Cost studies determine telecoms service rates, says NCC chief

The Nigerian Communications Commission (NCC) says telecommunications service rates are determined through a comprehensive cost study that analyses the actual service costs.

Aminu Maida, the executive vice-chairman (EVC) of the NCC, spoke on Thursday in Abuja during an interactive session with the Nigeria Information Technology Reporters’ Association (NITRA).

Maida said the NCC played a crucial role in regulating the telecom sector, ensuring that service providers’ rates were fair and cost-oriented.

“Rates were not simply pulled out of thin air; instead, the commission conducts a comprehensive cost study to analyse the actual costs of providing a service,” he said.

The EVC said by analysing the costs, the commission can determine a fair and reasonable rate for services such as the recently reviewed unstructured supplementary service data (USSD) charges from airtime.

“If you are asking about the rates, specifically the N6.98 USSD deduction from airtime recharge. Where did we get this figure from? Did we just pull it out of thin air?” Maida said.

“What we usually do at NCC is conduct a cost study before allowing anyone to charge a particular rate. This means we analyse how much it costs to provide the service.

“We have done this for USSD charges and are currently conducting a comprehensive cost study. Once completed, we will issue a determination based on all relevant factors.

“This approach ensures that charges imposed are based on real costs, rather than arbitrary figures.”

Maida also said the NCC’s cost study considers various factors, including the cost of infrastructure, maintenance, and personnel.

The commission’s chief said the liberalised telecoms sector ensured that any charge or rates imposed are cost-oriented.

“Consumers may not directly participate in rate determination discussions, but the NCC protects their interests by scrutinising the costs and justifications behind service providers’ proposed rates,” he added.

“For instance, if a provider wants to charge a certain rate for calls, they must justify the cost breakdown to us. This ensures that rates are fair and based on actual costs.

“The level of expertise required for these discussions makes it challenging for ordinary consumers to participate directly.”

Also speaking at the event, Blessing Olaifa, president of NITRA, thanked the NCC’s staff members for the interaction.

Olaifa promised to keep faith with the commission and always support it professionally in the course of reportage or the greater good and growth of the Nigerian economy.