Pantami and lower data tariff
Minister of Communication and Digital Economy Dr Isa Ibrahim Pantami’s directive to the National Communications Commission [NCC] penultimate week to, within five working days, undertake a downward review of the price of data being charged by telecommunications companies excited many subscribers but it was also strange and not well considered.
According to the minister, the directive followed incessant complaints he received from subscribers against the telecoms companies on the high cost and illegal deduction of data, which he said he would not allow to continue. Pantami, who said he himself was a victim of such infractions which are so common in the industry, promised to address the issue finally in the interest of Nigerians. He said data price being charged in Nigeria is among the highest even compared to countries that have far less population than Nigeria.
However, the Association of Licensed Telecommunications Operators of Nigeria [ALTON] described the directive as “dictatorial that could scare away investors from the country.” ALTON’s Chairman Engineer Gbenga Adebayo said the minister’s directive amounts to muzzling NCC.” He said, “It shouldn’t be muzzled so that the gains recorded in the country’s telecom industry are not reversed.’’ He wondered how the telecom regulator could meet the minister’s directive without a good frame work that will save the huge investment made by the operators. He added that telecom companies do not just sit and fix prices. Rather, they do so in conjunction with the regulator after taking into consideration various indices.
It is true that over time there have been plethora of complaints by Nigerians regarding the high price of data charged by telecom operators. Even more worrisome is the illegal data deductions that many subscribers claimed to have suffered from the companies. So far the telecom companies have failed to find a solution to these problems, which was what might have prompted the minister’s latest directive.
However, the minister’s directive runs the risk of being seen as unnecessary interference with NCC’s mandate. NCC, like similar bodies such as Nigeria Electricity Regulatory Agency, is charged with implementing and monitoring adherence to the provisions of the law governing telecom operations in the country. One of such is fixing appropriate tariff for voice and data as well as ensuring that the customer receives value for his money. In arriving at appropriate tariff, NCC, in conjunction with the telecoms companies, takes into cognizance various factors such as operating environment, investment put in and other indices.
Although the minister spoke about Nigeria’s high population as a reason why data prices should be cheap, he did not mention the operating environment in Nigeria, which is markedly harsher than in most other countries. Three factors, in particular, make for this harsh operating environment. They are epileptic power supply, multiple taxation and insecurity. To these must be added poor infrastructure, naira’s poor exchange rate against foreign currencies, and pervasive corruption in economic and social life. All these factors must be taken into consideration, explicitly or covertly, before arriving at appropriate pricing of services.
To mention one example, telecom firms here must maintain thousands of masts with two generators each, plus guards, and then huge supplies of costly diesel whose prices fluctuate every day. Vandalization of their equipment is also frequent, leading to heavy losses. Therefore, much as we also want to see lower data prices, what we expect the minister to do is to encourage NCC and operators to meet and look into these serious and genuine complaints in the interest of the subscribers, operators and the nation. We advise the minister not to engage in issuing populist directives that may be counter-productive to the smooth operation of the industry. He must resist the temptation of going beyond his powers as enshrined in the relevant laws setting up such bodies as NCC.
Much as Nigerians desire cheaper telecom services, we must not discourage investors that have made the single biggest investment in the Nigerian economy in several decades.