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NCC plans cheaper Internet access, price caps on cable transmission

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Fibre-Optic-Cable-National-Broadband-Network-12499607FOR market competitiveness and to ensure affordable ubiquitous Internet access in the country, the Nigerian Communications Commission (NCC) is planning to set price caps on the cable transmission segment of the nation’s $32 billion telecommunications market after a careful cost based determination has been completed.

Though, NCC statistics put Internet subscribers at 82 million, majorly on the narrow band, majority of Nigerians still have no access to affordable broadband services, coupled with increasing bad services.

The proposed new pricing regime was contained in a study undertaken by KPMG on behalf of  NCC. The study was presented in Lagos at a Stakeholders Consultative Forum organised by the commission.

According to NCC, KPMG was contacted two years ago to carry out the study as part of its regulatory oversight function to address competitive dynamics, pricing and related matters in cable transmission pricing among operators.

The Executive Vice Chairman of NCC Dr. Eugene Juwah, said the move was informed by the commission’s observations of arbitrary and discriminatory pricing inherent in the transmission line market segment.

Juwah, who was represented at the forum by the NCC’s Executive Commissioner Stakeholder Management Dr. Okechukwu Itanyi, noted that the commission engaged the services of KPMG to ensure for the execution of the project is guided by reality in the sector.

According to him, the presentation of the findings from the study to stakeholders is to further prove the commission’s participatory regulation to gather opinions and inputs for best pricing regime in the sector’s cable transmissionmarket.

Juwah listed some of the issues raise by operators in the cable service to borderon discriminatory and arbitrary pricing, predatory pricing, denial of access to viable routes among others.

He said: “While the policy of government on communication is that appropriate prices should be determined by market competition, but it also recognises that in the journey from monopoly to full market competition, there be period of transition when competitive market forces may be inadequate to bring about efficient market conduct and prices that are clos to costs. In such situations, the policyy provides that regulatory intervention goes into effect.”

He explained that the above are reasons for NCC to embark on the cost study titled ‘Cost-based transmission cable pricing and development of an accounting separation framework/retails voice tariff’.

The essence of determining a cost based transmission cable pricing and development is to enable an extremely high degree of frequency reuse, requires minimal frequency coordination, which allows links to be deployed close to one another without interference.

The KPMG Nigeria Head, Media, Telecoms and Technology, Joseph Tegbe, also said the primary objective of the project is to develop a cost based option for regulating the pricing of transmission cable in the Nigerian Telecoms Industry.

According to him, the greatest challenge encountered in the project was access to data as it took a year before accessing operators information.

He said having followed the best international best practices in carrying out the study, information given by the telecoms operators was used as benchmark in the proposed pricing regim



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