25 January 2013

Nigeria: NCC Sets New Price Cap On Text Messages

The Nigerian Communications Commission (NCC) has set a new price cap for Short Message Service (SMS) across networks.

The new price cap is N4.00 per SMS for all domestic off-net SMS with effect from February 5, 2013.

The new price cap is a 60 per cent reduction from the former price that was N10 per SMS for off-net and N5 per SMS for on-net text messages.

In technical parlance, off-net SMS are text messages sent from one network to another network, while on-net SMS are text messages sent by a subscriber to another subscriber on the same network.

According to NCC, the directive to this effect, was communicated to the operators since January 3, 2013.

Director, Legal and Regulatory Services of NCC, Ms. Josephine Amuwa, who signed the directive, explained that the commission would not place a price cap on international SMS at this time.

According to her, NCC arrived at the new price cap after due considerations of the submissions made by the operators at various consultative meetings.

"Having evaluated and analysed SMS traffic information provided by the operators, 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,"Amuwa said.

Telecoms operators had proposed a price cap ranging between N5-10 per message for off-net SMS, and had urged the commission not to set a price cap for international SMS due to the fact that interconnect rates for international SMS were outside their control as it is terminated through international carrier service providers in various jurisdictions.

Amuwa said "based on these considerations, and in the interest of striking a balance between sustaining operator's profitability and ensuring consumer satisfaction, and also in accordance with the powers conferred on the commission under Sections 4 and Chapter V11 of the Nigerian Communications Act (NCA), 2003, the commission took its decision in the interest of subscribers and the operators."

Part of the NCC's decision on the new price cap is that the commission henceforth sets a price cap of N4.00 for off-net SMS. The new rate shall be implemented within 30 days from the date of the directive. The commission will not place a price cap on international SMS at this time but would encourage operators to work towards lowering the cost of International SMS.

The directive informed operators that the NCC would monitor compliance by the operators, and noted that failure to comply with the determination would be penalised as provided by section 111 of the NCA 2003.

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