NCC plans to Simplify Telecom Tariff Plans imitating India (TRAI)

The Nigerian Communications Commission (NCC) is embarking on a transformative endeavor to simplify Nigeria’s telecom tariff environment by consolidating the present 369 tariff levels into a more manageable and consumer-friendly framework. This strategy, which aims to empower customers to make informed decisions, is scheduled to be fully completed by December 31, 2024.

Tackling Complexity in Tariff Plans

Nigerian telecom subscribers currently face a complex maze of tariff plans, many of which are promotional offers that have been converted into permanent plans. These promotions now account for a sizable portion of available options, which frequently causes consumer confusion. Recognizing this, the NCC imposed a limit of 100 bundles and seven distinct tariff options per operator.

This reform draws inspiration from India’s Telecom Regulatory Authority (TRAI), which in 2004 limited telecom operators to a maximum of 25 tariff plans. 

The TRAI measure drastically improved the transparency of bills and eased consumers’ choices. Citing the TRAI in a statement “The major reason for initiating this consultation process was that the service providers have been offering a large number of plans, and there were reports that this was confusing consumers and affecting their ability to make informed choices,” he goes on to explain why they initiated the appraisal in 2004.

The NCC’s Simplification Guidelines

NCC’s “Guidance on the Simplification of Tariffs in the Nigerian Communications Sector” is meant to be a broad guideline to discourage complexity in the various tariff plans. It mandates operators to offer clear, understandable, and complete information about their programs, such as billing rates, terms, and conditions. 

Aminu Maida, the NCC’s executive vice chairman, indicated during the 93rd Telecoms Consumer Parliament that the initiative’s primary goal is to empower subscribers. “To address tariff complexity, the NCC released a Guidance on Tariff Simplification, requiring operators to offer clear, understandable information on data plans and pricing. “This transparency will enable consumers to make more informed decisions about their data usage and billing,” Maida said.

Telecom companies will have to prepare consumers well-emphatic tables covering every tariff plan available, and outlining their cost and availability.

The Effects of Promotional Deals

Promotions have caused a lot of confusion for the consumers. An official of the NCC said that there is a typical case where users do not even know they have a promotion that concludes into a full changeover of rates with a higher billing.

“For example, someone subscribes to a promotion guaranteeing three times the value, but they are unaware that the promo is charged at a higher rate than their regular plan. This causes anger because their airtime depletes faster than intended,” the official noted. 

To solve this issue, the NCC requires that all bonus allowances, whether voice, data, or SMS, adhere to specified pricing floors and restrictions. Operators must also express bonus terms in precise units, such as in naira, minutes/seconds, or gigabytes/megabytes, to ensure transparency.

Consumer Protection and Education

The NCC standards do not end on tariff simplification only. The tariff plans could be altered only after subscribers are notified at least 30 days in advance to such changes. Moreover, they have to offer such options to the consumers whose interests are likely to be affected by such alterations.

The commission has also directed operators to develop extensive consumer education programs. These ads are meant to help subscribers understand the new pricing model and what services are there within, so that they are able to make reasonable choices.

The chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, commend central bank’s measures taken by NCC. He increased emphasis on tariff simplification arguing that it would enable the customers to choose those bundles effective for them in terms of their requirements and budget.

“With simplified tariffs, the consumers are more empowered to select data packages that are best suited for their needs and their budgets and usage as such facilitates them in taking charge of their data experience,” Adebayo explained to the gathering. 

Broader Implications for the Telecom Sector

The NCC Initiative is not a bed of roses. The issue of vandalism and theft of telecommunication infrastructure has been a big let down for the sector, with the losses estimated to reach N23billion in 2023 alone. According to them this situation has become quite concerning and they are solemnly trying to create authority to defeat this phenomenon. 

Not only acts of terrorism but also low quality of products and services become an obstacle for the strong provision of services. 

Telecom service providers have also been affected by the high cost of living and have limited ability to expand their networks due to high costs. MTN Nigeria had a capital expenditure of N217.64 billion which is a 27.79 decrement while airtel expenditure was at149 million dollars for the first nine months of the year 2024 which is a 36.59 fall. 

On the other hand the NCC has ensured these companies go by the rules which govern them and go by the Key Performance Indicators (KPI’s) detailed in their policies regardless of the challenges they are facing. The new balance of STOP has to be modelled and there has to be no compromise on service afterwards particularly during price increases.

Increasing Transparency through Partnership

The success of the NCC’s effort in uncomplicated tariffs will rest heavily on the participation of telecom operators and other stakeholders. With this partnerships, the commission hopes to achieve a transparent and consumer-friendly telecommunications.

For telecom carriers this is also expected to enhance competition resulting in constant product enhancement for better user satisfaction. As companies seek to comply with these requirements, they will have to balance consumers’ needs and what will make the company viable.

Future Outlook

It is expected that the NCC’s plans with regards to telecom pricing plan is set to reshape the sector as it is targeted at making the sector more easily comprehensible by the consumers within the general population. By narrowing down the range of tariff offers and providing clear information to the consumers, the commission seeks to manage dissatisfaction and anxiety.

With the coming of the December 2024 deadline, they are made to adjust their payments so they correspond with the NCC’s own set of rules and standards guaranteeing subscribers a hassle-free process.

This ambitious project demonstrates the NCC’s commitment to safeguarding consumer rights while also encouraging a competitive and creative telecoms industry. 

Through these initiatives, the NCC is setting a pattern for regulatory change in the industry, establishing Nigeria’s telecom sector as a global example for transparency and customer empowerment.