The Nigerian Communications Commission (NCC) shocked Nigerians last week when it revealed that it had decided to put in place a 90k/megabyte data segment floor for so-called ‘big’ telecommunications company. Up til them=n, the NCC had remained one of the few government agencies that had actually lloked up for the welfare of Nigerians, especially in the telecommunications sector.
However, with that decision, which meant that some subscribers would have to pay over 300% more to access data services, the NCC went against the script. The reasons given by the telecommunications regulator do not add up in any way to support its decision, hence the alarm bells that should be ringing in our heads.
The NCC says that ‘small’ companies are being priced out of the sector due to the cost efficiencies that the big companies enjoy. Agreed that one of the functions of the Commission is to ensure fair competition in all sectors of the Nigerian communications industry. But the term ‘fair’ is usually accompanied with ‘free’ for a reason. In simple terms, a market must be free for it to be fair. Setting a cap for some companies in order to foster the growth of others can definitely not be described as ‘fair’.
The principle of free and fair market’ also affects NCC’s excuse that some of the big boys have more customers than they can handle and as such they cannot provide quality services. As Nigerians, we know that is the case for some companies. And that is where we exercise our freedom to choose. If I prefer quality over costs, I know who to patronize. If i prefer cost savings to quality, I also know who to patronize. Why has Etisalat with an of 94k/megabyte continued to survive in the same market?
The NCC also claimed that it was preventing an oligopoly in the market. Where the oligopoly was detected is beyond our comprehension. The telecommunications sector is one of the most competitive in the country with the big boys constantly coming up with innovations to keep and if possible increase their market share. If the small companies are so intent in growth, why can they not come up with innovations to boost their market. Globacom and Etisalat have done it earlier.
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When Glo entered the market, Econet and MTN were selling sim cards for tens of thousands of naira. Glo crashed to the then unbelievable price of about N5,000. Similarly, Econet and MTN said per second billing was impossible, Glo implemented it.
Etisalat came in at probably the height of competition for new entrants in the Nigerian market. Yet, they made their mark. How? Technological and customer-friendly innovations such as customized numbers, cheaper services etc. these prove that with the right market strategy, these so called small companies can rapidly boost their market, rather than looking to NCC to pamper them.
Thus, instead of proposing that these ‘small’ companies should improve their operations and strategies, they decide that Nigerians on the street, who are already crushed by the burden of the economic recession, should fund the inefficiencies and lack of visionary strategy of the small companies. Why can they not form partnerships that will give them the necessary clout to compete with the big boys?
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Another niggling issue is the restriction of the cap to data services where the big boys are having cheaper footing. Smile has the cheapest call rate of N5/minute to all GSM lines in Nigeria and even to foreign lines. This is already positively impacting on their market share. Would the NCC also protect the big boys from Smile as well?
Probably the most fundamental reason why the NCC was set up was to ensure that Nigerians are not exploited. Already, globally, Nigeria is lagging behind in the ICT sector. Was the move going to increase the access to data services or do the otherwise? Frankly speaking, the move would simply result in many Nigerians forgetting about data services. How would that help the data literacy? Where in the world has the NCC seen such a regulator carry such a move as the one they proposed?
With all these facts, as well as NCC’s previous record of protecting Nigerians, one cannot but raise eyebrows at the Commission’s motive for this move. Possibly, some Nigerans with stakes in these small companies want a greater share of the market and are too lazy to work for it. What better way to get what they want than to force the big boys to increase prices above theirs.