Internet Service Providers (ISPs) have started slashing tariff for their offerings while telcos are increasingly clamouring for hikes.
Investigations revealed that typical data plan for small businesses which was formerly offered at N35,000 by traditional ISPs have now been reduced to N20,000, in spite of growing challenges of business environment in the country.
The price reduction is not applicable to 4G LTE service providers.
But telecommunications operators at the Senate Committee on Communications hearing supported a hike in data service as earlier proposed by the Nigerian Communications Commission (NCC).
Commenting on the reduction by ISPs, Satis Kumar, chief operating officer, Direct On Data, said that the reduction in internet cost by traditional ISPs to competition in the industry as well as reduction in the cost of bandwidth which has dropped to as low as N10,000 per Mbps.
“There are a lot of small ISPs in the country looking for customers and they think the best way to get customers is by offering cheaper price, this has force us to reduce instead of losing such customers. This is not good for the industry as ISPs are saddled with harsh business condition, which include high base station rentage, inefficiency of tower management that have forced us into deploying batteries at our base stations to ensure improved service quality among others challenges,” he said.
Engr. Sunday Folayan, president, Internet Service Providers of Nigeria (ISPAN), explained that though there is reduction in the price charge by ISPs, but, telcos data price is cheaper because they offer a combination of services, which include, internet, SMS and voice from one platform while ISPs offer only internet.
He added: “I don’t believe in fixing data price. What I believe in is ensuring that service quality is improved. If quality of service is improved, prices will take care of itself”.
He cited example with transportation where some companies offer passengers cheap fare without comfort in the bus and another higher fare with comfort in the bus. “It is left for the passenger to make his choice”.
He urged NCC not to fix prices for data but rather ensure that quality of service is improved.
“Offering good quality service with better price is better than offering ridiculous service with ridiculous price,” he said.