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Telecom operators plan 40percent tariff hike

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…GSM users to pay more

By Uche Kalu

TO CUSHION the effect of the rising cost of running a business in Nigeria, the telecommunication companies are proposing a 40 per cent increase in the cost of calls, SMS, and data to the Nigerian Communications Commission(NCC).

  Due to their proposal, the price floor of calls will increase from N6.4 to N8.95 while the price cap of SMS will increase from N4 to N5.61.

  This was disclosed in a letter titled, ‘Impact of the Economic and Security Issues on the Telecommunications Sector. The letter was written by the telecommunications companies under the aegis of the Association of Licensed Telecommunication Operators of Nigeria (ALTON) to the NCC.

  The telecom companies noted that there had been a 40 per cent increase in the cost of doing business in the nation. According to the statement, the telecommunication industry has been financially impacted following the nation’s economic recession in 2020 and the effect of the ongoing Ukraine-Russia crisis. They said this had resulted in an increase in energy costs, increasing their operating expenses by 35 per cent. They added that the introduction of the recent excise duty of five per cent on telecom services had further increased the burden of multiple taxes and levies on the industry.

  The letter read in part: “As the commission may be aware, the power sector under the supervision of its Nigerian Electricity Regulatory Commission of the power sector in November 2020 undertook a review of electricity tariffs to cater for the economic headwinds reported above.

  “In view of the foregoing, ALTON considers it expedient for the telecommunications sector to undergo periodic cost adjustments through the commission’s intervention in order to minimise the impact of the challenging economic issues faced by our members. Details are hereunder:

  “Upward review of the price determination for voice, data and SMS. Given the state of the economy and the circa 40 per cent increase in the cost of doing business, we wish to request for an interim administrative review of the mobile (voice) termination rate for voice; administrative data floor price, and cost of SMS as reflected in extant instruments.

  “With respect to voice an SMS cost, ALTON respectfully requests the commission to consider a mark-up approach to address the upward price adjustment desirable for the industry. We have enclosed herein and marked as ‘Annexure 1’our proposal in that regard.

  “For data services, we wish to request that the commission implements the recommendations in the August 2020 KPMG report on the determination of cost-based pricing for wholesale and retail broadband service in Nigeria. Excerpts from the report, are attached and marked ‘Annexure 2’ to provide a further illustration

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