The Nigerian Communications Commission (NCC) has approved a 50% tariff adjustment for telecommunications operators, citing increasing operational costs and the need to ensure industry sustainability. The announcement was made in a press statement signed by the Director of Public Affairs, Reuben Muoka, on Monday.

This decision, made under Section 108 of the Nigerian Communications Act, 2003, marks the first significant adjustment to telecom tariffs in over a decade, despite escalating costs in the sector. While some operators had requested over a 100% increase, the NCC opted for a more moderate adjustment, balancing industry demands with consumer affordability.

The new tariffs will adhere to the framework outlined in the NCC’s 2013 Cost Study and the recently issued NCC Guidance on Tariff Simplification, 2024. Requests for tariff adjustments will be reviewed individually to ensure compliance with regulatory standards and to protect consumers from arbitrary charges.

The NCC highlighted that rising operational expenses have strained the telecommunications sector, making the tariff adjustment necessary to close the gap. The move is expected to enable network operators to invest in infrastructure, improve service quality, and enhance coverage, benefiting consumers across Nigeria.

In its statement, the Commission said that the adjustment, capped at a maximum of 50% of current tariffs, though lower than the over 100% requested by some network operators, was arrived at taking into account ongoing industry reforms that will positively influence sustainability.

The NCC emphasised that this decision followed extensive consultations with stakeholders from both the public and private sectors. The aim is to maintain a delicate balance between industry sustainability and the financial realities faced by Nigerian households and businesses.

Recognising the potential impact on consumers, the NCC mandated that operators implement the new tariffs transparently and fairly. Telecom providers are also required to educate the public on the revised rates and demonstrate measurable improvements in service delivery as part of the adjustment process.

“The NCC recognises the financial pressures faced by Nigerian households and businesses and remains deeply empathetic to the impact of tariff adjustments,” the statement read.

The Commission reassured Nigerians that it remains committed to mitigating the impact of these changes while fostering innovation and inclusivity in the sector.

Meanwhile, National Association of Telecommunications Subscribers (NATCOMS) had previously called for a marginal 10% tariff increase to help telecom operators cope with rising costs.

Similarly, the Association of Telecommunication Companies of Nigeria (ATCON) had urged the Federal Government to approve tariff hikes alongside investments in infrastructure.

While the approved 50% adjustment falls below the Minister’s recommended cap of 60%, it has been welcomed as a step toward stabilising the industry. ATCON advised that the implementation should be carried out promptly to enable Mobile Network Operators (MNOs) to plan effectively for the year.

NCC reaffirmed its commitment to policies that drive connectivity, support indigenous vendors, and promote the growth of Nigeria’s digital economy. As the regulator of the telecommunications sector, it pledged to maintain active engagement with stakeholders to ensure that the industry continues to be a vital driver of the country’s digital transformation.

“This tariff adjustment is seen as a critical measure to address the sector’s challenges while safeguarding consumer interests and ensuring the long-term sustainability of Nigeria’s telecommunications industry.”

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TECHDIGEST – I watch with interest an Arise Television interview where the Director General Budget Office, Ben Akabueze disclosed that the suspension of the proposed excise duty on players in the digital economy would worsen Nigeria’s revenue problems and could lead to increased borrowing.

His reaction came after the Minister of Communications and Digital Economy, Professor Isa Pantami had announced that the suspension of the proposed five per cent excise duty on telecommunications companies by the Federal Government because of apprehension it could upset the recorded progress in the information and communication technology (ICT) sector apart from affecting the poor masses.

Akabueze said that the proposed duty was embedded in the Finance Act of 2020 as a way of widening the Federal Government’s revenue base. He even claimed that he was unaware of any suspension of the proposed duty. He, therefore, warned that its reversal would adversely impact projected revenue for, and deficit in the 2023 budget, and negatively affect the budget’s general implementation.

Meanwhile, the Nigerian telecommunications industry has developed into an oligopolistic market structure. It is impossible to overstate the value of telecom airtime and data in the complex environment we live in today. Nigerians continue to suffer excruciating pain as a result of the aggressive taxation of the country’s telecom industry, which has caused network quality to deteriorate.

Telecom services such as broadband have become a necessity and without them, nothing could be done in various sectors. As such, introducing the excise duty would not be beneficial to Nigerians as the economy isn’t friendly.

Both the vulnerable poor and well-to-do Nigerians are severely taxed and pay a lot of it. The Vulnerable group in Nigeria comprises those citizens who don’t have the money and do not have the means to generate or earn income. This must be the main reason behind the general public’s opposition to the latest proposal for an additional 5 percent telecoms tax.

Consumers’ primary access point to the Internet today in many parts of the world, particularly in developing nations, is through mobile, a division of the telecoms business. Despite this, governments in many of these nations are increasingly levying sector-specific taxes on mobile service and device users as well as mobile carriers in addition to general taxes.

