The current economic crisis in Nigeria has resulted in telecommunication companies in the country to contemplate increasing the cost of calls, SMS and data by 40%.
The telcos made their plans known in communique addressed to the Nigerian Communications Commission, titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector’.
The communication firms capitalized their reason for the proposed charges on the rising cost of running businesses in the country.
If assented to by major stakeholders, the maximum cost of calls pegged at N6.4 would rise to N8.95 while the price cap of SMS will increase from N4 to N5.61, Tracknews understands.
The telecommunication companies under the aegis of the Association of Licensed Telecommunication Operators of Nigeria, addressed to the NCC that the industry has been financially impacted following the nation’s economic recession in 2020 and further affected by the ongoing Ukraine/Russia crisis.
They said this had resulted in an increase in energy costs, increasing their operating expenses by 35 per cent.
It further explained that the recent introduction excise duty of five per cent on telecom services had further increased the burden of multiple taxes and levies on the industry.
The letter read in part, “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.”
The firms reiterated that to survive the current economic hullabaloo, the commission should explore and provide other means of penalizing operators rather 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 other things.
They further requested an upward adjustment of the MTR by 40 per cent, noting specifically that “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.”
