The Nigerian Communications Commission (NCC) is moving to simplify more than 369 existing telecoms tariff plans to help consumers make informed decisions.
Drawing inspiration from India’s Telecom Regulatory Authority (TRAI), which in 2004 restricted telecom operators to no more than 25 tariff plans to enhance billing transparency, the NCC aims for a similar transformation.
“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 said in 2004.
In reference to India’s plan, the NCC said it has become imperative to cap tariff plans.
“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,” the NCC noted.
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The NCC’s ‘Guidance on the Simplification of Tariffs in the Nigerian Communications Sector’ outlines a cap of seven tariff plans and 100 bundles per operator, effective on or before December 31, 2024. This move, initiated in July, seeks to reduce tariff complexity and promote clarity.
According to the NCC, a significant proportion of tariffs today were once promos that telcos 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 will empower consumers to make better-informed decisions about their data usage and billing,” Aminu Maida, executive vice chairman of the NCC, explained during the 93rd Telecoms Consumer Parliament.
He noted that operators will implement this guidance in the coming months, presenting consumers with tables detailing their tariff plans, billing rates, and all terms and conditions.
Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), emphasised the benefit of simpler, more transparent data plans.
“With simplified tariffs, consumers can make more informed choices about which data packages best suit their needs, budgets, and usage patterns, empowering them to take control of their data experience,” he said.
One major concern for the NCC is the confusion caused by the difference between tariff rates for promotional and regular plans. “In some cases, operators apply different effective tariffs to bonus accounts, resulting in different tariffs for the main account and bonus account. This information is not communicated to consumers, which may lead to uninformed decisions,” a NCC document noted.
“What happens is that someone subscribes to a promo that promises them three times more. 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 explained.
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To protect consumers, the NCC wants all bonuses to comply with established price floors and caps, with clear advertising of bonus allowances (voice, data, and SMS) in specific terms, such as naira, minutes/seconds, or gigabytes/megabytes. Operators must also notify customers of any changes to their tariff plans at least 30 days in advance and offer alternative options.
Operators have now been saddled with implementing consumer education campaigns to inform subscribers about the current tariff simplification plan and help them make informed choices.
In addition to its tariff simplification agenda, the commission wants telcos to adhere to Key Performance Indicators (KPIs) outlined in its Quality of Service (QoS) regulations. Any degradation in service quality due to tariff changes or promotions must be addressed immediately.
However, Maida of NCC noted that challenges such as vandalism and telecom asset theft—which cost an estimated N23 billion in 2023—continue to frustrate efforts to maintain service quality.
He also noted that current macroeconomic challenges and the rising cost of business in the country are impacting operators’ ability to invest, which may impact QoS.
Recent data from the financial statements of MTN Nigeria and Airtel Africa revealed reduced investments in network infrastructure. MTNN’s spending fell by 27.79 percent to N217.64 billion, while Airtel Nigeria’s capital expenditure declined by 36.59 percent to $149 million in the first nine months of 2024.