Spectranet Backs NCC on Data Price Floor
By Ayomide Oriade
The recent announcement of a data price floor by the Nigerian Communications Commission, NCC was greeted with scepticism by majority of Nigerians. The move was perceived as another means of short changing Nigerians despite the scorching heat of recession already being felt by all.
But an expert in the broadband field has explained that NCC’s gesture was misconstrued by the people as they were fed with its report by the media.
Managing Director of Spectranet, David Venn in an exclusive interview with MARKETING EDGE explained that the move by NCC was crucial to bringing sanity to the data service market and drive the broadband penetration mantra of the federal government. According to him, no investor will invest in broadband business in Nigeria if the status quo was allowed to continue.
He said, “On the data floor, there was a big issue last month on the NCC trying to introduce floor price for data. I think it was misunderstood in the press. We are very much in favour of that because some of the mobile phone companies have driven the price down way below their cost so they are certainly at a loss. They are doing so intentionally to try and tempt people across boad. We are not looking to see if we can compete on price with them. Their cost to us is much lower but we are more efficient than a mobile phone company.
“But they are selling way below cost trying to bring in customers. The problem with that is that it does two things: over time it will kill competition. Secondly, no one in their right mind will invest in rolling out a broadband data network if the price you can charge is below cost. There’s no incentive to do it. That was why the NCC stepped in to say you are charging way below cost. We used to have a price floor way higher than the one they proposed. All they said was we are going to a new price floor and it’s going to be lower than it was. But there’s going to be a price floor just to bring sanity to the industry because without the price floor, we are going to lose competition and there won’t be a roll-out of broadband across the country.”
Venn added that Spectranet has been a force to reckon with in the drive for broadband role-out across Nigeria. He said though the percentage of broadband users in the country is very low, the company is doing its best to expand its reach in the country.
“The country sees the need to roll out broadband and make it available throughout the country as soon as possible. We are doing part of that. We have rolled out 4G more than anybody; in terms of broadband we are the market leader.
“Our target with the SMEs is around the 10 million mark. And the penetration at this very moment is very low because most people in this country have their internet experience on the mobile phone. There are 100 million people using internet here according to NCC, probably less than a million use broadband. So that’s about 1%. The penetration is very low but it’s growing quickly,” he said.
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