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Nigerians To Pay More As GSM Operators Plan 40% Tariff Hiked

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Telecommunications companies are proposing an increase of 40% in the price of calls, SMS as well as data, to the Nigerian Communications Commission as a consequence of the increasing cost of running a company in the country.

Based on their plan on their proposal, the price floor of calls will rise by N6.4 to N8.95 and the cap price for SMS will rise between N4 to N5.61.

This was made clear in a document titled “Impacts of Economy as well as Security Issues on the Telecommunications Sector’ that was discovered by our reporter.

The letter was sent by Telecommunications companies that are part that of Association of Licensed Telecommunication Operators of Nigeria to the NCC.

in the document, telecom firms said that there was an increase of 40% in the costs of conducting business in the country.

As per their research, telecommunications sector has suffered financial losses by the nation’s economic slump in 2020 as well as the impact of the ongoing Russia/Ukraine crisis.

The company said that this has led to an increase in the cost of energy and a rise in operating costs by 35 percent.

They further stated that the recent introduction of an excise duty of 5 percent on telecoms was a further increase in the burden of taxation and levies on the sector.

The letter stated in part “As the commission might be aware the power sector is under the oversight by it Nigerian Electricity Regulatory Commission of the power sector in the month of November conducted a review of electricity tariffs to accommodate the economic headwinds mentioned above.

“In light of the above, ALTON considers it expedient to allow the telecom industry to go through regular cost adjustments as a result of the intervention of the commission to minimize the impact of the thorny economic issues that our members face. The following information is available:

“Upward review of price determination for voice , SMS and data. Due to the economic situation and the 40 percent increase in the costs of business, we are requesting to seek an interim review by the administrative department regarding the cell (voice) termination fee for administrative data, voice floor price and the cost of SMS in the current documents.

“With regard to the voice SMS costs, ALTON respectfully requests the commission to look into the possibility of a mark-up method to tackle an upward adjustment in price that is desirable to the sector. We have attached herein the document is titled ‘Annexure 1’. Our proposal regarding this.

“For the data service, we would like to ask that the commission adopt the recommendations contained in the report of August 2020. KPMG document on calculation of cost-based pricing for retail and wholesale broadband services in Nigeria. Extracts from the report are included and marked as “Annexure 2 to give a additional illustration.

“In applying the mentioned suggestions, however we suggest that the 40 percent increase in the costs of conducting business be taken into account to determine a per GB, in the light of the current economic conditions.”

The governing body for telecom companies also said that to assist telcos in this recession the commission should investigate and offer other options for penalizing operators instead of punitive sanctions monetary; and extend the timeline for the payment of fees and regulatory levies; demand for the Federal Government to sign the executive order that declares the telecoms infrastructure to be a crucial infrastructure for the nation to help reduce costs to replace damaged and stolen infrastructure, and other.

In the first section of the annexure in the formal letter body demanded an increase in MTR by 40 per cent. MTR by 40%.

The statement reads, “For large operators, the new temporary MTR in the amount of N5.46 from N3.90 which represents 40 percent more cost of doing business.

“For small-scale operators, we have a the new intermediary MTR in the range of N6.58 from N4.70 which represents 40 per cent rise in the price of business.”

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