NCC Moves to End Controversies in Data Price Floor
The Nigerian Communications Commission (NCC), the telecoms industry regulator, on Tuesday, commenced an industry wide consultation process that will put an end to the protracted data price floor that has generated a lot of controversies in the telecoms industry.
Addressing a stakeholders forum on Tuesday in Lagos, on the determination of cost-based pricing for retail broadband and data service, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta said the forum was meant to present the report of NCC’s commissioned study for the review of data prices, which he said has resulted in the imperative for an objective basis for pricing data at the wholesale level with the final aim of pricing at the retail levels.
NCC plans to get operators feedback from the forum, with a view to organising operators interviews and distribute data gathering templates and questionnaires, and thereafter, analyse collated data and feed into draft cost model and present preliminary findings in next stakeholders meeting.
NCC had in In 2013, conducted a study to assess the level of competition within the industry with a focus on the Wholesale Leased Lines/ Transmission Capacity market. The objectives of the study were to assess the transmission cable market through the analysis of market features such as pricing, regulatory climate and competition, as well as develop a cost model and draw inferences on the cost of providing transmis- sion services and the transparency and competitiveness of pricing in the markets. Based on the study, NCC removed the data price floor in 2013, and operators were permitted to freely determine prices based on prevailing market conditions.
This however, led to increase in mobile data usage, but with a serious plunge in prices, which resulted in a “scissors effect” with usage increasing, but average revenues per user decreasing. NCC however attempted to re-instate price floor on request from stakeholders in 2016, but later proceeded to suspend it, pending a detailed study which would form a more objective basis for regulatory intervention.
Thereafter, NCC commissioned a study to review data prices, which has now resulted in the imperative for an objective basis for pricing data at the wholesale level with the final aim of pricing at the retail levels.
Addressing operators during the Tuesday stakeholders’ meeting, Danbatta said the essence was to sensitise key industry stakeholders about the study that has commenced already, which will lead to the determination of data price floor.
“As industry regulator, we are using the stakeholders forum to target virtually all the stakeholders in the industry, operators and Internet Service Providers as well as the consumers,” Danbatta said.
He added that “The stage is geared towards the determination of the data pricing and that data is needed from the operators and consumers, to serve as input in determining the appropriate price for the broadband service, as well as data services. We have commenced but we are not there yet. The role of the regulator is to unleash a dynamic model that could be used in determining the data price in the telecommunication sector of the economy.”