Why NCC Told Telecom Firms To Hike Data Prices

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NCC Suspends Plan To Increase Data Price 

The Nigerian Communications Commission (NCC) In a letter to the big operators, had directed the telecom operators that the floor plan for data should be 0.90 kobo per megabyte effective as from the 1st of December , 2016 “pending the finalisation of the study on the determination of cost-based pricing for retail broadband and data services in Nigeria”.

All the big 4 telecom giants in Nigeria such as MTN, Airtel and the grand masters of data globacom were already charging below the new floor rate therefore this directive means a 328% increase in price charges for data services.

(NCC) defines small operators as those that have less than 7.5% market share.

NCC believes that without a price floor, the big operators can engage in predatory pricing to drive down other operators, meaning the industry could be moving towards a monopoly.

DATA CHARGES BEFORE NOW:

Big operators average price per MB
MTN 45 kobo
Glo 21 kobo
Etisalat 94 kobo
Airtel 52 kobo
= Average 53 kobo

Small operators/new entrants average price per MB
Smile 84 kobo
Spectranet 58 kobo
Natcom 72 kobo
= Average 71 kobo

An official of the Nigerian Communications Commission (NCC) told The Cable that CDMA operators e.g Multilinks and Starcomms are being muscled out of the data business by the 4 Biggest telecom giants in africa because of their market power.

At the rate they are crashing data tariffs, there is every chance that they will soon kill all the small operators and new entrants

EXAMPLE: Globacom currently charges 21kobo per MB maybe because of the economies of scale advantage, compared to Smile which charges 84kobo per MB, (4 times Glo’s rate) in order to break even. 
Under the new tariff regime, Smile can continue to charge 84k but Glo will have to move up to 90k/MB – a 328% increase.
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