Reason why NCC task big operators to raise tariffs.

Here is why NCC asked big
operators to raise data tariffs
.
.
The Nigerian Communications Commission
(NCC) has directed mobile telephone operators
in the country to jerk up data tariffs with effect
from December 1.
.
.
In a letter to the big operators, NCC said: “The
Commission has carefully reviewed all
submissions and hereby make the following
Determinations: the interim price floor for Data
Services is No.90k/MB for big operators. .
.
This rate will subsist pending the finalisation
of the study on the Determination of Cost
Based Pricing for Retail Broadband and Data
Services in Nigeria; in order to promote a level
playing field for all operators in the industry,
encourage small operators and new entrant to
acquire market share and operate profitably. .
.
Small operators and new entrants are hereby
exempted from price floor for data services;
for avoidance of doubt, a small operator is one
that has less than 7.5% of market share and a
new entrant is an operator that has operated
less than three years in the market.”
.
.
NCC is of the opinion that without a price
floor, the dominant operators can engage in
predatory pricing to drive down other
operators, meaning the industry could be
moving towards a monopoly.
.
.
A senior NCC official told TheCable that CDMA
operators – such as Multilinks and
Starcomms – were muscled out of the by the
Big Four because of their market power.
.
.
“At the rate they are crashing data tariffs, there
is every chance that they will soon kill all the
small operators and new entrants. Part of the
functions and duties of NCC is to check
monopolistic and oligopolistic behaviours in
the telecom market,” the official said.
.
.
Globacom currently charges 21k/MB
apparently because of the economies of scale
advantage, compared to Smile which charges
84k/MB, in order to break even.
.
.
Under the new tariff regime, Smile can
continue to charge 84k but Glo will have to
move up to 90k/MB – a 328% increase.