A total price increment appears imminent in the telecommunication sector according to feelers from insiders in the system.
The telecom subscribers in the country will pay more for telecom services if the industry regulator accedes to telecom operators’ demand for 100% increase in prices of data and voice calls, Daily Trust has learnt.
Several sources within the Nigerian Communications Commission (NCC) and from within the industry have told our reporter of the fresh move to review call and data tariffs upward by about 100 per cent.
An NCC official, who spoke to a reporter on condition of anonymity because he has not been cleared to speak on the matter, said telecom operators had been making a case for price increment since the first quarter of this year.
He said they complained of rising cost of production and that they could no longer carry on with current call and data prices.
“The costs of expanding capacity and their networks have increased with the devaluation of the Naira against the US Dollars, and most consumers now spend less on telecommunication services, especially voice calls, compared to previous years,” another official at the NCC said.
Experts said due to rapidly declining average revenue per user for voice calls, which since 2004 has decreased from just over $15 per month per subscriber to a new low of $4 due to the current economic crisis, telcos have been finding it increasingly difficult to make ends meet.
In the last 10 years, a drastic reduction had been recorded in call and data tariffs. On-Net and Off-Net per minute tariffs which now stand at N12.01k and N12.64 respectively used to be N24 and N75.30k.
An industry source said if the NCC accedes to the telcos’ demand, subscribers will now pay close to N24 per minute and about N2,000 for one gigabyte of data per month, from N1000 currently being charged by most operators.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) had complained of decreasing revenue of its members due to increasing operating cost and intrusion of Over The Top services.
ALTON’s Chairman Engr Gbenga Adebayo said increasing usage of Over The Top (OTT) services by customers was adversely impacting on traditional telecoms platforms.
He quoted Ovum, the independent analyst and consultancy, as saying the growing adoption of OTT services by customers instead of traditional telecoms services will occasion global revenue loss of $386 billion over a period of six years (2012 – 2018) for the traditional telecom operators, thus endangering network development.
In Nigeria, investigations showed that voice minutes have been declining due to the impact of OTT. Engr Adebayo confirmed that the core voice and SMS revenues were decreasing continuously due to impact of OTT players who offer voice, video and messaging services free of charge to their users.
The increasing adoption of OTT applications by telecom subscribers is also negatively impacting on incoming international traffic as well as SMS at huge cost to the telcos but generating revenue to OTT, he added.
On the other hand, the National Association of Telecommunications Subscribers (NATCOMS) has advised NCC not to review the rates for voice and data services upward.
NATCOM’s President, Chief Deolu Ogunbanjo, said the review of the rates was not necessary, with the present economic situation of the country.
“I don’t think this is the right time to do any upward review. Government and its agencies, and the operators should be sensitive to the plight of the people.
“’They should understand that we are just coming out of recession and subscribers shouldn’t be confronted with this again,’’ Ogunbanjo said.
He said that instead of reviewing the rates upward, the regulatory body and the operators should rather consider a downward review.