NCC To Determine Affordable Broadband Prices, Data Services
Pursuant and consistent with its mandate of regulating the telecommunications industry, the Strategic Management Plan (SMP 2014-2018) and the 8-Point Agenda, the Nigerian Communication Commission, organized a forum on Cost Based Pricing for retail broadband and data services for the determination of affordable broadband prices based on costs.
The forum held at the Digital Bridge Institute (DBI) Cappa, Oshodi, Lagos is in part one of the Commission’s ways of engaging with industry players and stakeholders for participatory regulation to come up with a cost-based price regime that will lead to a win-win industry, economic development and growth of the nation.
The NCC said 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.
To meet this, NCC Executive Vice Chairman, Prof. Umar Danbatta, disclosed that the commission has appointed Messrs’ KPMG to conduct a study on the Determination of Cost Based Pricing for Retail Broadband and Data Services Nigeria.
Danbatta explained that KPMG Professional Services, among other things, would 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; develop a regulatory pricing model based on the peculiarity of the Nigerian broadband and data services market coupled with international best practices; design the framework for collation of data that will be used for the Determination; determine the appropriate cost modeling technique and methodology to be adopted; determine the appropriate pricing regulatory measures to be adopted; determine need for ex-ante and ex-post regulation with respect to pricing in the retail broadband and data market segments.
Other expectations from KPMG would include developing a suitable definition of big and new entrant/small operators, if necessary; conduct a general assessment of the retail broadband/ data market segment with a view of determining the appropriate methodology to be adopted; and design a cost model that is suitable for determining retail prices for broadband and data services taking into cognizance the macroeconomic, technology and technical relevant factors.
The outcome of the study, according to Danbatta would result in among other things; 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.
The EVC noted that the Nigerian Telecommunications industry has undoubtedly recorded significant growth over the years and the impact and benefits that come with this growth cuts across every segment of the Nigerian economy and the lives of its citizenry.
“Whilst the Commission is happy with this 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,” he stressed.
Danbatta added that 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, saying that 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.”
The EVC noted that the impact of broadband as a key enabler of national productivity, economic growth and development, social inclusion and cultural enrichment cannot be overestimated and, called upon all stakeholders to be part of this historic and heroic undertaking.
The Committee is expected to present its outcome for implementation by April 2018.