Overview

The macroeconomic conditions of the economy within the past 18 – 24 months has impacted virtually every sector of the economy. the telecommunications sector is not immune to these significant macroeconomic factors. Telecoms operators have argued that the prevalent economic conditions, currency devaluation and inflation rate have adversely affected operations, causing a significant increase in cost. Regardless of these changes and challenges, somewhat surprisingly, the tariff rates in the telecommunication industry have remained largely the same since 2013. This situation led some telecoms operators to request a 100% increase of tariff rates from the Nigerian Communication Commission (NCC).

Section 108(1) of the Nigeria Communications Act, 2003 (“the Act”) provides that: “Holders of individual licences shall not impose any tariff or charges for the provision of any service until the Commission has approved such tariff rates and charges except as otherwise provided in this Part”. Thus, by virtue of this provision, the NCC is responsible for approving tariff rates in Nigeria.

Pursuant to the powers of the NCC as contained in Section 108(1) of the Act, on January 20, 2025, the NCC through its Director of Public Affairs, Reuben Mouka, in response to the tariff adjustment requests by Network Operators, issued a press release informing the public of a 50% increase of tariff rates. The adjustment as stated by the NCC would remain within the tariff bands stipulated in the 2013 NCC Cost Study, and requests would be reviewed on a case-by-case basis. Additionally, the NCC stated that the tariff adjustment shall be implemented in strict adherence to the NCC Guidance on Tariff Simplification, 2024.

NCC’s approval aims to encourage investment in infrastructure and innovation, ensuring that services and connectivity are improved, enhanced customer service delivery is maintained, and that ultimately, the gap between operational costs and current tariffs would be adjusted whilst ensuring that the delivery of services to consumers is not compromised.

Although the tariff rates adjustment has been applauded by telecoms operators, the interest of consumers who are now required to pay these tariffs for calls, data and other services must be guaranteed. It is important for telecommunications operators

and licensees to ensure strict compliance with the Amended NCC Guidance on Tariff Simplification as referenced and mandated by NCC in the press release.

The NCC Guidance on Tariff Simplification, 2024 (“the Guidance”)

The Guidance aims to enhance transparency, ensure consumer understanding, and promote fair competition by simplifying tariff structures and promotional elements. Notably, the NCC had issued its Guidance on Tariff Simplification on June 29, 2024, however, further to a subsequent amendment, the Guidance was amended on November 25, 2024, which took immediate effect.

The objective of the Amended Guidance is to reduce the complexity of tariff plans and bundles, ensure that promotional elements of tariff plans are transparent and fair, protect consumers’ interests by providing clear and understandable tariff information and to promote fair competition among licensees by standardizing tariff structures.

The implication of the foregoing to telecoms operators is the need to issue clear and explanatory tariff plans to customers to clear any form of ambiguity or hidden charges. Importantly, Paragraph 4.4 of the Amended Guidance provides that every operator is required to publish on its website, (in a tab dedicated to tariff information) a table showing the characteristics of each tariff plan and bundle it offers. The tariff communications should be presented in clear language and a user-friendly format in accordance with the provisions of the Commission’s Consumer Code of Practice Regulations and other applicable regulatory instruments.

Timelines and Deadlines

Upon issuance of the Amended Guidance, operators were expected to align their offerings with the Amended Guidance by December 13, 2024. However, in view of the tariff adjustment by the NCC, the press release does not state whether there will be an extension of time to comply with the Amended Guidance.

Conclusion

In conclusion, the 50% tariff adjustment by NCC is a welcome development for telecoms operators, most of whom have waited over a decade for this change. As the primary regulator of the telecommunications industry, the NCC must continue to uphold its mandate in maintaining a delicate balance between safeguarding the interests of telecoms consumers and promoting a viable and profitable business environment for companies and investors.