The Nigerian Communications Commission (NCC), on Monday, said arrangement had been concluded to unveil new pricing cost for wholesale fix transmission service providers in the telecommunication industry.
The Commission expressed optimism that the new pricing will accelerate the broadband penetration through making transmission links competitive and affordable to end users across the country.
With the new pricing model, NCC said consumers will be able to afford data in the long run, adding that there is need for a level playing field for all operators in the segment.
Speaking at a stakeholders’ forum in Abuja, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, said, research carried out by KPMG in conjunction with telecommunication operators revealed that the old wholesale fixed pricing has been excessively discriminatory and arbitrary among industry operators and users.
Danbatta also explained that investigation carried out by a project team constituted by NCC, which included MTN, Glo, Airtel, MainOne, Phase3Telecom and market operators, revealed that there was excessive pricing of fixed transmission link which has raised a lot of concern in the sector.
He said: “The study revealed that wholesale and retail customers in the transmission market capacity in the country were excessively high and not reflective of cost.
“Specific examples were situation in which bandwidth prices for route between Lagos and London was lower that between Lagos and Kano or Port Harcourt. Another issue that was identified was the issue of discriminatory prices of transmission links. It was observed that pricing was not based on cost, distance or any particular formula.”
According to him, statistical report by the International telecommunications Union (ITU), indicated that broadband penetration between 2014 and 2015 is still low, adding that modalities had been put in place to increase the penetration rate by 30 percent before 2018.
The NCC boss said: “ KPMG was hired to conduct and develop a comprehensive cost model using data collated from operators in the transmission cable market and draw inferences on the cost of providing transmission services in Nigeria and the transparency and competitiveness of pricing in the transmission markets.”
He said the study on the determination of cost based pricing of fixed transmission services will set the pace for effective competition in the wholesale leased lines transmission capacity market in the telecommunications industry.
In a remark, the Chief Marketing Officer of Broadbased Communications, Mr. Chidi Disu, argued that new pricing model did not take into consideration current situation in foreign exchange rate market and the depreciating value of the Naira, adding that implementing the new model by NCC will force lastmile operators out of business.
According to him, the different prices on the Right of Way, by the different states is also not helping operators, adding that the Federal Capital Territory (FCT), for example has increased the cost of RoW by 35 percent.
