Nigeria: NCC wants to introduce Price Cap on call charges

Telecoms

Acting Executive Vice Chairman of the Nigerian Communications Commission Engr. Stephen Bello has announced the intention of the Commission to reintroduce a price cap regime in the telecom sector, while also maintaining that plans by the Commission to begin the registration of SIM cards will commence on May 1, 2010, with a process for the new SIM cards. Engr. Bello who spoke to journalists in Abuja said price cap regime which has existed at the inception of mobile phone services is one of the issues that the Commission will tackle soon to ensure that operators operate within a bar relative to interconnect rates. "In 2001 when GSM started, we said that nobody should charge above fifty naira per minute and that was many years ago. "Now we have the fact that the number of lines has increased, there is economy of scale and you know that as you have advantages of economy of scale the unit price comes down. We believe that the competition in the industry will control prices, nevertheless the situation may arise in which people sometimes cooperate and try to maximize their profit. "Therefore, we in NCC have developed a policy we refer to as price cap regulation where we give a price and the competition can make you to operate within this degree of freedom, but not beyond it", he said. He also said there are many methods of regulating prices in the industry but the current Government policy is that the Commission will not be engaged in direct price control as existed the seventies when government published price caps on commodities. "We have recently reviewed the interconnect rates, which is the rate at which operators pay when they transfer calls amongst themselves, but these are yet to trickle down to the subscriber and we have resolved that we will need to revisit the price cap to ensure that these advantages trickle down, and we will begin the process with consultation with the operators and collection of some data to implement it", he said. On the issue of commencement of registration of SIM cards to which some operators have expressed reservations with the dateline, Engr Bello said: "Our experience in this industry has shown that operators always resist anything that will cost them extra money, even when they believe in it and they believe that its necessary because they are always looking at the bottom line, they want to maximize their profit. The same thing happened with per second billing. “We have been on this thing and we have given enough time to get ready, all the issues have been discussed, we have had many meetings so the issue of publicity we are addressing it immediately so we are maintaining our stand that SIM card registration will start on the 1st of May unfailingly”. "Nevertheless we have given a transition period during which some of the issues will be addressed and with that we believe that that cushion of three months during which we have the transition period is enough for everybody to take care of some of the delays. We still maintain the fact that SIM card registration will start 1st of May but there will be a transition period and the details of that will come out later on". Engr. Bello also reiterated that the Commission under him will not waiver in all the ongoing projects inherited from Engr. Ernest Ndukwe's regime such as number portability, SIM card registration, emergency communication projects and many others.