A few weeks ago, I had raised some questions on the compulsory 40kobo monthly surcharge NCC had approved for Netvisa, a licensed service provider to manage the CEIR phone blacklisting service. For those who might not be aware, the phone blacklisting service is one of the strategies NCC plans to help curb phone theft which was estimated at 2 million phones annually.
For this, NCC in agreement with some stakeholders in the industry approved a compulsory surcharge of 40kobo per subscriber every month to provide the service. While the service is laudable and timely, my reservations bordered on the compulsory status of the surcharge, especially when there were claims that the service providers offered to provide the same service at no cost. While 40kobo is negligible to each subscriber, the cumulative total over more than 60million subscribers would tally up to over 300million every year!
Legitimate questions about NCC’s logic for opting for a third party to provide a service that was already available on individual networks and might only require a directive for all networks to interconnect in order to share the information, however was seen as a malicious plan to sabotage the project by some people at NCC and surprising enough, quite a few consumers.
Almost all the comments posted on CAFON’s social network site http://cafonnigeria.ning.com accused me of colluding with phone thieves or defending interests other than the consumer’s. It appeared that the issue had polarized Nigeria’s consumer base as so many other consumers were insistent on NCC either providing the service for free or at least at lower costs and definitely not compulsorily.
An evaluation of the two opposing views revealed that consumers took a position based on their level of enlightenment as majority of the nays spoke only from the need perspective while the yeas were more concerned with the strategic relevance and long term sustainability of the service.
It was very enlightening because it allowed me to see the difference awareness, information and enlightenment makes in dealing with consumer issues. One consumer actually asked me why I was so concerned about what happens 2 years up the road. Why can’t I wait until then? Exactly the sentiments of the regulators.
Does one need to wonder why nothing appears sustainable in Nigeria when it seems we are comfortable with making short term plans on long term issues?
Phone theft has been for over 7years now and will probably be a problem 7 years down the road but our desire and strategy is to solve the immediate now and deal with the future when it shows up.
Why not plan to solve it for at least 10 years instead of 2? Knowing the Nigerian economic equation, chances that the cost would decrease over the years is slim. So after 2 years, we might end up paying a naira or two for the same service with no added value.
It is worth noting that the Minister of Information and Communication was reported to havedirected a freeze on the execution of the project to review the package. That is a welcome development.
One however hopes that the Minister will vigorously pursue this review to either get the service free for the consumer or at least reduce the initial cost to the consumer.
It would be even better if the service can be available to consumers on as needs basis or if an additional benefit of insurance can be worked into the deal.
One common recurring reason why the nay consumers seemed to want the NCC option was because they didn’t trust the service providers to faithfully implement the service because of the fact that they make money on Welcome Back packs.
Whenever a consumer loses his phone, he pays from N300 to N800 to retrieve the SIM depending on the provider. According to the nay consumers, this income stream might influence the efficacy of the service because the providers want to keep selling Welcome Back packs.
The issue raised more questions for me on the regime of charges NCC endorsed for these networks. With the level of vibrancy in the sector, one would think that certain practices would have been abolished because they are unsustainable.
It puzzles me that consumers are still paying for the SIM card separate for the network service. In the first instance, the SIM card is the property of the network as stated in the contracts attached to the packs. It just happens to be the means through which I get access to the product I want to buy i.e. airtime. If the Network decides, it can withdraw my SIM at will because it is their property.
How come Nigerian consumers are being made to pay for an item that they can never own? It’s like the doctor charging you for the syringe separate from the injection! Shouldn’t it be part of the cost since you can’t get the injection without the syringe anyway? SIM cards all over the world are considered part of the cost of service not treated as a separate product.
I remember buying a Lebara pay-as-you-go pack at Victoria Station in London recently. The hawker charged 5 pounds for the pack and when I activated the number, my initial credit was exactly 5pounds; not 4 pounds fifty after deducting 50p for the SIM pack! I recall paying N40, 000 for my SIM card in 2001! No airtime was even included then! N40,000!
