Telecom data should be easy on the pocket
Less than a week after a rather surreptitious move toward telecommunication data price increase was obstructed by the Senate, the Minister of Communications, Adebayo Shittu, has maintained that the increase is inevitable.
The Senate had ordered the suspension of the hike which was to take effect on December 1, and had initiated a public hearing on the matter. It was during the session before the Senate Committee on Communications last week that the minister insisted that even though the data price hike may have been suspended, data price would have to go up eventually.
Here are his reasons: “I know that if you want to make omelet, you must break eggs. Unfortunately, in this country, we fail to appreciate the transformation role that ICT has brought about in the lives of Nigerians…It is also important to say that operators in Nigeria are operating in a very harsh situation, which is not known in other advanced countries. For instance, over the years, the Nigerian state has not succeeded in fixing electricity over the last 20 years…”
Shittu continued: “The other challenge is in the area of security; … Indeed we know what the security situation is in the country. Apart from that, we also have the problem of taxes…What I am saying is this, if Nigeria has invited international investors to come and invest in Nigeria so that our lives will be better, … to whom much is given, much is expected.”
However, it is intriguing that the Nigeria Communications Commission (NCC) and operators like MTN have different arguments to support data price hike. Prof. Umar Dambata, the executive vice chairman of NCC, told the Senate that the regulatory body intervened with an interim price floor for data services to avert a looming price war in the telecommunications sector. Such a price war, it feared, could eventually lead to a monopoly in the telecoms industry that would force small operators to shut down.
But MTN, perhaps the biggest telecoms player in Nigeria today, has an entirely divergent view. The company’s CEO, Mr. Ferdinand Moolman, argued: “MTN is committed to continue its efforts to provide the best data network to the people of Nigeria. In this regard, however, there are a number of factors that impact the sector’s sustainability such as: the rise of headline inflation to about 17.9%; the depletion of operator revenues by unlicensed providers of “over-the-top” telecoms services who do not have any physical presence; nor pay taxes; nor make any significant contribution to employment or other socio-economic objectives of the government in Nigeria; and the inability of operators to access foreign exchange (this is particularly debilitating given that most of our inputs are sourced off-shore). This has very significantly increased both operating and capital expenses.”
The foregoing narratives give insight into the challenges facing telecommunications as well as telecom operators. First, it is apparent that the minister is in a strange environment and seems to need guidance. The NCC, on its part, appears to have a different agenda, and is probably more intent on beefing up its bottom line; while MTN’s presentation was clarifying enough to give a picture of alleged irregularities that should be remedied. The operator has invested massively in data facilities and seems poised to dictate price to the chagrin of other stakeholders.
Whether the situation calls for data price hike is another matter altogether. It is important to consider the situation contextually. It would appear that the problems in the telecoms sector are complicated by weak and ineffective regulatory and supervisory institutions; this can be observed from the operator’s argument. It follows that the minister and the NCC need to be more conscious of their roles and more alive to their responsibilities.
There is no doubt that telecom data is indispensable today and will likely be even more so in the future. The country has a duty to ensure that data is inexpensive and abundant in a data age.
