By Theresa Igata

The Nigerian Communications Commission, NCC, has once again re-iterated its commitment to the accessibility and affordability of broadband and data services across the country even as it has commenced broad-based engagement with stakeholders on appropriate pricing for retail broadband.

This was disclosed by the Executive Vice Chairman of the Nigerian Communications Commission, NCC, Professor Umar Danbatta at a stakeholders’ forum on the study for the determination of cost-based pricing for retail broadband and data services in Nigeria.

According to the EVC, whilst the Commission is happy with the phenomenal growth recorded in the industry, especially in active voice subscriptions, “we believe that the next critical phase is to ensure  that  everyone, wherever  they  live,  and  whatever  their  circumstances have access to the benefits of broadband and this can only happen with the pervasive deployment of broadband infrastructure and services across the country considering the potential of broadband as a key enabler of national productivity, economic growth and development, social inclusion and cultural enrichment.

“The  affordability  and  accessibility  of  broadband  services however is largely  determined  by  the  prices  that  are  charged  for  those  services.  Therefore ensuring that prices charged for retail broadband and data services are cost based in line with international best practice is critical to the deployment and uptake of broadband and data services in Nigeria”.

The EVC added that in line with the Commission’s mandate of creating an enabling environment and promoting fair competition in the telecoms industry and in line with the strategic objectives of the National Broadband Plan, “it has therefore become imperative to develop a proper pricing structure for broadband in Nigeria. This will not only ensure the affordability and availability of Broadband but also ensure fair competition by checking price discrimination, excessive pricing, predatory pricing, margin squeeze and price fixing amongst other things”.

This has necessitated the conduct of the Study on the Determination of Cost Based Pricing for Retail Broadband and Data Services Nigeria. To this end, the Commission, carried out a thorough selection process and appointed Messrs’ KPMG to, amongst other things:

To set guidelines for the regulation of the pricing of retail broadband and data services in Nigeria and specifically determine Price cap and floor where necessary;

To develop a regulatory pricing model based on the peculiarity of the Nigerian broadband and data services market coupled with international best practices;

To design the framework for collation of data that will be used for the Determination;

To determine the appropriate cost modeling technique and methodology to be adopted;

To determine the appropriate pricing regulatory measures to be adopted;

To determine need for ex-ante and ex-post regulation with respect to pricing in the retail broadband and data market segments;

To develop a suitable definition of big and new entrant/small operators, if necessary;

To conduct a general assessment of the retail broadband/ data market segment with a view of determining the appropriate methodology to be adopted; and

To design a cost model that is suitable for determining retail prices for broadband and data services taking into cognizance the macro-economic, technology and technical relevant factors.

It is expected that the outcome of the study will result in:

The determination of a uniform pricing structure within the broadband and data segment;

Ensuring effective competition in the broadband and data market segment;

Guaranteeing affordability and accessibility of broadband and data services in Nigeria;

Facilitating inflow, development and growth of the broadband market segment; and

The stimulation of further economic growth considering the catalytic role broadband services plays.

Speaking to journalists, the EVC added that a date has been fixed by the Commission in April to meet with the consultants to look at the outcome of their study and debate it. “That is when we’ll determine the pricing. This study when completed will help the consumer; it will not be on the usual electronic readiness that we talk about. It will have a positive social implication because services will be available, affordable and accessible”.

He however said that the directive for the 14-day window grace for consumers to use up their data before subscribing for more data,  has been issued and this is to the benefit of the consumer.

Whilst addressing  market  dominance  issues  in  the  upstream  wholesale  markets  is one of the ways to facilitate competitive price levels in retail broadband access  and service markets, it is possible that such action may not be a sufficient constraint on pricing in all segments of a retail broadband market, as such some form of ex-ante regulation of retail prices is appropriate or even necessary.

photo caption:

L-R: Sean Kennedy, Regulatory ICT Economist KPMG;  Josephine Amuwa, Director Policy Competition and Economic Analysis, Nigerian Communications Commission (NCC); Prof. Umar Garba Danbatta, Executive Vice Chairman/CEO NCC; Segun Sowande, Partner and Head Consulting KPMG; and Olusola Teniola, President Association of Telecommunications Companies of Nigeria (ATCON) during the Forum on Cost-based Pricing for Retail Broadband and Data Services in Lagos, yesterday.