Teniola: Price of data must be affordable for those below poverty line
President of the Association of Telecommunications Companies of Nigeria (ATCON)- a professional, non-profit, non-political umbrella organisation of telecommunications companies, Olusola Teniola, in this interview with ADEYEMI ADEPETUN, explains challenges in data price review, data price wars, among other germane industry issues. He also said would work with the relevant stakeholders to ensure that all inhibitors to the price of data coming down are removed.
Who has the power to determine prices in the telecoms sector?
The Nigerian Communications Commission (NCC) in consultation with all stakeholders in the industry, who are impacted by the decisions made regarding the business model they execute under the commission’s licence they hold.
The Minister of Communications and Digital Economy, Dr. Isa Pantami, in November 2019, directed the NCC to ensure that telecommunications operators slash data prices. What do you make of the directive?
It is not about having a new directive, the reality and facts are that Nigeria is currently 10th on the list of African countries with cheap data. For instance, one gigabyte of data bundle costs $2.78, and this meets the Alliance for Affordable Internet’s (a4Ai)’ 2-for-1, which states that two percent or less of average household wage should be the cost spent on one gigabyte of data per month.
As we use and rely on the Internet more, we realise that one gigabyte of data soon runs out and not many families live above $2 per day! So, it is inevitable that the price of data needs to come down to be anywhere affordable for those below the poverty line. This is so that these households would be able to access the Internet. We, as an industry association, will work with the relevant stakeholders to ensure that all inhibitors to the price coming down are removed, such as multiple taxes, high cost of Rights of Ways (RoW), reduce vandalisation and theft of telecoms equipments.
If tariff reviews must be achieved, what are the factors that will trigger it?
I know that the Nigeria Communications Commission (NCC) has already engaged KPMG and has every right under the Nigeria Communications Act 2003 to introduce any method that is deemed necessary to justify the factors, challenges, targets and enabling environment to ensure that prices set by NCC are not going to cause a destruction of the industry, and the investments to date ($70bi).
Does price reviews have timing?
Usually, a one-year timeframe is adequate, however, stakeholders’ consultation can add another six to nine months to the overall process.
The directive by the minister amounted to forcing reduction by fiat, and it hasn’t gone down well with industry players. Don’t you think so?
The minister has his style of management and earlier in December 2019, the Association of Telecommunications Companies of Nigeria treated him to a reception in Abuja where he further demonstrated that he would work with the body and other stakeholders to overcome some of the difficulties faced by the industry. I will always advise dialogue in whatever form to address knotty issues and not through continuous conflict with critical stakeholders.
Will the suspended Data Floor Price have any impact on tariff reviews?
We currently have a race to the bottom as evidenced by margin pressures reported by all our members. Even the leader in the market is witnessing single digit Profit Before Tax (PBT), hence others are not in a position to absorb external price reductions without operational costs being eliminated, or reduced to a level that sustains the viability of industry players.
Service quality also depends on available infrastructure, do we have the infrastructure?
We need more fibre deployment, many more towers and Base Transceiver Stations (BTS), more coverage and further increase in network capacity to deal with Quality of Service (QoS) challenges. The costs are enormous, latest research suggests $68b over a 10-year period of Capital Expenditure (CAPEX) spend needs to come from both the government and the private sector to cater for the need of the growing population.
What is your take on regulations and policies in the sector?
The new Nigerian Broadband Plan 2020-2025 will address areas of focus and changes required to evolve the sector to an all-digital knowledge-based society. Industry 4.0 is what we need to catch up with. Power sector needs immediate reforms that can borrow a leaf from the reforms introduced into the telecom sector back in 2001.
How can the sector move forward in 2020?
We all need to work collaboratively. Price wars destroy value, and robs the consumers of choice in the long run. So, the government should create an enabling environment that attracts Foreign Direct Investments (FDIs) and private sector investors’ confidence.
What is your advise on the data price war going on in the sector?
Operators should stop the price war and invest in innovative solutions for the benefit of the over 175 million subscribers. They must also learn lessons from India’s data price wars and avoid the destruction of shareholder value.
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