Telecommunication companies in Nigeria under the aegis of Association of Licensed Telecom Operators of Nigeria (ALTON) are proposing a 40 percent increase in the cost of calls, SMS and data to the Nigerian Communications Commission (NCC).
The proposed review will see the base cost of calls rise from N6.4 to N8.95 while the price for SMS will increase from N4 to N5.61.
In a letter to NCC titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ ALTON said the hike is due to the rising cost of running business in Nigeria. The group said that their operating expenses had increased by 35% following Nigeria’s economic recession in 2020 and the Ukraine-Russia crisis.
ALTON added that the recent introduction of 5 percent excise duty on telecom services further increased its cost of operations.
The letter read in part,
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.
“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.”
ALTON also requested an upward adjustment of the MTR by 40 per cent.
It said, “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.”
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.