Indications has emerge that telecommunications operators, telcos in the country are planning to jerk up voice calls and data tariffs by as much as 40 per cent. Several sources from operators said that impending raise tariffs was due to high cost of diesel to operate their businesses, incessant harassment and frivolous taxes and levies imposed on them by all manner of agencies from the three tiers of government. The telcos who spoke to Vanguard on the issue, said the development, is being handled by their umbrella body, the Association of Licensed Telecom Operators of Nigeria, ALTON. It further gathered that ALTON has already sent a letter to the Nigerian Communications Commission, NCC, seeking the upward review of tariffs by 40 percent. If approved, the services that will be affected include voice calls, short message services, SMS, and data services.
The telcos want the N6.4 per second current cost of voice calls jerked up to N8. 95 while short message services will move from N4. 00 to N5. 61. ALTON’s letter to NCC highlighted a few operational issues which the regulator should consider to approve the request. They include rising cost of business operation due to high cost of diesel, and other energy sources, recent introduction of excise duty of five per cent on telecom services, and increased burden of multiple taxes and levies on the industry. The telcos say these increments, jerk their operating expenses by over 35 per cent.
Part of the letter reads “as the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds. “In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the commission’s intervention to minimise the impact of the challenging economic issues faced by our members. Details are 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 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 and 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 ‘Annexure1’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 group also highlighted other demands to the commission such as to explore other penalties for operators other than punitive monetary sanctions, extend the payment timeline of relevant regulatory levies and fees, prevail on the federal government to sign the executive order declaring telecoms infrastructure as a critical national infrastructure to mitigate cost spent replacing damaged and stolen infrastructures, among others. It added that the Mobile (Voice) Termination Rate (MTR) for voice, administrative data floor price and cost of SMS as reflected in extant instruments should also be increased. The ALTON letter added: “For large operators, a new interim MTR of N5.46 from N3.90 reflecting 40 per cent increase in the cost of business. “For small operators, the new interim MTR of N6.58 from N4.70 reflects a 40 per cent increase in the cost of business.”
A reliable source and senior official of ALTON who also confirmed the letter said “although we did not intend that this will be a media issue, I can confirm to you that we sent a letter to the NCC requesting upward review of tariffs. But this shouldn’t come to you as a surprise. We have always intimated that this is the only way to go, considering prevailing circumstances. It will be recalled that while approaching the federal government to intervene on indiscriminate clamp down on our facilities, particularly the recent one in Kogi over frivolous taxes and levies by all manner of agencies, we did warn that we may be forced to increase tariffs. “What has happened now is that as law abiding citizens and responsible corporate entities, we are going about it the appropriate, responsible and legal way. For us to serve you well, we must first of all be in business” he added.
