Opinion: The “Outrage” About Data Tariff Increase

Posted on November 30, 2016

MUSA MBAHI

mobile-phone-users

So the Tariff we pay on data usage will “increased” effective December 1st, 2016; and based on “noise” on the Nigerian social media, it is as if the Nigeria Communications Commission (NCC), and by extension, the Buhari Administration moved in at night and assassinated all first born males in some families.

Surprisingly, the apparent outrage emanates even from minds that I consider brilliant and, I should think would know better: Brilliant young minds that I know supported and even actively worked hard to install this government.

To this group that I know mean well, and are rooting for this government to do well, my intent for this opinion is to point out, what in my opinion, informed the decision – if peradventure, you had not looked at it from that perspective.

To the “Wailing wailers”, who will see absolutely nothing done by this government as being right; and are rooting for the government, and by extension, Nigeria to fail, this opinion is not for you.

I should advice that you hop along, find another wailing forum.

I took the time to look up the reasons proffered by NCC for the directive. It sounds very reasonable. And frankly – ultimately, it will be to the betterment of our collective data usage experience.

But surprisingly, in all the “noise” I have heard/”seen”, only one person (I think the individual is a Lawyer) used the appropriate word that informs the decision: ANTITRUST.

I believe that NCC is being proactive to forestall clear case of antitrust violations by the big 3 or 4 Telcos that could lead to unhealthy price wars which will ultimately lead to “crowding out” of smaller operators, less competition, and monopoly with its attendant negative effect on quality of service.

To illustrate this point, I will presently give the following apt example: Those familiar with the happenings in the United States in the late 1990s/early to mid 2000s will know the ubiquitous presence of a “discount” store called WALMART.

It is reputed to be the largest retail store chain in the world, and at one point, it employs about 1.3 million Americans – most of them minimum wage!

How did WALMART acquire this market share? Predatory behaviour!

They will move into a neighbourhood, plant a large store that provide everything under one roof, drop prices to rock bottom levels. The local “mom” and “pop” stores (or local small businesses that is responsible for over 80% of US economy) who have been in the neighbourhood for several generations (and have been paying good living wages to its workers) invariably cannot compete with WALMART. Therefore, they close down.

And as soon as they drive out any and all competition, what does WALMART do, they push up their prices. And by that time, the neighbourhood/community is captive. They have no alternative than to patronise whatever service WALMART offers. And at whatever price!!!

Communities later wisened up to the devastation WALMART was visiting on them, and started to fight back. Any where WALMART tried to go in, communities say no, but no thank you.

State governments then cracked down on WALMART. Labor unions descended on it!

WALMART had to change its behaviour somehow.

Now lets get back to our subject of discussion with the above illustration in mind.

The current Tariff charged by the big 4 Telcos for data per megabyte are: MTN- 0.45 K; Glo- 0.21k; Etisalat- 0.94k and Airtel- 0.52k; and I do not need to tell anybody who has used data in Nigeria how crappy, useless the service quality is.

For example, in my house whenever I am in Abuja, Nigeria, I cannot access Glo data network period! MTN is at best epileptic. And I don’t want to even mention Airtel. Etisalat is medium ok, but expensive with a lot of hidden charges. And I had to bear this crappy service grudgingly because I had no alternative

But by act of providence, while complaining, somebody mentioned SMILE network to me. I tried it, and I cannot be happier!

They are fast, 4G and, all things considered, have good value for money. They charge 0.84k/mb for data. And you can get it at cheaper depending on the data plan you elect.

I know for fact, in my experience that SMILE network has better service quality than MTN, GLO, and AIRTEL. The only one of the big four that comes even close is ETISALAT and what is the moral? ETISALAT charges approximately the same high price as SMILE network.

Based on this, it is easy to see that MTN and GLO are, more likely than not, selling service at below cost with the intention of driving out competition – Just like WALMART in the example I illustrated above.

Remember, already MULTILINKS and STARCOMMS have been muscled out by these big four. THAT IS ANTITRUST VIOLATION.

And, at the risk of sounding impolitic and “insensitive”, the PMB government, through the NCC is right to proactive step in and mandating a interim new “Floor plan” of 0.90k/mb pending: “FINALISATIOM OF THE STUDY ON DETERMINATION OF COST-BASED PRICING FOR RETAIL BROADBAND AND DATA SERVICES IN NIGERIA”

We cannot eat our cake and have it folks!

We cannot complain that our data/telecom services are poor, while right under our noses, this big telecommunications companies are providing us crappy services, and killing off competition; and the appropriate regulatory agency steps in proactively, yet we complain!!!

Haba! What type of people are we?

I believe, if the NCC does not step in now, MTN, GLO, AIRTEL, ETISALAT will kill off all competition, continue to provide the useless service they are providing – and still increase the Tariff anyways! And there is nothing you or me can do about it.

Yes, things are hard currently in Nigeria. I am not insensitive to that. But we cannot ask for good services comparable to anywhere in the world and think we should not have to pay for it.

Like I said a few days ago on a thread during a heated discussion: “Government does not owe us anything but Security of life and Property; with equity and fair play”.

Anything else, we will have to pay for it.

Folks, forgive me if I sound insensitive on this but truth need be told. No matter how bitter.

musa