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Pantami: Why Data Cannot be Cheap, By Ahmed Maiyaki

The Hon. Minister of communications and digital economy, Dr. Isa Ali Ibrahim Pantami is a very straightforward, honest and sincere man who views public service as an opportunity to better Nigerian citizens.

He has demonstrated this in his previous role as Director-General of National Information Technology Development Agency (NITDA) where he made several key efforts to protect Nigerian citizens, including the development of a data protection regulation.
Dr. Pantami, an Islamic scholar, inventor and public servant continuously displays accountability and shows good example of how public servants should carry on with their duties.

A few of his actions, however, since his emergence as minister, are beginning to become populist in nature, drawing wide-scale public support, but at the same time threatening to undermine his legacy and bring him at odds with the principles of free-market economy, rule of law and independence of regulatory bodies, and natural justice.

The first of such actions that Pantami took, which show clearly that he is yet to be familiar with the telecommunications industry, is the directive he gave to the Nigerian Communications Commission (NCC) shortly after he resumed as a minister, asking the regulator to bring down the prices of data.

News reports quoted Yusuf Abubakar, an aide to the minister, as saying in a statement issued on behalf of the minister that Nigeria is a not among countries with cheap mobile data. A report by Forbes.com in March this year on data prices in selected countries showed that Nigeria was among the lowest in the world. One wonders where Pantami’s advisers got their statistics.

Dr. Pantami may not be aware that among the big telecommunications markets in the world, Nigeria has the poorest infrastructure and security. One Operator in Nigeria has already constructed a power plant to serve its needs. Imagine that! A telecom firm building a power plant to serve its need will not make data cheap. Pantami should encourage the minister of power to improve public power supply. This will make data cheap.

However, when an operator with over 16,000 base stations is forced to run 32,000 generators (two per base station) at the cost of over N100 billion a year, data cannot be cheap. No other telecom operator in the world runs on 32,000 generators. Power in Nigeria is a peculiar mess.

In the last 10 years, the only prices that have gone down in Nigeria are the cost of phone calls and data. The Prices of EVERYTHING else has gone up. I dare anyone to prove me wrong.

It is my humble opinion that Dr. Pantami needs to get aides that are knowledgeable general ICT, telecommunications, postal services and other mandate areas of the ministry to advise him. Not getting subject matter experts will likely lead him into making decisions that may not be in the nation’s interest.

The second important point to note is Dr. Pantami’s cancellation of the USSD charges. Legally speaking, the minister has no right to cancel the charges because telecommunications infrastructure is used to provide such services and it comes with extra costs since more equipment is required to support the volume of banks’ USSD transactions. In addition, more staff are required to maintain USSD links for round-the-clock banking transactions.

The NCC sometime ago engaged an international reputable firm PricewaterhouseCoopers (PWC) to do a study and determine the unit cost of a USSD transaction to telecommunications operators. PWC arrived at a ceiling COST price of N4.89k. This means an operator spends and extra N4.89k to make each banking USSD transaction feasible.

Why then should the minister “cancel” such charges simply because he was not properly briefed?
When a USSD transaction is done, GTB charges N15 per transaction while other banks charge between N10 to N30.

There are allegations that some banks even charge N50. Without agreeing to remit the actual cost of N4.89k to operators, banks make a profit from telecom infrastructure, yet operators are told that they can’t even charge the actual cost, let alone make a profit from such. While the banks do not even announce those charges to their customers and the CBN has not sanctioned them, operators are being rebuked for announcing their intentions to charge for such.

That Dr. Pantami will ask operators not charge is like telling a bank not to charge COT to customers who make withdrawals after the money has been kept safe by the bank. This is unjust. Regulatory agencies are independent bodies. So why is the minister interfering on Regulatory matters? In free-market economies, it is not ministers determine prices.

Dr. Pantami, as I said earlier, is a good man. He must, however, be careful to ensure that justice is done to all parties at all times. He must avoid the temptation of making populist decisions that will not deliver justice to relevant parties. In governance, not all that glitters is gold.

In the words of Sheikh Shams Al-Din Sarkhasi, a noted classical Islamic Jurist, in his book ‘Al-Mabsut,’ volume 14, “rendering justice ranks as the noblest of acts of devotion next to belief in God. It is the greatest of all the duties entrusted to the prophets and it is the strongest justification for man’s stewardship on earth”.

Maiyaki, a policy analyst, writes from Kaduna.

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