Subscribers benefit as Nigerian telcos engage in data prices war

Nigeria’s telecommunications sector has developed progressively to an open and competitive market regime, from a largely centralised, publicly controlled monopoly structure. This has happened through a managed competitive model.

Liberalization of the sector has delivered significant benefits to Nigerian businesses, consumers and the economy at large. Users now have a greater choice of suppliers of telecommunications services offering a broad range of new and innovative services and products. The introduction of mobile number portability deepened competition, as service providers now strive to offer the best services to ensure they retain their subscribers. Customer service has also improved, with companies more responsive to the needs of users. Most importantly, prices have reduced across board. Nowadays, price wars happen frequently; ‘how low can you go’ seems to be the theme. The latest of the wars is on data.

Indigenous telecommunications company Globacom (Glo) used to have the lowest data prices and despite the perceived unreliability of its network, many Nigerians preferred it because it was cheap. MTN Nigeria, a subsidiary of South Africa’s MTN Group saw that it was gradually losing its market share and slashed prices, with 1.5 gigabytes of data going for N1000 ($5). Before Glo’s cheap data era, data users could only buy 200 megabytes for N1000. The Nigerian telco would now allow MTN beat it at its own game, and therefore slashed prices further, giving users 2G for N1000.  In order not to be left out, other telecoms companies had also slashed prices, with data volume of 3G now gotten for N1500 on Airtel and 1.5G of data for N1000 on Etisalat.

The battle for market share in the mobile internet space is heating up everyday as penetration rises in the country; only telcos with competitive prices and quality services will thrive.

According to data by the Nigerian Communications Commission (NCC), MTN had 41.84 million internet users by September 2015, Globacom had 21.89 million subscribers, Airtel had 17.73 million and Etisalat had 15.59 million.

Industry sources say the data price battle by the companies would have worsened if there was no regulator putting caps. “But it’s a good thing for consumers. We’d be getting data for almost free.”

When GSM launched in Nigeria in 2001, sim cards sold for as much as N40000 but as competition increased in the liberalized telecoms sector, prices began to reduce. Today, sim cards are given out for free.

Omotola Jolayemi, a VSAT engineer based in Lagos, Nigeria’s commercial capital says it’s great what liberalization of the telecoms sector has done.

“It was very expensive for me to complete most of the courses I took online. Data was gold! Today, I have enough data for work and pleasure,” he says. “The nature of my work puts me on the road very often and I have little time to spend watching TV. I stream everything these days; from football matches to movies.”

He expresses hope that the Nigerian government could apply such policy in other sectors such as power. “Imagine if you had the luxury of choosing one out of four power companies. You would go for the one with the best service and reasonable pricing. The laggards will go out of business,” he says.