In a bid to protect consumers and foster fair competition, the Nigerian Communications Commission, NCC, has issued a stringent directive to telecommunications operators.

The regulator has mandated a sweeping overhaul of the complex tariff structures currently plaguing the sector.

The new guidelines, which took effect on July 29, 2024, aim to introduce unprecedented transparency and clarity into the tariff landscape. By compelling mobile network operators, MNOs to simplify their plans, bundles, and promotions, the NCC hopes to empower consumers to make informed decisions about their telecommunications services.

Key provisions of the directive include

Mandatory Tariff Tables: MNOs must publish detailed tables outlining the features of their tariff plans, including add-ons, prices, and terms and conditions.

Clear and Concise Information: Tariff information must be presented in plain language and easily understandable formats.

USSD Transparency: Subscribers must be able to access full details of their tariff plans via USSD.

Stand-Alone Data Bundles: Operators are required to offer data bundles without tying them to other services.

Bonus Clarity: Bonuses on promotional plans must be clearly stated in monetary value.

Elimination of Hidden Charges: Access fees and asymmetric fee structures are prohibited.

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While the NCC has allowed operators to maintain their existing bonus-led plans until the end of 2024, a strict deadline has been imposed for the complete transition to the new simplified framework.

Industry experts believe that this move is a significant step towards consumer protection. By forcing telcos to adopt a more transparent approach, the NCC is leveling the playing field and empowering subscribers to choose the best plans for their needs.

Speaking with the former CEO of Opay and former Chief Operating Officer of Airtel, Mr. Olu Akanmu, said: “The NCC directive on pricing transparency is in good spirit of regulatory practice of faurness to consumers and larger consumer rights protection.

Akanmu who is now the CEO of Philips & Samuel, said: “More so, if the operators are asking for inflation adjusted tariff increases, pricing transparency will ensure that telecom customers can rationally plan and fairly so what they wish to consumein an inflationary environment where regulator should balance the need of the consumers and industry with regards to business sustainabilty.

However, concerns have been raised about the potential impact on competition. Some argue that the standardized tariff structures could stifle innovation and reduce the incentives for operators to offer competitive deals. As the telecom industry adapts to these new regulations, consumers will be watching closely to see how the changes impact their mobile experience and wallet.

Telcos under scrutiny

The directive comes amidst growing public frustration over the complexity of tariff plans. Consumers have long complained about hidden charges, misleading promotions, and difficulty in understanding the true cost of their services.

Common Complaints:

Unclear Tariff Structures: Many subscribers complain about the complexity of tariff plans, making it difficult to understand the exact costs of services.

Unexpected Charges: Subscribers often report being billed for services they didn’t subscribe to or were unaware of.

Excessive Data Charges: High data charges, especially for rollover data or unused data, are frequent complaints.

Hidden Fees: Subscribers often complain about charges for value-added services they didn’t opt into, such as caller tunes or subscription fees.

Airtel, MTN, Glo, and 9mobile are among the major operators that will be affected by the new rules. While these companies have offered a variety of plans in the past, including options like SmartConnect, XtraSpecial, Berekete, and 9Konfam, they will now need to align their offerings with NCC’s guidelines. It remains to be seen how these telecom giants will respond to the challenge of simplifying their tariff structures while maintaining profitability.

Impact on Consumer Spending

Reacting to the directive, some telecom consumers have expressed joy, stating that such a directive will bring about increased consumer confidence and a potential decrease in average spending.

For instance, a 300-level university student, Chijoke Samuel, said: “With clearer tariff structures, we can make more informed decisions about our spending. It will lead to increased trust in telecom providers.”

Also, as consumers gain a better understanding of their spending, they might opt for more affordable plans, leading to a potential decrease in average revenue per user.

A social media content creator, Olatunji Williams, said: “The directive would lead to a shift in consumer behaviour. With full implementation, consumers might become more price-sensitive and switch between providers more frequently, seeking the best value.”

Williams also stated that this could lead to increased data consumption. “With more transparent data plans, consumers might be encouraged to consume more data, potentially offsetting the decrease in average spend.”

Challenges for Telecom Operators

Revenue Pressure: Simplifying tariffs and eliminating hidden charges might lead to a short-term decline in revenue for telecom operators.

Competitive Pressure: Operators will need to differentiate their offerings beyond pricing, focusing on network quality, customer service, and value-added services.

Operational Changes: Implementing new tariff structures and systems can be costly and time-consuming.

Customer Retention: Maintaining customer loyalty will become more challenging as consumers have more options to choose from.
Balancing Profitability and Consumer Satisfaction: Operators will need to find a balance between maintaining profitability and providing affordable services to consumers.

Overall, while the transition to transparent tariffs might pose challenges for telecom operators, it is expected to benefit consumers in the long run.