NCC Wields the Big Stick, Slashes SMS Tariff

Nigerian Communications Commission (NCC) this morning announced a new price cap of N4.00 per message for all domestic off-net short messaging service with effect from February 5, in the first regulatory intervention of the year to bring down the cost of SMS.

‘Off-Net’ is when the message is made on a different network, for instance from Etisalat for Glo which currently costs N10 per SMS.

NCC said that the directive to this effect has been communicated to the operators since January 3, 2013.

The commission however said it will not place a price cap on International SMS at this time.

The directive signed by Ms. Josephine Amuwa, director, Legal and Regulatory Services of NCC, said the Commission arrived at the new price cap after due considerations of the submissions made by the operators at various consultative meetings.

Amuwa  said having evaluated and analyzed 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 for SMS as determined by the Commission in 2009”.

She also noted that the operators had proposed a price cap ranging between N5-N10 per message for Off-Net SMS.

The operators also urged the Commission not to set a cap for international SMS due to the fact that Interconnect rates for International SMS are outside their control as it is terminated through international carrier service providers in various jurisdictions.

Amuwa said that based on these considerations, and  in the interest of striking a balance between sustaining operator’s profitability and ensuring consumer satisfaction.

“In accordance with the powers conferred on the Commission  under Sections 4 and Chapter V11 of the Nigerian Communications Act, 2003, the following determination was made by the Commission: the Commission hereby sets a price cap of N4.00 (Four Naira Only) for Off-net SMS: the new rate shall be implemented within 30 days from the date of the directive; and 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 Commission will monitor compliance by the operators, and noted that failure to comply with the determination will be penalized as provided by section 111 of the NCA 2003.