40% tariff hike: FG, GSM operators to deliberate on development

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Factual Pursuit of Truth for Progress

 

The Association of Licensed Telecoms Operators of Nigeria (ALTON), a group of telecommunication companies have said it expects to begin conversations over the state of the telecoms industry with the Federal Government through the Nigerian Communications Commission soon, Punch reports.

This was made public by its Chairman, Gbenga Adebayo on Monday.

Adebayo said, “We do not give a timeline to our regulator. We would only give information as to what is the current state of affairs in the industry. And we know the regulator would either conduct a study or review the data that we provided. So, we can’t give a timeline to our regulator.

“We expect that some conversations will now commence around it.”

This is coming in response to a recent letter by the association to the NCC on the state of the telecoms industry.

In the letter, telcos proposed a 40 per cent increase in the cost of calls, SMS, and data as a result of the rising cost of running a business in the nation.

Reacting to the outrage that followed the intended hike in the cost of telecom services, the NCC said telcos could not increase costs without due regulatory approval from it.

According to the regulator, any cost determination is usually the outcome of transparent studies which are fair to enhance healthy competition among operators, provide wider choices for the subscribers, and ensure the sustainability of the telecoms industry.

The NCC stated, “However, while there could be justifiable reasons for MNOs’ demand for tariff increase, it should be noted that they are not allowed to do such either individually or collectively without recourse to NCC, following the outcome of a cost study. This is not the case for now.
Also, while speaking on in a television interview on Monday, Adebayo said the current pricing regime in the telecom industry could not sustain the industry.

He said, “We are confronted with different economic realities. And the fact remains that if you look at the economic indices, the current pricing regime is not sustainable.

“And what we have done is to approach our regulator, to present a case to them to show them where we are as an industry. We made some recommendations as to some of the things that can be done to forestall the price review.

“But certainly, considering the global energy price considering the challenges we face in our operating environment, if we are not getting any regulatory intervention, it would be a bit difficult to sustain the industry with the current pricing regime that we have.”

According to him, the telecom sector is a highly regulated industry, and any tariff hike must have the approval of the regulator.

He added that telcos could not change telecom service prices without regulatory approval.

Adebayo stated, “We must warn that there is no industry that is immune against failure. For us to avoid any catastrophic situation in our sector we are saying let’s look at the reality of our pricing, let’s look at the challenges we face. Let the government do something in order to mitigate against having this kind of explosion.”

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