The widespread acceptance of the social and economic benefits connected with the telecommunications sector is believed to be limited by this, which poses a serious risk to the growth of the services among citizens.

The 5 percent excise charge will be another burden, especially for the vulnerable group of Nigerians that are barely trying to make a living by diverting into selling their products online on WhatsApp and other platforms. Nigerians can barely afford monthly subscriptions of data and nowadays data bundles don’t take us through the whole month. If the tax is now imposed how will a common man who is trying to move his business to the digital space survive?

Furthermore, students will be affected by the telecom tax, because online classes have become the norm ever since the COVID-19 lockdown. With the unending ASUU strike, most students register for online classes for academic and vocational programmes. Should government impose this tax, students will barely be able to afford data subscriptions for classes and other activities. The average Nigerian trying to see his child through school will find it difficult to afford data rates. Already the cost of living is beyond the reach of millions of Nigerians. Life is hard already, so why impose more hardship on the hapless citizens?

Many Nigerians are of the view that the Nigeria National Broadband Plan (NNBP 2020–2025), which is targeting 70 percent broadband penetration and 90 percent population coverage, will be in jeopardy. The causes are crystal clear. As stated in the NNBP, the Nigerian Communication Commission (NCC) intends to drive down the cost of data to N390 per gigabyte by 2025; hence, any new taxes imposed on telecom carriers imply that the cost of calls, data, and SMS would increase.

Stakeholders also feel that the levy could hinder technology, particularly the ability of subscribers to buy 5G-enabled devices, given that the planned deployment of 5G in the nation is currently at its most advanced stage.

In the midst of this raging issue, Nigerians have risen to applaud the Minister of Communications and Digital Communications, Prof. Isa Pantami, for standing on the side of the masses by speaking out against any attempt by agents of the government to further inflict hard life on citizens by the imposition of a new telecom tax.

Chief Deolu Ogunbanjo, president of the National Association of Telecoms Subscribers (NATCOMS), commended Pantami for protecting telecom subscribers in the case of the 5 percent excise duty.

“I am happy that our Minister is feeling our pains as subscribers. The five percent excise duty will be an additional burden to the existing burdens in the telecoms sector. We are solidly in support of the minister’s position and we, as telecom subscribers, we will go to any length to stop the planned implementation because it will not be healthy for the telecom sector,” Ogunbanjo said.

Also rejecting the proposed tax, Azeez Amida, the Chief Executive Officer of PanAfrican Towers, noted the detrimental effects of multiple taxes and fees, saying they pose a serious threat to the expansion of the Nigerian telecoms sector.

“There should be a uniform tax system, and the same should apply to fees. Taxes are essential to providing funding for infrastructure; it is important for the growth of any society. But taxing and levying businesses multiple times inhibits growth. This is where regulation is needed to streamline the tax system and other fees for tower companies.”

The proposed 5 percent excise charge on telecom services was challenged by Prof. Pantami, who seemed to detest the concept and maintain that it would harm the development of telecoms in Nigeria.

Speaking at an event In Lagos, Pantami pledged to use all legal means at his disposal to resist the proposed 5 percent excise duty on the telecoms industry operators. He criticized the timing and method of taxation of the industry, stating that it is part of the duty of a responsive government not to exacerbate citizens’ concerns.

Doesn’t it sound moral just when the government has less than a year to leave the office to now start bedevilling the poor masses with punishing parting gifts? Could it be an indirect political gimmick to empower the opposition with campaign tools against Buhari and the government of All Progressives Congress (APC) towards the 2023 elections?

Nigerians are waiting to see how the government is going to resolve this telecom tax confusion, especially given the harsh economic realities of today.

Fom Gyem writes from Wuye District, Abuja

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TECHDIGEST – The National Association of Telecoms Subscribers (NATCOMS) has announced it will be suing the Nigerian government over plans to introduce a 5% telecom tax.

NATCOM’s president, Adeolu Ogunbanjo, said the association will challenge the legitimacy of the proposed 5% excise duty on telecoms services in court.

Ogunbanjo described the proposed excise duty on calls, SMS, data, and other telecom services as insensitive decision to further impoverish consumers whose purchasing power had already been weakened.

READ ALSO: Finance Minister insists on 5% Telecom Tax

“The Minister of Finance is insisting on implementing the excise tax, this shows insensitivity particularly when the substantive minister of the affected sector is pushing back,” said Ogunbanjo even as he warned that the new tax could erode gains made in the sector.

The federal government had announced recently through the Ministry of Finance, Budget and National Planning that it would begin the implementation of the telecom tax from first quarter of 2023.

But the Minister of Communications and Digital Economy, Prof Isa Ali Ibrahim Pantami, while speaking at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo also recently in Lagos said his ministry was not consulted.

