MEF CEO Dario Betti shares an update on recent changes to mobile regulation in Nigeria, where interventions on pricing and tariff regulations for mobile services are working to reshape the burgeoning mobile market.
The Nigeria Communication Commission (NCC) has seen various significant regulatory changes in recent years, addressing aspects spanning pricing, identification of SIM’s, spectrum licensing, consumer protection, infrastructure security, investment promotion, and broadband penetration. These are shaping the developing telecom market in the country. The Nigerian telecom market was valued at $8.9 billion in 2023 – data from Market Research Future. It’s projected to grow to $13.887 billion by 2032 (with a CAGR) of 5.20% from 2024 to 2032).
First, the NCC has created one of the most detailed interventions on pricing and tariff regulations for mobile services. The NCC released the “Guidance on the Simplification of Tariffs in the Nigerian Communication Sector” on July 29, 2024. This new regulation aims reduce the complexities for telecom tariffs and bundles to ensure greater transparency in tariffs. It aims to streamline the existing tariff plans, making them less complex, more transparent, and easier for consumers to understand by unbundling promotional elements, Add-Ons, and bundles from standard tariff plans, and by emphasizing transparency and consumer protection.
Unbundling Promotional Elements from Tariff Plans
One of the most significant requirements under the Guidance is the unbundling of promotional elements from standard tariff plans. MNOs are now required to offer promotional elements, such as bonuses on voice, SMS, data, or value-added services (VAS), as standalone promotions that must first receive NCC approval.
This new regulation aims reduce the complexities for telecom tariffs and bundles to ensure greater transparency in tariffs. It aims to streamline the existing tariff plans, making them less complex, more transparent, and easier for consumers to understand.”
Promotions will now have clearly defined time limits, quality of service (QoS) requirements, and must be fully disclosed in terms of their benefits and limitations. The Guidance requires that all MNOs maintain existing bonus-led tariffs only until December 31, 2024, giving them time to migrate subscribers to simpler, NCC-approved tariff plans.
MNOs are permitted to retain a single bonus-led plan for new subscribers, but subscribers can only remain on these plans for six months before migrating to a standard tariff. If subscribers fail to select a new plan, they will be automatically migrated to a default tariff plan.
- Unbundling of Add-Ons from Tariff Plans: VAS content, roaming packages.
The Guidance also distinguishes between Add-Ons, which are optional services such as premium content subscriptions, roaming packages, or enhanced customer support, and regular tariff plans. While subscribers can opt for these services at an additional cost, MNOs must ensure that subscribing to Add-Ons remains optional and requires informed consent from the user.
The regulatory framework ensures that consumers retain full control over which Add-Ons they purchase without being forced to change their underlying tariff plans. Free Add-Ons are considered promotional offerings and, as such, require prior NCC approval. This provision aims to ensure that all Add-Ons are properly disclosed, and customers are aware of the charges or benefits they are opting for.
- Limiting the Number of Tariff Plans, Bundles, and Add-Ons
To reduce market fragmentation, the NCC restricts the number of plans and bundles that each MNO can offer. Each operator is allowed a maximum of seven tariff plans and 100 bundles. However, there is no cap on the number of Add-Ons that a subscriber can opt for.
MNOs are also required to introduce a mechanism that allows customers to easily check how many Add-Ons they have subscribed to, using USSD strings or SMS. This transparency ensures that consumers are not overwhelmed by excessive Add-Ons and that they can manage their subscriptions more effectively.
- Removal of Access Fees and Simplification of Pricing
The Guidance also mandates the removal of access fees and ‘asymmetric’ fee structures. This step aims to eliminate hidden charges and ensure that all tariffs are clear and straightforward. MNOs must offer standalone data bundles at fair prices to ensure that consumers are not tied into services they do not need such as voice bundles.
- Application for Tariff Plans, Bundles, and Promotions
MNOs’ must now submit applications for new tariff plans, bundles, or promotions to the NCC through a designated online portal. These applications must include a detailed description of the proposed plans, pricing, terms, and conditions. While no application fees are required for new tariffs, modification fees will apply for any changes or updates to previously approved plans.
Any MNO seeking to introduce new promotions must submit a proposal outlining the terms, duration, and compliance with QoS and capacity requirements for prior approval by the NCC.
Blocking of unidentified SIM’s in 2024
The NCC instructed mobile operators to block sim cards of telephone subscribers who haven’t linked their National Identification Numbers (NINs) by February 28, 2024.
The move was based for “critical national security” as well as “the commission’s commitment to promoting local content development in the telecom industry, ensuring consumer rights protection”. The directive though has stirred a complex landscape of implementation challenges and consumer concerns. One notable challenge lies in the sheer scale of the task. With millions of subscribers nationwide, the process of ensuring each SIM is properly linked to a unique NIN poses a logistical challenge for operators. Moreover, technical challenges have surfaced, ranging from system integrations to potential server overloads. The surge in users attempting to link their SIMs to NINs has strained the infrastructure, leading to occasional system downtimes and slower processing speeds. This technical strain, in turn, has raised concerns among consumers about service interruptions and delays in resolving their SIM-NIN linkage.
The timeline set by the NCC for the implementation of the directive has also added pressure.
Harmonised Short codes
A key directive from the NCC recently has implemented an Harmonized Short Codes Registry, ensuring a uniform platform for all of the 224 million mobile users, enhancing accessibility across networks. The same codes can be access services across all networks.
A summary of other regulatory activities in Nigeria.
- Licensing Additional Spectrum for Expanded Network Capability: NCC has licensed additional bands for telecom operators. This includes the NCC’s plans to license more spectrum in the 3.5 GHz range for 5G deployment. Airtel Nigeria also purchased a 5G spectrum and additional spectrum for its 4G network, for a complete sum of $316.7 million
- Enhancing Infrastructure Protection: The NCC has disclosed information about more than 50,000 incidents of vandalism against communication infrastructure over a period of five years, demonstrating a need for stronger protection regulations
- Boosting Broadband Penetration: The NCC aims to enhance the broadband penetration rate from 45% in August 2023 to 70% by the end of 2025 to accommodate advancements in digital services and demand. Primarily, broadband subscriptions hinge upon 3G and 4G networks, constituting 44.5% of the total broadband subscriptions, and there’s a strategic plan to escalate this to 70% by 2025.
- Increasing Investments in Telecommunication Sector: The NCC encourages more investments in the data centre segment and it aims to increase the telecommunication sector’s contribution to GDP to 22% by 2027, currently estimates give telecom as 13.5-16% of GDP for the country.
