communications on Tuesday.

The Committee was mandated by the Senate last week to investigate the proposed hike in the price of data tariff said to have been ordered by the NCC.

Vice Chairman of the Committee, Senator Solomon Adeola, who presided, noted that there was a public outcry over the proposed data price increase.

Adeola said Nigerians were united in their opposition that the proposed increase in the price of data should be stopped. He said that the position of Nigerians was that the idea of hike in data price was ill- advised especially with the biting economic situation in the country.

But Shittu noted: “This is one area that I believe that we all must face the reality. The government in its wisdom and I am happy the National Assembly promulgated the National Communications Act which required that there be established an NCC.

“If you look at the NCC law, it is positioned to reflect experiences, expertise and all of that and I want to believe that there must not be too many interventions in the activities of the NCC.

“I am a political office holder, I am not an expert, so I cannot venture to say whether they did wrong or right except they say that the constitution has granted them the role of a supervisor of a direct regulatory authorities particularly relating to the activities in the telecoms industry.

“The only area I feel they were deficient was in the area of communicating with the people of this country particularly because of the sensitivity that has been imposed on Nigerians by the harsh economic situation.

“I know that if you want to make omelet you must break eggs. Unfortunately in this country, we fail to appreciate the transformation role that ICT has brought about in the lives of Nigerians.

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“I keep saying this and I have no apology in saying this before 1999, GSM lines in Nigeria were less than 500,000. Today, we have a well over N152 million lines. All the hustles that Nigerians were going through before the exponential development of ICT are no more with us.

“It is also important to say that operators in Nigeria are operating on a very harsh situation which is not known in other advanced countries. For instance over the years, the Nigerian state has not succeeded in fixing electricity over the last 20 years.

“This industry reliance on electricity and that because Nigerians have failed in providing reliable electricity, it means they have to rely on extra budgetary provisions to provide electricity 24 hours, seven days of the week which additional expenditure does not operate in other countries which we seek to copy. This is one challenge that we must look at.

“The other challenges in the area of security, a lot of infrastructure by operators are usually under coma by criminals all across the country. Indeed we know what the security situation is in the country. Apart from that we also have the problem of taxes which they have always been talking about. I have always challenged operators that I want to see all the taxes so that we find a way of harmonising them.

“What I am saying is this, if Nigeria has invited international investors to come and invest in Nigeria so that our lives will be better, so that the economy will be better, so that businesses can be more conveniently made, so that even government can run more conveniently, to whom much is given, much is expected.

“The Nigerian state must also be in a position to provide its own share to make an enabling environment operate properly. So, I am not supporting at this stage or not supporting the price increase with regards to the floor. But what I am saying is, these are technical issues whose decision must be taken having regard on all the factors that are important before a decision can be taken.

“We certainly must not encourage a situation in this country where people who have brought their investment to make our lives better, to make businesses better are left to operate in an environment which is not conducive which may even frustrate them out of the Nigerian market.

“I am appealing to the distinguished senate in intervening, they should try to encourage NCC to be the best that it can, they should try to assist us (NCC) in the area of holding the balance between the interest of operators and the interest of the Nigerian masses so that we can be seen to be providing the best.

The NCC on its part claimed that it feared that the price war could eventually lead to a monopoly in the industry that would force small operators out of business.

It said that monopoly in the telecommunications sector could also push the country back to the days of NITEL to the detriment of small operators in the sector.

The Executive Vice Chairman of NCC, Professor Umar Dambatta who also spoke when he appeared before the Senate Committee said that the intervention of the NCC was not designed to undermine the consumers.

He noted that if cheap prices were introduced, they may end up undermining the telecom service operators.

He said that if the situation arose where the operators could no longer cope, the consequences could be better imagined. Prof. Dambatta also said that the need to avert crisis in the telecom industry informed their decision to introduce interim price floor for data services at N0.90k per BM.

He said: “ We wanted to protect the Nigerian consumer from unhealthy price war in what may lead to a monopoly that may lead us to the days of NITEL. We did not increase any price but merely provided a regulatory standard to protect small telecom operators.”

He said that the N0.90k price floor for purchase of data was a benchmark below which no operator could sell.

Dambatta added: “We stepped in when we noticed price war in the sector. The price war was already reaching undesirable level that we had to step in to prevent a monopoly like the days of NITEL.”

The interim floor price, he said, has been suspended temporarily to allow for further consultations. Dambatta said that NCC would conduct extensive research to come up with a price floor that would be acceptable to Nigerians.

Also, the MTN CEO, Mr. Ferdinand Moolman, who was also at the hearing said that the industry had been operating without data floor since 2015.

Moolman noted that instead of price floor prices dropped.

 

 

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