NCC: Competition, National Broadband Plan, critical for proper pricing

Success Damian

Nigeria Communications Commission (NCC), the nations’ telecommunications regulator, has stated that the Commission’s mandate of creating an enabling environment, promoting fair competition in the telecoms industry and the strategic objectives of the National Broadband Plan, are reasons to develop a proper pricing structure for broadband in Nigeria.

The Executive Vice Chairman of NCC, Prof. Umaru Garba Danbatta disclosed this at the Stakeholders’ Forum on the Study for the Determination of Cost Based Pricing for Retail Broadband and Data Services in Nigeria which was held at Digital Bridge Institute, Lagos State on Tuesday.

Dambata said appropriate pricing apart from ensuring affordability and availability of Broadband, it would also ensure fair competition by checking price discrimination, excessive pricing, predatory pricing, margin squeeze and price fixing amongst other things.

He said 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.

“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, 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,” Dambatta stated.

According to Dambatta, areas of focus for the study include to determine the appropriate cost modeling technique and methodology to be adopted; appropriate pricing regulatory measures to be adopted; need for ex-ante and ex-post regulation with respect to pricing in the retail broadband and data market segments; 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 macro-economic, technology and technical relevant factors.

Expected result from the findings include 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.

“Consistent with the Commission’s principle of ensuring participatory regulation, this Stakeholders’ Forum is held not only to formally introduce the Project Consultant to Industry Stakeholders but also to formally kick-start the project.  You will agree with me that the supply of relevant network and industry statistical data is most critical to the success of determining appropriate cost based pricing for Retail Broadband and Data Services for the Telecommunications Industry. Therefore, your prompt response in providing accurate data required for this Study is essential,” Dambatta said.