Thank God for the competitiveness of Glo mobile that crashed the price to 200, forcing other networks to reduce their prices too. If something that once cost 40,000 could come to cost as little as 200 in a 5 year cycle, one does not need a calculus to determine that some exploitation was definitely going on somewhere.
Yes, we could sing the early adopter song in the marketing cycle but the disparity is too great and in the economies of scale, the cost of producing the SIM pack should be negligible enough by now that it can be absorbed as part of running costs. But will the networks, which are in business to make money, willingly let go of this additional income stream without prompting?
Probably not, so NCC needs to rigorously engage them with a view to constantly minimize cost of service to the consumer. Or what do you think?\
It is bad enough that we pay for the tool needed to get the service but it becomes questionable when the service provider seems to be profiting from a consumer’s misfortune by charging a premium to restore a service that already caused great loss to the consumer (phone, other personal items if it was a case of armed robbery, valuable information, etc).
No wonder the nay consumers would rather pitch their fortune with NCC’s compulsory 40kobo monthly surcharge than take the free offer from the service provider. Who wants to take a chance with anyone who appears to profit from one’s misfortune?
While NCC is at this issue of Phone Blacklisting Surcharge, can they review this practice of paying to retrieve a stolen line too? After all, the service providers cannot charge for it without NCC’s consent and approval and I want to believe that the regulator’s primary responsibility is to look out for the consumer while ensuring a competitive business environment for the service provider.
In fact, Nigerian consumers should no longer pay for acquiring a SIM card either for a new line or replacing a lost one. Whatever value is placed on the SIM pack should be loaded in full on the line as airtime. If we pay N300 for a new SIM, the airtime on that line must be N300 in full, no less.
For the service providers, it makes good business sense to seize the moment and display some consumer sensitivity on this matter before it becomes a directive from NCC. And please, let no one chant the “cost of business in Nigeria is too high” mantra at me.
After all, as “harsh” as the Nigerian business clime is reputed to be, profit margins here sometimes are quite juicy ( I recall reading about one GSM network declaring over 400billion profit before tax in a half year cycle a few years back!) The supposed harsh costs are borne by the consumer anyway so let us share in the benefit too.
Another argument in favor of free SIM card is also the fact that all networks still have loads of technical issues that result in consumers being charged for services not delivered e.g. drop calls, bad connection while the counter is running, etc.
That is like making money for nothing. Since we must endure this until their facilities are functioning better, they could at least pass some of that free money back to us by giving us a break on the SIM card end.
It is also just and fair that no consumer should pay for something which will never belong to him. We are interested in airtime… not the tool to get it!
Monday, September 21, 2009
Wednesday, September 9, 2009
Re: NCC’s Blacklisting Service Surcharge
This thread of e mails happened sequel to last week’s article. I decided to publish so consumers can understand the issues and form their own opinions.
Emma Eze’s e-mail to NCC
I have read the newspaper features on ThisDay Newspaper of Friday, August 28, 2009 wherein one Sola Salako was castigating the laudable initiative and was mobilizing consumers of GSM products against it
I want to seize this opportunity to apprise you that I identify with this noble initiative and wants to ascertain how to actualize it and activate it on my phone
The cost of N4.80 annually is really very insignificant considering the enormous benefits that are accruable through the Project.
I look forward to hearing from you. Thanks and best regards
Engr. Emmanuel Eze
Federal Ministry of Agriculture and Water Resources
Abuja.
NCC’s Reply
Hello Emma,
My name is Reuben Muoka and I am the Head, Public Affairs of NCC. Thank you for your understanding.
You are not actually going to pay. The NCC is paying. Sola's concern is that the operators will eventually charge the subscribers and as you have pointed out, N4.80k for a year is almost insignificant.
What Sola did not also understand is that the company will manage the data base of all phones being used in Nigeria for the benefit of NCC which is paying for the service. So, you need not worry about the deliberate efforts to insinuate that the subscribers will pay. If you operator hooks to the system, you are automatically protected.
The Commission will embark on some enlightenment campaign about how to maximize the full benefits of this programme. Thank you for this mail and I am copying Sola for her information about what people are saying and there are several others like you who are commending this initiative..
