Addressing high cost of data in Nigeria

Calls for the reduction in the cost of data recently reached high tempo as the coronavirus crisis forced many to rely on the internet. While the Ministry of Communications and Digital Economy has been playing an advocacy role in this regard by calling for the price reduction, there is a need to address several other factors adding to the cost of telecommunications service in the country. SAMSON AKINTARO reports

The Minister of Communications and Digital Economy, Dr. Isa Pantami, recently advised telecommunications operators in the country on the need to reduce the cost of data.
The latest call from the minister was hinged on the fact that some states are now reducing the cost of Right of Way.

But for the operators, there are lots of other factors that must be addressed to make a reduction in data cost a reality.

While the telecommunications subscribers are complaining that the current data price regime is high, the service providers had, last year, complained that the competition among themselves had pushed down the cost to unbearable level for them and were pushing for an increase.
One way they sought to achieve that was by calling for a restoration of data price floor by the Nigerian Communications Commission (NCC), which will put a cap on the minimum price an operator can charge for data access.

Is data cheap in Nigeria?
It may be argued that data is inexpensive in Nigeria because the cost of data seems cheaper when compared to data prices in countries like South Africa and Kenya, but according to Alliance for Affordable Internet (A4AI), the price of 1GB of mobile broadband data should not be more than two per cent of monthly income.

Applying this to the new minimum wage of 30,000 in Nigeria, it means the cost of 1GB data should not cost more than N600. That also goes to say that when the minimum wage was N18,000, data subscription of 1GB should only cost N360.

However, that’s not the case in Africa’s biggest mobile market. In Nigeria, the official average rate of 1GB data monthly subscription is N1,000. Subscribers sometimes spend more monthly due to the usual complaints about data rip off.
Undoubtedly, this is too expensive for any Nigerian whose monthly income is not more than N30,000.

According to a report by Quartz Africa, data prices in Nigeria need to drop by 97 per cent to be affordable for the majority of the country’s population.

Data as a necessity
More than ever, mobile data has proved to be a necessity. The need to gain access to the internet becomes increasingly important daily because of its endless benefits and attractions.
The awesome possibilities of having access to the internet can’t be over-estimated. The internet has brought about new businesses, improved productivity, and reaching out to family and friends thousands of miles away is no longer what it used to be in the past.

With mobile data or Wi-Fi, one can sit in the comfort of the home and have a family meeting with kins in other parts of the world. One can get the basic needs like foods, drinks, and clothes without stepping out of his comfort zone, and more recently, the person can hold business or academic conferences from remote locations with the enablement of the internet.

Today, mobile data and Wi-Fi connectivity are becoming indispensable to our daily lives as the bulk of the world population now depends on the internet for survival.
Aside from the basic needs to survive, data has become so vital that it has been compared to air and water, above food and shelter.

COVID-19’s reality
Before now, the claim that data is life may sound exaggerated, but the outbreak of COVID–19 and its attendant effects tend to have attested to the belief that where there seems to be no life, data could give you much more to stay alive in this information-driven world.
The effects of the lockdown in most parts of the world were largely mitigated as physical contact reduced, remote contact via the internet increased exponentially.

These have led to a new culture where hitherto physical presence was invaluable but the internet spurred by the policy of social distancing ensured that critical policy issues were conveyed through video conferencing, chats, and voice notes.

In a bid to cope with the COVID-19-enforced lockdown and the stay at home order by the Federal Government, Nigerians reportedly spent more time online and more money on mobile data since the enforcement of the lockdown measure started in April.

According to a report, the first four weeks of the stay-at-home order saw a 15 per cent increase in internet services in the country as individuals, corporate bodies, and religious organisations increased their use of the internet services.

Also, the obvious increase in social media interactions and the proliferation of the Work-From-Home (WFH) phenomenon during the lockdown spurred data traffic growth across the country.

Subscribers’ complaints
However, while Internet Service Providers (ISPs) and Mobile Network Operators (MNOs) laugh all the way to the bank as a result of a boom in their revenues, mobile data subscribers are left to complain about snail-speed data services and data depletion.
With over 100 million internet users, Nigeria ranks 8th among the top 20 global internet users and over 80 per cent of the internet traffic in the country originating from mobile devices.

This means Nigeria is Africa’s biggest mobile market yet, complaints about the cost of data and poor internet services are rife in the country. An average monthly unlimited data plan cost as much as N10,000.
Apart from the high cost of data, it’s also very common to hear complaints about poor connectivity, fast data depletion, and inability to roll over unused data.

The usually touted unlimited data is usually limited to the extent of usage when speed reduces and data depletes before the end of what was supposed to be a monthly subscription, usually in the middle of the month or after some gigabytes might have been used.

The OTTs factor
However, it is imperative to note that one of the factors responsible for the exorbitant cost of data and low quality of service in Nigeria, according to African Academic Network on Internet Policy, has to do with the “activities of Over The Top (OTT) Operators such as Facebook, WhatsApp and other social media networks, which provide for messaging and call facilities via the internet.”

For example, Whatsapp allows users the functionality of text, voice, and video calls.
With this functionality, users with mobile data subscriptions do not need to patronise mobile network operators for airtime again.

Putting it into perspective, talk time per N100 is 14 minutes excluding messages and other special packages, therefore a N1,000 worth of recharge card will give 140 minutes of airtime (2.3 hours).

But on Whataspp, one minute call will consume 300kb of data on 3G and 1Mb on 4G network. Therefore, at N1,000 per 1GB, a 3G network user will get 3,000 minutes of airtime (50 hours) while a 4G user gets over 1,000 minutes of airtime, which is a little above 16 hours.

With revenue from voice calls dwindling as a result of the OTT services, the operators are pushing their data offerings to recoup what is being lost in voice revenue, hence, the price tag.

According to the President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Olusola Teniola, the growing number of data subscriptions has not yielded commensurate value for the operators in terms of revenue.

High operational cost

Operational costs have also been argued to be another justification for the expensive cost of data in the most populous country in Africa.

Recently, it was reported that telecoms tower maintenance costs increased to 104 million dollars per month.

The costs, according to the report, include the cost of diesel, cost of generator and generator parts, security for the lives and equipment present at tower sites as well as payment of non-legalised levies and vandalism.
Until recently when some states started reducing the Right of Way charges in compliance with the Federal Government’s recommended N145 per linear meter, the service providers have been battling with the high cost of RoW, which is also passed to the consumers. With about seven out of 36 states bringing down the cost, the challenge of RoW cannot be said to be over yet in Nigeria.

Last line
No doubt, data subscription at N1,000 per 1GB is a luxury many Nigerians cannot afford and this has to change.

To accelerate the economy and bring about the ease of doing business especially for SMEs, which constitute over 80 per cent of total employment in the country, Nigeria needs to make data affordable to all.


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