Telecommunication companies under the Association of Licensed Telecom Operators of Nigeria (ALTON), have proposed a 40% hike in data, call, and SMS costs, a development that would consequently see people paying for more in the country.
Due to the rising cost of running a business in Nigeria, the union sought to see the price floor of calls increase from N6.4 to N8.95 while the price cap of SMS, increased from N4 to N5.61.
In a letter in which ALTON made this proposal, the union said there had been a 40% increase in the cost of doing business in the nation, adding that the telecommunication industry has been financially impacted following the nation’s economic recession in 2020 and the effect of the ongoing Ukraine/Russia crisis.
According to the union, aside from energy costs increment, other operating expenses in the telecommunication industry have gone up by 35%.
The letter read: “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 and data and SMS. Given the state of the economy and the circa 40% increase in the cost of doing business, we wish to request 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.
“In implementing the said recommendations, however, we recommend that the 40% increase in the cost of doing business be factored in to arrive at a cost price per GB in view of the current economic situation.”
