The Nigerian Communications Commission (NCC) is working to simplify more than 369 existing telecom tariff schemes so that consumers can make better-informed judgments.
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The NCC seeks to implement a similar change, taking inspiration from India’s Telecom Regulatory Authority (TRAI), which in 2004 limited telecom providers to no more than 25 tariff choices in an effort to improve billing transparency.
“The major reason for initiating this consultation process was that the service providers have been offering a large number of tariff plans, and there were reports that this was confusing consumers and affecting their ability to make informed choices,” TRAI announced in 2004.
The NCC stated that it is now necessary to cap tariff plans in regard to India’s plan.
“Similar to the India experience, the commission has placed a limit on the number of tariff plans an operator can offer at any given point in time,” NCC stated.
The NCC’s “Guidance on the Simplification of Tariffs in the Nigerian Communications Sector” states that starting on or before December 31, 2024, each operator may only have 100 bundles and seven pricing options. This action was taken in July with the goal of promoting transparency and simplifying tariffs.
The NCC claims that a sizable amount of tariffs in place today were formerly promotions that telecoms converted.
“To address tariff complexity, NCC issued a Guidance on Tariff Simplification, requiring operators to provide clear, accessible information on data plans and pricing. This transparency would enable customers to make more educated decisions regarding their data consumption and billing,” Aminu Maida, executive vice chairman of the NCC, stated during the 93rd Telecoms Consumer Parliament.
In the upcoming months, operators will put this advice into practice, he said, providing customers with tables that include all terms and conditions, billing rates, and tariff options.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) head, Gbenga Adebayo, underlined the advantages of more straightforward and uncomplicated data tariffs.
“With simplified tariffs, consumers can take charge of their data experience by making better-informed decisions about which data packages best fit their needs, spending limits, and usage patterns,” he said.
The uncertainty created by the distinction between tariff rates for normal and promotional programs is one of the NCC’s main concerns.
“In some situations, operators apply different effective tariffs to bonus accounts, resulting in separate tariffs for the main and bonus accounts. This information is not disclosed to customers, which may result in uninformed decisions,” according to the NCC report.
“What happens is that someone signs up for a promotion that offers them three times as much. But what they don’t know is that the promo is charged at a higher rate than their normal billing rate, causing confusion when the airtime finishes quickly,” one NCC official clarified.
The NCC wants all bonuses to adhere to set pricing floors and restrictions in order to safeguard customers. Bonus allowances (phone, data, and SMS) should also be clearly advertised in terms of naira, minutes/seconds, or gigabytes/megabytes. Additionally, operators are required to provide customers with alternate options and at least 30 days’ notice of any modifications to their tariff plans.
In order to educate subscribers on the current tariff simplification plan and assist them in making informed decisions, operators are now tasked with putting consumer education initiatives into action.
The EU wants carriers to follow the Quality of Service (QoS) regulations’ Key Performance Indicators (KPIs) in addition to its pricing simplification goal. Any drop in service quality brought on by promotions or pricing adjustments needs to be fixed right away.
NCC’s Maida pointed out that issues like telecom asset theft and vandalism, which are expected to cost N23 billion in 2023, still make it difficult to maintain service quality.
He added that operators’ capacity to invest is being impacted by the nation’s growing business costs and present macroeconomic difficulties, which could have an effect on QoS.
Recent information from Airtel Africa’s and MTN Nigeria’s financial statements showed lower network infrastructure spending. In the first nine months of 2024, Airtel Nigeria’s capital expenditures dropped by 36.59 percent to $149 million, while MTNN’s spending fell by 27.79 percent to N217.64 billion.
