November 29, 2022

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FG reverses the unilateral increase in tariff by GSM service providers

2 min read

By Reuben Muoka

The attention of the Nigerian Communications Commission (NCC) has been drawn to media reports of unilateral implementation of the recently approved 10 per cent upward tariff adjustments for some voice and data services by the service providers, on their networks.

The consideration for 10 per cent approval for tariff adjustments for different voice and data packages was in line with the mandates of the Commission as provided by the Nigerian Communications Act, 2003, and other extant Regulations and Guidelines, as this was within the provisions of the existing price floor and price cap as determined for the industry. The decision was also taken after a critical and realistic review and analysis of the operational environment and the current business climate in Nigeria, as it affects all sectors of the economy.

Furthermore, even though the tariff adjustment was proposed and provisionally approved by the Management, pending the final approval of the Board of the Commission, in the end it did not have the approval of the Board of the Commission. As a result, it is reversed.

The Honourable Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, has maintained that his priority is to protect the citizens and ensure justice to all stakeholders involved. As such, anything that will bring more hardship at this critical time will not be accepted.

This was also why he obtained the approval of President Muhammadu Buhari for the suspension of the proposed 5 per cent excise duty, in order to maintain a conducive enabling environment for the telecom operators. Much as there is an increase in the cost of production, the provision of telecom services is still very profitable and it is necessary that the subscribers are not subjected to a hike in charges.

In view of the above, the Commission, through a letter sent on the 12th of October 2022, has already directed the affected Mobile Network Operators (MNOs) to reverse the upward tariff adjustment. The Commission will carry our further consultations with all industry stakeholders on the best approaches that will protect and uphold the interest of both the consumers and the service providers.

The Commission will continue to entrench very transparent processes and procedures for rates determination in the industry. The process is usually carried out with wide industry consultation. It is through these processes that price floors and price caps for data and voice services are benchmarked, regularly reviewed, and determined from time to time.

The Commission will continue to abide by this time-tested process and international best practice to ensure an efficient pricing mechanism for the telecommunications industry in Nigeria.

Reuben Muoka, Director, Public Affairs,

19th October 2022.

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