It is imperative to develop proper pricing structure for broadband – NCC

 The Nigerian Communications Commission (NCC) has said it is imperative to develop a proper pricing structure for broadband and data services in Nigeria. The Executive Vice Chairman of NCC, Prof Umar Garba Danbatta stated this at the Stakeholders’ Forum on the Study for the Determination of Cost Based Pricing for Retail Broadband and Data Services in Nigeria held in Lagos last week. He said the affordability and accessibility of broadband services is largely determined by the prices that are charged for those services, adding that ensuring that prices charged for retail broadband and data services are cost based in line with international best practice is critical to the deployment and uptake of broadband and data services in Nigeria. He said the Nigerian Telecommunications Industry has undoubtedly recorded significant growth over the years and the impact and benefits that come with this growth cuts across every segment of the Nigerian economy and the lives of its citizenry. He said: “Whilst the Commission is happy with this phenomenal growth recorded in the industry, especially in active voice subscriptions, we believe that the next critical phase is to ensure that everyone – wherever they live, and whatever their circumstances – have access to the benefits of broadband and this can only happen with the pervasive deployment of broadband infrastructure and services across the country considering the potential of broadband as a key enabler of national productivity, economic growth and development, social inclusion and cultural enrichment. “Whilst addressing market dominance issues in the upstream wholesale markets is one of the ways to facilitate competitive price levels in retail broadband access and service markets, it is possible that such action may not be a sufficient constraint on pricing in all segments of a retail broadband market, as such some form of ex-ante regulation of retail prices is appropriate or even necessary.” In line with the Commission’s mandate of creating an enabling environment and promoting fair competition in the telecoms industry and in line with the strategic objectives of the National Broadband Plan, he said it has therefore become imperative to develop a proper pricing structure for broadband in Nigeria. “This will not only ensure the affordability and availability of Broadband but also ensure fair competition by checking price discrimination, excessive pricing, predatory pricing, margin squeeze and price fixing amongst other things”, he added. He said this has necessitated the conduct of the Study on the Determination of Cost Based Pricing for Retail Broadband and Data Services Nigeria. To this end, the Commission, carried out a thorough selection process and appointed Messrs’ KPMG to, amongst other things:

* To set guidelines for the regulation of the pricing of retail broadband and data services in Nigeria and specifically determine Price cap and floor where necessary;

* To develop a regulatory pricing model based on the peculiarity of the Nigerian broadband and data services market coupled with international best practices;

* To design the framework for collation of data that will be used for the Determination;

* To determine the appropriate cost modeling technique and methodology to be adopted;

* To determine the appropriate pricing regulatory measures to be adopted;

* To determine need for ex-ante and ex-post regulation with respect to pricing in the retail broadband and data market segments;

* To develop a suitable definition of big and new entrant/small operators, if necessary;

* To conduct a general assessment of the retail broadband/ data market segment with a view of determining the appropriate methodology to be adopted; and

* To design a cost model that is suitable for determining retail prices for broadband and data services taking into cognizance the macro-economic, technology and technical relevant factors.