The minister warned that the telecoms tax could become counterproductive and advised that luxury items not essential services like telecom should attract higher taxes instead.

“Firstly, I have not been consulted officially and part of the rulemaking is to invite stakeholders to make contributions, I was not consulted officially. Secondly, if we have been contacted, we would have challenged the submission,” said minister.

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TECH DIGEST – Fourteen days from now, the June 30 extended deadline handed to Nigerians by the Federal Government for National Identification Number (NIN) and Subscriber Identification Modules (SIM) cards’ registration and linkage would expire.

As such, the National Association of Telecoms Subscribers of Nigeria (NATCOMs) has encouraged yet to be registered subscribers to do so within the space of time still available.

Already, feelers from the Ministry of Communications and Digital Economy are not showing possible extension, after the exercise had been extended for about four times.

It is even more serious as a new policy on SIM cards has revealed that the Federal Government will order the deactivation of all unverified subscribers off the networks.

The document, titled: “Revised National Identity Policy for SIM Card Registration,” packaged by the Ministry of Communications and Digital Economy, a part of it informed that there will be identification and deactivation of registered SIM cards with no NIN on the SIM database. The policy was recently unveiled by President Muhammadu Buhari in Abuja.

The 45-page document has given a fillip to the readiness of the Federal Government to yank-off any registered SIM but with no NIN off the network.

Speaking with The Guardian, the President of NATCOMs, Chief Deolu Ogunbajo, urged Nigerians to use the remaining days to complete the exercise.

Ogunbajo, while appreciating the FG for the extensions, however, reminded the Ministry of Communications and Digital Economy that the exercise should be made open and continuous, particularly for new SIMs.

According to him, by June 30, there should be an audit and review of the exercise since the commencement in December 2020. This, he said, would give proper assessment of exercise, “there will be opportunity to know where the challenges still lie.”

The NATCOMs boss stressed that part of the review should be that a subscriber did not have more than four SIMs per person.

On the challenges faced by students that require NIN for the Joint Admissions and Matriculation Board (JAMB) registration, Ogunbanjo appealed to JAMB and the National Identity Management Commission (NIMC) to further make the process simpler for them.

Speaking on the issue raised by some members of the National Assembly, especially the Upper Legislative Chamber, as regards not making NIN compulsory for some activities in the country, including JAMB, where it was canvassed that the FG should review the implementation of the policy, a telecoms expert, Kehinde Aluko, reminded the lawmakers that the NIMC is a body created by an Act of Parliament, that is “The National Identity Management Commission (NIMC) Act No. 23 of 2007.”

He informed that the power to enact the law by the National Assembly was derived from the Constitution of the Federal Republic of Nigeria.

According to him, the law said, “therefore every citizen of Nigeria must observe and respect requirements of all laws in Nigeria created by the National Assembly or those International laws that have been domesticated by Nigeria and other Regulations, Guidelines and Government Policies.

“This means that the NIMC Act is a validly recognised Nigerian law, binding on every person conducting business relating to the functions of NIMC or persons subjected to the jurisdiction of the NIMC (the employee, contractors, consultants, service providers, vendors, licensees, agents, Nigerian Citizens & all other people of other nationalities residing in Nigeria).”

Meanwhile, about 56 million Nigerians, as at May, now have NIN, according to NIMC. This can translate to over 190 million mobile numbers, since empirical evidence suggests that each unique NIN maps to three to four phone lines.

Findings by The Guardian showed that within the last five months of the exercise, about 16 million telephone lines have been lost, resulting in revenue losses to the telecoms operators and drop in taxes accruable to the FG.

In the new Revised National Identity Policy for SIM Card registration document, the NIMC was conferred with the power to ensure adherence to data protection policies, data backup and restoration plans, among others in the country.

The new document informed that the objectives of the data management process would include specifying data access requirements and protocols that will ensure secure access to the digital identity data; to develop fast and reliable access processes for the registration and verification exercise; to provide subscribers access to their own data, and provide an avenue for making corrections and updates where necessary.

Others are to create guidelines for data acquisition, processing and storage in line with Nigeria Data Protection Regulation (NDPR) and other relevant regulatory instruments, and to protect the national digital identity data from fraudulent and exploitative usage by any entity involved in the capturing and storage of such data, and to develop and promote the use of digital identity data for digital services across all sectors of the digital economy.

The document noted that digital identity data comprising both national identity data from NIMC and NCC SIM card registration constitute a very important asset with great relevance to the digital economy.

It stressed that the digital identity data has potential for fast growth, with its sensitivity as it holds privacy information, a robust and secure data management and protection policy must be ensured. Particularly, a strong data loss prevention and recovery plan must be instituted so that in the event of data loss, data can be recovered and restored with minimal downtime and disruption to digital services.

According to it, data management is important during the registration process as it will prevent conflicts over data quality that can arise in subscribers’ effort to revalidate their registration details.

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