Nigeria’s telecom regulator, the Nigerian Communications Commission (NCC), has disapproved of the country’s telecom operators’ most recent pricing increases for voice and internet services. The latest effort by Nigerian cellular companies to pass on increased costs to their customers is this rate increase of 10%.
Despite having given its approval to the tariff increase, the regulator is now pushing for a reverse since its board did not. “Furthermore, even though the tariff adjustment was proposed and provisionally approved by the management, pending the final approval of the board of the commission, in the end, it did not have the approval of the board of the commission. As a result, it is reversed,” a statement dated October 2022 from the NCC reads.
The regulator claimed that after conducting a “critical and realistic evaluation and study of the operational environment and the existing business climate in Nigeria,” this decision was made.
Telcos were compelled to increase the cost of internet and voice calls by at least 10% to offset the consequences of a continually growing cost of living that was made worse by double-digit inflation at a 17-year high. The two largest telecom companies in the nation, Airtel and MTN, acknowledged raising their data charges.
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Reasons For The Rejection By NCC
According to the Alliance for Inexpensive Internet (A4AI), 1GB of mobile data costs the average Nigerian 1.66% of their monthly salary, making data prices in the nation relatively affordable. Unchecked price increases put this affordability at risk and increase the likelihood that 1 GB will cost more than 2% of monthly income.
The move, the regulator said, is to “protect the citizen” and “ensure justice to all stakeholders involved” and “as such, anything that will bring more hardship at this critical time will not be accepted.”The regulator pointed out that this was also the reason a proposed 5% levy on telecommunications was suspended last month.
Due to inadequate power supply, telcos, whose operations depend on continuous power supply, are forced to pay a 200% increase in diesel prices to keep the lights on in their base stations. The regulator pledged to make sure that all of its processes and procedures for determining rates in the telecom sector are open, effective, and carried out after consulting the entire sector
FG Suspends 5% Excise Duty On Telecom Services
The federal government has reportedly halted a 5% excise levy on telecommunications services in Nigeria, according to Isa Pantami, minister of communications and digital economy. The Punch reports that Pantami made this announcement in Abuja at the first meeting of the presidential committee on excise duty in the digital economy sector.
The minister claimed that the industry is already overtaxed and subject to numerous unnecessary taxes. Pantami criticized the government’s proposal to enact the tax.
According to Zainab Ahmed, minister of finance, budget, and national planning, the federal government would nonetheless proceed with implementing the 5% excise levy on telecommunications services.
Zainab Ahmed pointed out that President Muhammadu Buhari-approved tax was implemented after the pertinent institutions were informed, including the communications ministry.
“Against the comments by Isa Ali Pantami, honourable minister of communication and digital economy, concerning the five per cent excise duty hike on telecoms services, it is worth noting that there was a circular stating the planned hike, which was addressed to the communication minister and other relevant ministries and agencies of government,” she had said in a statement issued by the ministry.
“The circular Referenced No. F. 17417/VI/286, dated March 1, 2022, and titled “Approval for Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments” was addressed to different ministers, including the honorable minister, communications and digital economy, and other heads of government agencies.”
Pantami’s opposition was also criticized by the finance minister, who said that Pantami was involved in the Finance Act. The finance minister’s media assistant, Yunusa Abdullahi, declined to comment on the situation.