From December 1st, data prices are expected to rise because of a directive from the Nigerian Communications Commission raising the floor price for data services. So, after a very welcome period of data prices crashing, enabling more people to become connected and to benefit from the opportunities on the internet, the NCC is mandating that these prices rise.
A 1.5GB package that currently comes to N1,000, is now set to cost N3,000, levels last seen over 2 years ago.
The NCC’s justification for mandating higher floor prices is to allow new market entrants ‘compete’ with the established players.
This is nonsense for several reasons. Nigeria is in a recession with inflation at nearly 20%. Data prices are one of the few things that have not risen along with inflation. Every other thing has gone up: Food, fuel, electricity tariffs. Everything is through the roof, made worse by this government’s ruinous forex policy. Businesses are laying off staff and incomes are coming under serious pressure, or disappearing altogether.
However, you can always trust the Nigerian government to find an additional way to inflict pain on people. Nigerians are not to blame for the inability of any company who cannot compete with those prices. It is not by force to be an ISP. There are hundreds of other markets that could be more lucrative.
For a government that has made noises about protecting the poorest, raising data prices will take it out of the reach of many who advertise their services and earn income through publicity on social media and messaging applications.
All over the world, data prices are falling. Nigeria’s telcos have found ways to do same, even with all the challenges posed by the business environment. Their reward is this silly tax.
This price fixing by the NCC is at the heart of the problems Nigeria has with foreign exchange, electricity and even petrol prices. We have a government that insists it must fix the prices of things we consume. The result is that those things become more expensive.
In this case, higher data prices in a recession will affect the number of Nigerians online, and could make the telecommunications sector enter negative growth. Unlike many other sectors of the economy, growth in that sector has remained positive.
There is are two sinister ways to look at this. By raising data prices, the government is reducing the space for online participation. It is a gag by another name. After all, the more people come online, the easier it is for them to organize against any bad government.
Another conspiracy theory is that the NCC want to favour one or two specific new market players (Ntel, perhaps?) in a Dangote-style capture of the telecommunications space.
Whatever the real motive is, here is the bottom line: The NCC are mad, and we are here to tell them.