Telcos demand 40% increase on voice calls, SMS, data

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By Favour Nnabugwu



Nigerians are to witness a 40 percent increase in voice calls and data tarrifs  by  telecommunications operators, telcos in the country.

The increase it was informed was due to high cost of diesel to operate their businesses, incessant harrasssments 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 is reliably gathered that ALTON has already sent a letter to the Nigerian Communications Commission, NCC, seeking the upward review of tarrifs 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 sighted by Vanguard 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 ‘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.”

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.”

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