Reuben
My Response
Dear Reuben,
Thanks for your mail. I am glad my article is helping Nigerian consumers engage in this process. Your explanation to Emma is simplistic enough. However, it is important to clarify a few things:
1. At no point did I 'castigate' the initiative. As I have maintained, it is a good initiative and one that is timely because of the high incidence of phone theft in Nigeria at present.
My questions, as you know, are based on the following
(a) You told Emma the consumer will not need to pay. You however forgot to mention that NCC is 'paying' for the first 2yrs only. After 2 years, who pays; the service provider or the subscriber? Whichever, the consumer ultimately pays because the service provider will pass that cost back to us once NCC is no longer 'subsidizing' it.
While on this topic, may I ask how NCC intends to 'pay' NETVISA for this ‘service’? From the tax payers money I presume. Has NCC gotten legislative approval to deduct the whooping N300m or so monthly from its income for this project? After all, that income is ultimately the Nigerian people's held in trust by the government which NCC represents.
So contrary to what you clearly stated, the Nigerian citizen IS paying though indirectly. Let me ask Emma whom I have copied in this mail, 'Sir, if the Federal Internal Revenue Service FIRS made a directive that all subscribers should pay 40k monthly indefinitely as special tax, would you be this receptive to it?
Now imagine that FIRS decides to pay a private company 40kobo monthly to keep your personal data in a database on their behalf in case they need it. Would you pay 40k monthly for such a 'service' or would you encourage FIRS to spend tax payer's money on such a project?
That is what NCC is proposing to do.
(b)Why can’t NCC direct the Networks to provide this service and interconnect so we don’t need to pay a third party? Can the networks do it for free? If not, can they provide the service on request instead of charging all of us for it whether we require it or not? Those are the real issues, Reuben and though consumer Emma may not be very aware of these details, they are important in protecting consumers from exploitation, irrespective of whether the consumer is aware or not. That is my job as a consumer advocate.
If countries like South Africa offer the same service at no extra cost, why can’t Nigerian consumers get it without costing us or our government a kobo?
2. To Consumer Emma, 40k a month and N4.80 a year is insignificant. I agree. It is pretty insignificant to me too. But Emma and I are not the only consumers on the network; if my checks are accurate, there are about 60million of us. When you calculate the total, 40 kobo becomes billions in a year (2billion or so)...little drops of water makes the mighty ocean as the saying goes.
That 40k NCC is willing to 'pay' to NETVISA for simply saving the information of our phones on a computer server can be used to build more roads, hospital or allocated to Emma's office to enable more farmers grow more food to arrest the issue of food shortage. Nigeria can use that money for better and more productive things; especially because the service can be delivered in other ways.
Finally, is this charge insurance? It is only insurance that allows the risks to be spread over a large number of people who pay minimum premiums to cover them. Why doesn’t NCC negotiate with the insurance companies to provide this service as well as added insurance so if your phone is stolen, it can be shut down and the insurance can replace the phone. At 40k per subscriber per month, that is a better service than what NETVISA is proposing. Or will NETVISA take on that added risk too? If they will, then I will be glad to encourage consumers to take the offer. If not, what they are offering is not worth our collective investment of 40k per month! NO SIR!
In fact, I was discussing this with the Consumer Protection Council officials during the week and they kept pointing out to me that the decision to charge compulsorily is a violation of the consumer's right to choose. So even if it is insurance, every consumer still has a right to take the offer or decline it. NCC, with this package has taken that right away from the Nigerian consumer. That is not acceptable.
As laudable as the initiative is, and as needful as it is, NCC should please do a thorough job to ensure that the consumer is not vulnerable to exploitation by the structures it puts in place to offer us any service. Yes, we are needy now so the charge seems insignificant but what happens in 5 years when the incidence of phone theft has been reduced. Will we be paying this charge for eternity?
