Nigerian Communications Commission Issues Guidance on the Simplification of Tariffs to Telecommunications Operators
On July 29, 2024, the Nigerian Communications Commission (“NCC“) issued the Guidance on the Simplification of Tariffs in the Nigerian Communications Sector (the “Guidance“) seeking to achieve (a) the simplification of tariff plans and bundles, (b) the promotion of transparency and fairness in the promotional aspects of tariff plans, (c) the enhancement of consumer awareness, and (d) the fostering of fair competition among NCC licensees.
Accordingly, Mobile Network Operators (MNOs) are mandated to implement all provisions of the Guidance across all retail products offered to individual subscribers, including both prepaid and postpaid services. In contrast, other categories of individual licensees are obligated to comply solely with the requirements for disclosure, the transparency template, and the conditions governing tariff approvals.
The Guidance is to be construed alongside existing legislation relevant to tariff regulation.
Key Provisions
- Limitations on Tariff Plans and Bundles: The Guidance restricts operators to offering a maximum of seven (7) tariff plans and one hundred (100) bundles. There are, however, no limitations on the number of Add-ons that a subscriber may opt into notwithstanding, 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. Consequently, MNOs may need to reorganize their current portfolio of tariffs and bundles to ensure full compliance with these requirements.
- Unbundling of Promotional Elements: The Guidance permits MNOs to maintain existing bonus-led tariff plans until December 31, 2024. However, all new promotional elements, including bonuses, must be offered as standalone promotions. Promotional elements required to be unbundled include: (a) loyalty rewards, (b) regressive billing, and (c) additional service elements on recharge (e.g., a 5x bonus on a ₦100 recharge). Notably, the Guidance allows operators to retain one bonus-led plan for new subscribers for a limited period of six (6) months, after which subscribers must be migrated to a standard tariff plan.
- Unbundling of Add-ons: The Guidance stipulates that add-ons must be optional, allowing subscribers the flexibility to purchase them without altering their existing tariff plan. Free add-ons are to be categorized as promotional offers. Examples include access to premium content, such as streaming services, premium channels, roaming packages, and additional online storage.
- Disclosure and Transparency: Licensees are required to publish a table on their websites, within a dedicated tariff information tab, detailing the characteristics of their tariff plans and bundles. This table must provide all essential information necessary for subscribers to make informed decisions. The Guidance includes a mandatory disclosure table template that operators are required to use.
- Additional Conditions for Tariff Approvals: The Guidance introduces additional conditions for the approval of tariffs, including: (i) operators must offer standalone data bundles at fair prices to prevent the bundling of unnecessary products, (ii) bundles with shorter validity periods should be prioritized for depletion, (iii) below-the-line/personalized offers, deals, and cashbacks, whether offered directly by licensees or via third-party platforms, must comply with the tariff approval conditions and promotional guidelines, and (iv) access fees and asymmetric fee structures must be eliminated.
- Subscriber Notification and Approval Procedures: The Guidance requires operators to notify subscribers of any changes to their tariff plans, including migrations to new plans, at least thirty (30) days in advance. For tariff approvals, operators must submit all tariff plans, bundles, and promotions to the NCC via its designated online portal, accompanied by comprehensive documentation, including plan descriptions, pricing, terms, and conditions.
Conclusion
While the Guidance applies to both MNOs and individual licensees, the frequent use of the term operators may necessitate clarity on its applicability to both MNOs and other individual licensees to prevent interpretative challenges.
All NCC licensees, including MNOs and other categories, must ensure their tariff offerings comply with the Guidance within ninety (90) days of its issuance. Additionally, operators are required to submit transition plans for existing tariffs to the NCC by August 12, 2024.
Failure to adhere to the Guidance may result in penalties, including fines, suspension of tariff approvals, or other regulatory actions by the NCC.
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