In Nigeria, where the population is expanding quickly and the telecommunications industry is thriving, it is crucial for service providers to guarantee transparency in call rates and data consumption. ROYAL IBEH explores the recent guidance for the simplification of tariff plans, bundles and promotional activities.
The past 20 years have seen a notable expansion in Nigeria‘s telecom industry. For instance, the Nigerian Communications Commission (NCC) revealed that the country had about 219 million active mobile subscriptions in Q1 2024.
Major telecom operators, including MTN, Airtel, Glo, and 9mobile, dominate the market, offering various data and call packages to cater to the diverse needs of consumers.
Despite this growth, the sector faces challenges regarding transparency in data and call tariffs. Consumers often express concerns about unclear pricing, hidden charges, and the quality of service. These issues have led to a level of lack of trust between consumers and service providers, ultimately hindering the sector‘s development.
Challenges
For instance consumers have raised the issue of complex tariff structure, (as many telecom operators offer a wide range of plans with varying costs, data limits, and validity periods), which has made it difficult for them to compare plans and choose the most suitable one.
Some users have reported unexpected deductions from their credit for services they did not explicitly request, while some have lamented poor Quality of Service (QoS), which include poor network coverage and internet speed.
Still, some consumers had complained of lack of awareness as they are not fully aware of their rights and the regulatory framework governing the telecommunications sector.
Unveiling new guidance
As effort to addressing these challenges, the NCC recently issued guidance for the telecom operators mandating them to provide adequate information to the subscribers on how they are being charged for each call and data consumed.
This Guidance is pursuant to the regulatory powers of the Commission under Sections 3, 108 and 109 of the Nigerian Communications Act 2003 (Act) as well as relevant subsidiary legislations empowering the Commission in that regard. It is also in furtherance of the mandate of the Commission to regulate communications services and ensure consumer protection in the sector.
The Guidance titled: ‘Guidance for the Simplification of Tariffs’, seeks to enhance transparency, improve consumer understanding, and foster fair competition amongst its licensees.
According to the Commission, the Guidance applies to all licensees of the Commission and its primary objectives is to reduce the complexity of tariff plans and bundles; ensure that promotional elements of tariff plans are transparent and fair; protect consumers’ interests by providing clear and understandable tariff information and promote fair competition among licensees by standardizing tariff structures.
Adequate information on tariffs
The Commission in the guidance, which took effect on July 29, 2024, highlighted that full disclosure of all tariff components and conditions is mandatory, while urging operators to ensure that all marketing and promotional materials are clear and comprehensible.
For instance, section 4.4 of the guidance said every operator is required to publish on its website, a table showing characteristics of each tariff plan and bundle it offers. “The table must display all information which is necessary to enable the subscriber to make a comparison between the offered tariff plan and others, and thereby make an informed choice.
“All advertising materials must make full disclosure of all tariff and other components applicable to the plan in accordance with the provisions of the License Conditions, the Consumer Code of Practice Regulations and the Guidelines on Promotional Advertisement.
“Other tariff communications should be presented in clear language and a user-friendly format in accordance with the provisions of the Commission’s Consumer Code of Practice Regulations and other applicable regulatory instruments,” it added.
For the USSD platform, the Commission averred that whenever a subscriber requests their account balance through the *310#, the response must include information such as Name of Plan and Validity Period (if applicable); rate per second (and rate per minute) on-net/off-net; rate per megabyte/kilobyte/gigabyte; and rate per SMS on-net/off-net.
The Commission, in Section 4.5, said operators must offer standalone data bundles, at fair prices to avoid tying consumers with products they do not need, adding that bonuses on promotions must be stated in actual value and access fees and asymmetric fee structures must be eliminated.
For all tariff plans, the Commission said both the main and bonus accounts must deplete at rates within stipulated price floors and caps; bundles with shorter validity periods should be prioritized for depletion and options for subscribers who exhaust their bundle allowance within the stipulated validity period should include purchase of a top-up bundle, purchase of a new bundle, and switch to the default rate of his/her plan.
On the number of tariff plan and bundle an operator can offer, section 4.3 stipulated that, the number of tariff plans offered per operator is limited to seven and the number of bundles offered per operator is limited to 100. “There are no limitations to the number of Add-ons a subscriber can opt-into. However, each operator must have in place a mechanism that informs subscribers of the number of Add-ons they have at the point of purchasing another Add-on. Subscribers must be able to check (via USSD string, SMS) the number of Add-ons purchased,” it added.
Consumer education
Operators must implement consumer education campaigns to inform subscribers about tariff simplification, their rights, and how to make informed choices regarding their plans, the Commission stated, adding that educational materials should be made available in multiple formats and languages to ensure broad accessibility.
“Operators must notify subscribers of any changes to their tariff plans, including migration to new plans, at least 30 days in advance. Notifications must be clear, stating the reasons for changes, the benefits of new plans, and any actions required from subscribers,” the Commission affirmed.
To ensure data transparency, the Commission, in section 6.2 of the guidance stated that operators are required to submit quarterly reports to the Commission detailing the number of active tariff plans, bundles, and promotions and reports must include subscriber uptake, usage patterns, and feedback.
On the issue of QoS, the Commission (in section 6.3) said compliance with standards and Key Performance Indicators (KPIs) set out in QoS regulations is mandatory, stating that any degradation in service quality due to tariff changes or promotions must be addressed immediately. Operators must report QoS metrics as part of their quarterly submissions, it added.
Timelines and deadlines
The Commission asserted that operators must align their offerings with this Guidance within 90 days from the date of issuance, adding that transition plans for existing tariffs must be submitted on or before 12th August, 2024.
On approval timeframes, the Commission said it will review and respond to submissions within ten working days. Tariff approval and modification applications must include comprehensive disclosure forms detailing all aspects of the tariff, it added.
Sanction
Section 6.5 addresses the issue of compliance and enforcement, even as the Commission said it will conduct periodic audits and inspections to ensure compliance with this Guidance. “Non-compliance will result in penalties, including fines, suspension of tariff approvals, or other regulatory actions as set out in the Act, related regulatory instruments and the subsisting Enforcement Process Regulations,” it stated.
The Commission however called on all Mobile Network Operators (MNOs) to apply these rules in their entirety to all retail products offered to individual subscribers (both prepaid and postpaid). Other categories of Licensees are however required to apply only the disclosure requirements and transparency template as well as the conditions for tariff approvals, it added.