I would want to know if the Senate and House Committees on Telecommunications as well as the Honorable Minister of Information and Communications, Prof Dora Akunyili all approved this project with this structure. Has the Hon David Salako (we share the same surname; who knows, maybe we are from the same stock...smile) committee in the House of Representatives presented this project on the floor of the House or even the Senate Committee, and the National Assembly approved that NCC can pay this 40k charge on behalf of the Nigerian subscriber? Is this how public funds are expended on projects that could be reworked to give better value? I really hope not.
Reuben, please give the Nigerian Consumer the full details of this initiative. It is laudable, a good initiative and it should help to minimize incidences of phone theft and threats to life and property (though it will not eliminate it).
By all means, NCC must execute this project. But please, if it is possible to get it done at no extra cost to us, let us explore that option. If it is not, can the consumer get better value like phone replacement in case of loss? If not, can the service be optional so I only get it on request and pay at that point. I am sure one or all these options are possible if NCC would explore them.
But the way it is now, it appears like a clear case of collective exploitation of unsuspecting consumers and as a Consumer Advocate, it is my responsibility to identify such and raise the alarm. I am only doing my job.
Thank you.
Sola Salako
President
Consumer Advocacy Forum
p.s For your information, in 2007, I lost 4 phones at gun point in a salon in Ikeja Lagos. So I know the dangers of our situation. I repeat, I am NOT against this project. It is laudable, needful and timely. But please, let us make it sustainable, convenient and affordable for the consumer in the long term. That is my request.
I have copied the DG Consumer Protection Council for her information and I intend to publish this chain for Nigerian consumers to know what the real issues are.
Emma Eze’s e-mail to NCC
I have read the newspaper features on ThisDay Newspaper of Friday, August 28, 2009 wherein one Sola Salako was castigating the laudable initiative and was mobilizing consumers of GSM products against it
I want to seize this opportunity to apprise you that I identify with this noble initiative and wants to ascertain how to actualize it and activate it on my phone
The cost of N4.80 annually is really very insignificant considering the enormous benefits that are accruable through the Project.
I look forward to hearing from you. Thanks and best regards
Engr. Emmanuel Eze
Federal Ministry of Agriculture and Water Resources
Abuja.
NCC’s Reply
Hello Emma,
My name is Reuben Muoka and I am the Head, Public Affairs of NCC. Thank you for your understanding.
You are not actually going to pay. The NCC is paying. Sola's concern is that the operators will eventually charge the subscribers and as you have pointed out, N4.80k for a year is almost insignificant.
What Sola did not also understand is that the company will manage the data base of all phones being used in Nigeria for the benefit of NCC which is paying for the service. So, you need not worry about the deliberate efforts to insinuate that the subscribers will pay. If you operator hooks to the system, you are automatically protected.
The Commission will embark on some enlightenment campaign about how to maximize the full benefits of this programme. Thank you for this mail and I am copying Sola for her information about what people are saying and there are several others like you who are commending this initiative..
Reuben
My Response
Dear Reuben,
Thanks for your mail. I am glad my article is helping Nigerian consumers engage in this process. Your explanation to Emma is simplistic enough. However, it is important to clarify a few things:
1. At no point did I 'castigate' the initiative. As I have maintained, it is a good initiative and one that is timely because of the high incidence of phone theft in Nigeria at present.
My questions, as you know, are based on the following
(a) You told Emma the consumer will not need to pay. You however forgot to mention that NCC is 'paying' for the first 2yrs only. After 2 years, who pays; the service provider or the subscriber? Whichever, the consumer ultimately pays because the service provider will pass that cost back to us once NCC is no longer 'subsidizing' it.
While on this topic, may I ask how NCC intends to 'pay' NETVISA for this ‘service’? From the tax payers money I presume. Has NCC gotten legislative approval to deduct the whooping N300m or so monthly from its income for this project? After all, that income is ultimately the Nigerian people's held in trust by the government which NCC represents.
So contrary to what you clearly stated, the Nigerian citizen IS paying though indirectly. Let me ask Emma whom I have copied in this mail, 'Sir, if the Federal Internal Revenue Service FIRS made a directive that all subscribers should pay 40k monthly indefinitely as special tax, would you be this receptive to it?
