Operators kick as NCC pegs sms at N4

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Telecommunication firms have been directed to charge N4 for domestic off-net short messages (sms) from February 5.
Yesterday’s Nigeria Communication Commission (NCC) directive attracted mixed reactions in the industry.
The Association of Licensed Telecommunications Companies of Nigeria (ALTON) kicked against the decision, but the National Association of Telecoms subscribers (NATCOMS) welcomed it.
Off-net sms are text messages sent acrosss the networks, that is sms sent using the network of other operators. An SMS sent from an MTN line to an Airtel line, for instance, is off-net sms. Now off-net sms costs N9 and N10.
ALTON said traffic sms had been considerably reduced due to the upsurge in instant messaging platforms, such as Blackberry, WhatsApp and others.
ALTON President Gbenga Adebayo said the policy would not profit telecom firms. He lamented the situation where the NCC indulges in micro-managing commercial ventures. This is not in the best interest of the industry, he said.
The NCC directive, signed by the Director, Legal and Regulatory Services, Ms. Josephine Amuwa, according to a statement issued by Head, Media & Public Relations, Reuben Muoka, has been communicated to the operators since January 3.
But she maintained that the Commission will not place a price cap on international sms for now.
The commission, Ms Amuwa said, arrived at the new price cap after due considerations of the submissions made by the operators at various consultative meetings.
Having evaluated and analyzed SMS traffic information provided by the operators, she said the commission noted that “there was a general recognition that the cost of SMS is too high, especially in view of the interconnection rate of N1.02 (one naira, two kobo only) for SMS as determined by the commission in 2009”.
While noting that the operators had proposed a price cap ranging between N5-10 per message for Off-Net SMS, she said the operators also urged the commission not to set a cap for international SMS because interconnect rates for International SMS are outside NCC’s control.
Ms Amuwa said the commission would monitor compliance and penalise those who fail to comply as provided by Section 111 of the NCA 2003.
Adebayo said the NCC directive will kill many small and medium businesses as most of them have entered into contractual agreement with service providers before the regulator’s directive.
“SMS traffic over the last three years or when BB messenger and WhatsApp introduced free internet-based messages, which became popular, has dwindled. So, this last straw that the NCC has thrown is just to kill SMS business for service providers because the revenue there is meagre. A few people use sms and the NCC is placing a N4 price cap on it. It is very bad for our business.
“Other than the operators, there are other value adding providers who buy bulk sms and resell. This kind of directive will kill this business segement. A lot of them have existing long Contracts with the operators,” the ALTON chief said.
But NATCOMS said though the gesture was coming a little late, it was nonetheless a welcome development.
NATCOMS President Deolu Ogunbanjo said with the directive of the NCC, on-net SMS that used to attract N5 shlould now be reduced to N1, preparatory to the eventual removal of payment for all on-net SMS. “We welcome the development. Since on-net SMS attracts 50 per cent of off-net charges, the operators should reduce on-net SMS to N1 per SMS,” he said.
The President, Nigeria Internet Group (NIG), shares the same sentiment as Ogunbanjo. According to him, there are countries where on-net SMS goes for free, adding that when broadband becomes ubiquitous, the cost of telephony will crash considerably.”It is good. When broadband is available, people will be able to make Skype calls. Text messages will be virtually free because of the wide range of options that will be available to the consumers,” he said.