Two weeks ago, rumours started filtering around the interwebs that Nigerians might be in for an increase in data prices. It was gathered that the NCC issued a directive to telcos to change their data tariffs to enable small operators and new entrants remain profitable.
Yesterday, The Cable confirmed that the NCC really did direct mobile operators to enforce a new data tariff regime from December 1, 2016.
According to them, NCC directed that the new (interim) price floor for data services will now be 0.90k/MB for “big operators” stating that “this rate will subsist pending the finalisation of the study on the determination of cost-based pricing for retail broadband and data services in Nigeria.” By setting a price floor, which the commission withdrew just last year, data prices will effectively increase.
Out of the four big telcos in Nigeria, two have communicated the news of the data tariff review to their customers. MTN put up a pre-recorded message on their customer care line with the following:
Dear customer, please be informed that from the 1st of December 2016, all MTN data plans will be changed in compliance to NCC directive to all operators. Thank you.
Glo also sent a data subscriber this message.
Dear Customer, your plan will soon expire after which you will be moved to Flexi voice and data recharge. Use it the way you like. To buy another data plan visit http://hsi.glo.com or dial *777#
NCC says the directive is “in order to provide a level playing field for all operators in the industry [allowing] small operators and new entrants to acquire market share and operate profitably. Small operators and new entrants are hereby exempted for the price floor for data services.”
To clear up any confusion that customers might have concerning this issue, NCC says, “For the avoidance of doubt a small operator is one that has less than 7.5 percent market share and a new entrant is an operator that has operated less than three years in the market.”
What is the NCC driving at? Well, for one, we know that it is trying to protect small operators like Smile, Spectranet and Ntel. Their major USP for entering into the market was 4G LTE data services and now that the big telcos have also joined 4G gang, things are not looking good for them. Also, the NCC issued a much-overlooked caveat when they withdrew the price floor last year. The Commission had stated that it could restore the price floor anytime it observed distortion in the market.
As at August 2015, N1000 would have bought a Glo subscriber 1GB worth of data. Today, that N1000 will buy you 3.2GB worth of data. On the other hand, for a “small” player like Smile, N1000 is only worth 1GB of data today.
Methinks somebody or some people went crying to NCC and as a good big brother, NCC decided to do some protecting. Seems I’m not the only one with this line of thought. Daily Trust reports that according to an anonymous NCC official, the directive was as a result of complaints from new entrants who claimed that they couldn’t offer data for the same prices as the big telcos and still remain profitable.
Some people are even saying Ntel is the snitch.
So let me see if I am understanding this, NTel went to tell NCC that the others are making market hard.
So NCC is punishing us? pic.twitter.com/SZSccpdvIZ
— Pst. Gbenro (@gbenro) November 29, 2016
I don’t expect that the price increase will have a huge impact. The prices will increase and we will all adjust. That’s what we’re good at, anyways.