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Teledensity falls 33% as operators mull higher tariff in ‘hostile’ regions

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•South East, North Central, South West top affected areas
Telephone density (teledensity) in Nigeria; fell by as much as 33 per cent between February and March, according to the latest subscription statistics from the Nigerian Communications Commission (NCC).

Teledensity is the number of telephone connections for every hundred individuals living within an area. It varies widely across nations, and also between urban and rural areas within a country. Telephone density has significant correlation with the per capita Gross Domestic Product (GDP) of the area.

The figure fell from 124 per cent in February to 91 per cent in March. This development is coming on the heels of plans by telecommunications operators in Nigeria to increase tariffs in areas considered as being ‘hostile’ to their operations.

‘Hostile’ states according to the operators are regions where operators are facing serious challenges, including multiple taxes and extortions by various government agencies, vandalism, and insecurity.

The Guardian learnt that the tariff increase will only affect outgoing calls from troubled areas, while telecoms operators intend to engage consultants to carry out a cost-based study on the viability of this plan.

If the operators scale through, it then means that subscribers, which currently pay 30 kobo per second for voice calls, N4 flat for Short Messaging System (SMS), and spent N1,000 on the average for one gigabyte of data, would be made to pay about 50 per cent more, one of the operators confirmed to The Guardian  in confidence.

Further investigation revealed that three states in the South West, two in the South South; another two in the North Central, and all the five in the South East have been marked as ‘hostile’ states.

However, implementation of the plan must have the approval of the Nigerian Communications Commission (NCC), as contained in Section 108 of the Nigerian Communications Act 2003 (NCA 2003), which confers on NCC the sole responsibility to fix and approve tariffs and other charges for the provision of services in agreement with the operators.

But a senior NCC official said operators were yet to formally make their plans known to the Commission on the matter.

The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, who had revealed this plan at a telecoms forum in Lagos, said discriminatory tariff became necessary to make ends meet in the face of rising multiple taxes from the states.
According to him, the cost-based system appears to be the only solution to the age-long problem of arbitrary introduction of taxes that operators are facing across the states.

“What we are saying is, make the environment conducive for us so that we can serve you better, but that has not happened. There are so many hostile communities, which have become hostile to telecoms services and operators. They forgot that telecom is infrastructure of infrastructure.

“By basing our tariffs on cost incurred, we are also saying that in states where we pay less to render service, the people also pay less for the service, and vice versa.”

But speaking with The Guardian on the subject, Adebayo said: “we are looking at all the options in the best interest of sustainability.”

However, a senior official with 9Mobile, told The Guardian in confidence on Sunday that lately some of the affected states appeared to have had a change of heart on some of their arbitrary charges. “But this is because of the various advocacy measures we have undertaken as a body.”

He reiterated that the change of heart will not stop operators from the planned discriminatory tariffs, “because you trust these government agencies, when their revenues are going down again, they will come up with one fictitious levy; we are watching and consulting on the matter.”

Meanwhile, further analysis of the March subscription statistics showed that despite the fall in teledensity, active subscription was still around 173 million.

MTN, which last week listed 20.4 billion ordinary shares at N90 on the Nigerian Stock Exchange, remained the largest operator in the country with 65 million customers and 38 per cent market share. Globacom is second with 46 million users and 27 per cent share; Airtel has 45 million subscribers and 26 per cent share, while 9Mobile has nine million customers and 17 per cent market share.

Interestingly, Internet subscribers added 1.2 million from 114.7 million in February to 115.9 million in March, while Broadband penetration rose slightly, but still within the 33 per cent range and 63 million users.


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ALTONGbenga AdebayoNCC
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