Now imagine that FIRS decides to pay a private company 40kobo monthly to keep your personal data in a database on their behalf in case they need it. Would you pay 40k monthly for such a 'service' or would you encourage FIRS to spend tax payer's money on such a project?
That is what NCC is proposing to do.
(b)Why can’t NCC direct the Networks to provide this service and interconnect so we don’t need to pay a third party? Can the networks do it for free? If not, can they provide the service on request instead of charging all of us for it whether we require it or not? Those are the real issues, Reuben and though consumer Emma may not be very aware of these details, they are important in protecting consumers from exploitation, irrespective of whether the consumer is aware or not. That is my job as a consumer advocate.
If countries like South Africa offer the same service at no extra cost, why can’t Nigerian consumers get it without costing us or our government a kobo?
2. To Consumer Emma, 40k a month and N4.80 a year is insignificant. I agree. It is pretty insignificant to me too. But Emma and I are not the only consumers on the network; if my checks are accurate, there are about 60million of us. When you calculate the total, 40 kobo becomes billions in a year (2billion or so)...little drops of water makes the mighty ocean as the saying goes.
That 40k NCC is willing to 'pay' to NETVISA for simply saving the information of our phones on a computer server can be used to build more roads, hospital or allocated to Emma's office to enable more farmers grow more food to arrest the issue of food shortage. Nigeria can use that money for better and more productive things; especially because the service can be delivered in other ways.
Finally, is this charge insurance? It is only insurance that allows the risks to be spread over a large number of people who pay minimum premiums to cover them. Why doesn’t NCC negotiate with the insurance companies to provide this service as well as added insurance so if your phone is stolen, it can be shut down and the insurance can replace the phone. At 40k per subscriber per month, that is a better service than what NETVISA is proposing. Or will NETVISA take on that added risk too? If they will, then I will be glad to encourage consumers to take the offer. If not, what they are offering is not worth our collective investment of 40k per month! NO SIR!
In fact, I was discussing this with the Consumer Protection Council officials during the week and they kept pointing out to me that the decision to charge compulsorily is a violation of the consumer's right to choose. So even if it is insurance, every consumer still has a right to take the offer or decline it. NCC, with this package has taken that right away from the Nigerian consumer. That is not acceptable.
As laudable as the initiative is, and as needful as it is, NCC should please do a thorough job to ensure that the consumer is not vulnerable to exploitation by the structures it puts in place to offer us any service. Yes, we are needy now so the charge seems insignificant but what happens in 5 years when the incidence of phone theft has been reduced. Will we be paying this charge for eternity?
I would want to know if the Senate and House Committees on Telecommunications as well as the Honorable Minister of Information and Communications, Prof Dora Akunyili all approved this project with this structure. Has the Hon David Salako (we share the same surname; who knows, maybe we are from the same stock...smile) committee in the House of Representatives presented this project on the floor of the House or even the Senate Committee, and the National Assembly approved that NCC can pay this 40k charge on behalf of the Nigerian subscriber? Is this how public funds are expended on projects that could be reworked to give better value? I really hope not.
Reuben, please give the Nigerian Consumer the full details of this initiative. It is laudable, a good initiative and it should help to minimize incidences of phone theft and threats to life and property (though it will not eliminate it).
By all means, NCC must execute this project. But please, if it is possible to get it done at no extra cost to us, let us explore that option. If it is not, can the consumer get better value like phone replacement in case of loss? If not, can the service be optional so I only get it on request and pay at that point. I am sure one or all these options are possible if NCC would explore them.
But the way it is now, it appears like a clear case of collective exploitation of unsuspecting consumers and as a Consumer Advocate, it is my responsibility to identify such and raise the alarm. I am only doing my job.
Thank you.
Sola Salako
President
Consumer Advocacy Forum
p.s For your information, in 2007, I lost 4 phones at gun point in a salon in Ikeja Lagos. So I know the dangers of our situation. I repeat, I am NOT against this project. It is laudable, needful and timely. But please, let us make it sustainable, convenient and affordable for the consumer in the long term. That is my request.
I have copied the DG Consumer Protection Council for her information and I intend to publish this chain for Nigerian consumers to know what the real issues are.
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