How data price war affects telecoms service quality

One of the major causes of poor service quality faced by Nigerian subscribers is Data price ‘war’ among telecoms operators. Especially in the download and upload of content. But while consumers have enjoyed the conflict and its attendant cut in prices, they have had to endure drop in quality and speed.

Speed is the performance of a connection based on the number of bytes per second that data travels to and from a user’s device. Depending on the type of connection, the speed differs dramatically; the download rate is higher than the upload because a short request to the website (upload) results in a much larger download of Web pages, images and videos.

As at October, the Nigerian Communications Commission (NCC) statistics showed that the country had 123 million Internet subscribers, largely via the GSM platform (narrowband), while broadband users were 72 million. It should, however, be noted that there were dual users.

The claim of 4G service offerings by operators has equally not assuaged the pains of subscribers when it comes to quality, as speed remains unsatisfactory. According to OpenSignal, in 2018, Nigeria ranked 75th out of 77 countries in the quality of 4GLTE network offerings.

A November speed test survey carried out by Ookla put global average download speed at 30.93Mbps, while upload speed is 11.38Mbps. In the survey, Nigeria ranked 107 out of 139 countries at 16.74Mbps. According to Ookla, a Seattle, USA-based firm, South Korea and Qatar ranked first and second respectively with 117.79 Mbps and 77.07 Mbps download speeds.

Checks by The Guardian showed that while operators have cut down prices amid offerings of several bonuses, subscribers are unable to enjoy the packages either because they get exhausted too quickly or are fluctuation-prone, leaving users frustrated.

While this ‘snail speed’ offering persists, Nigeria also ranked 10th among countries with the most affordable data prices in Africa. According to Research ICT Africa, data price is relatively cheaper in Nigeria.

Research ICT Africa noted that data pricing remains a contentious issue on the continent where average incomes are low and where a significant portion of paycheques are often spent on mobile communication costs, including data.

In the survey, West Africa’s prices were varied, with low prices in Guinea ($2.20), Nigeria ($2.78) and Burundi ($3.02). In Benin, Niger and Senegal, it is also quite affordable at $3.39 for 1 Gbyte. But the price for 1 Gbyte of data is higher in countries such as Sierra Leone ($6.56) and Togo ($8.48). Some of the most expensive prices across the continent were in this region. For example, in Guinea-Bissau, it’s $16.95, Chad ($11.87) and Mauritania ($9.78).

Nigeria’s $2.78 (over N1,000) is in tandem with checks carried out by The Guardian when comparing the prices. The checks revealed that most of the Mobile Network Operators (MNOs) have slashed their prices by half. For instance, 1.5GB, which was sold for as much as N3000 some six months ago now goes for between N1,200 and N1,500 depending on the network. In fact, on the MTN network, subscribers can get 4.5GB for N2,500 and 8GB for N3000, depending on the plan.

Globacom has a number of data plans suited to different groups of individuals on Android, iPhone, Blackberry and other smartphones. They include N100 for 100MB, which lasts for two days, especially for students. It also has the same plan for daily users.

Apparently, because of its submarine cable system and huge bandwidth capacity, Glo also offers 2GB/N1000 for 30 days. On the network, subscribers who are willing to pay N2,500 can get 7.2GB data valid for 30 days.

Airtel has various plans, from daily 50MB for N100 to 16GB for N8000 with a validity of 30 days, among others. 9Mobile customers can enjoy 10MB, 40MB for as much as N50 and N100 respectively. The telecommunications firm, which used to be the toast of subscribers of data services before it faced some challenges about two years back, also offers 11.5GB for N8000 and 15GB for N10,000.

Internet Service Providers (ISPs) are not left out. For instance, Spectranet sells 8GB for N3,000; 10GB for N3,500; 14GB for N5,000 and 30GB for N7,000. Smile Communications offers 1GB for N1,000; 2GB for N2,000; 10GB for N9,000 and 15GB for N10,000.

While the prices continue to vary and steeply fall, customer satisfaction is also nose-diving. To buttress this, ‘Trend Analysis on Complaints Received from January 2018 to October 2019’ by the NCC showed that complaints about poor quality of service both on voice and data topped the platform.

A report from the UK-based price comparison website, Cable, revealed that Nigeria’s Internet download speed is one of the slowest in the world. According to the report, Nigeria’s Internet download speed is ranked 176th of 207 countries measured globally.

The report further showed that it takes an average of over seven hours (7:18) to download a High Definition (HD) movie of 5GB in Nigeria. This means that Nigeria’s Internet download speed has nosedived in the past two years from 95th in 2017 to 176th in 2019.

A telecoms expert, Kehinde Aluko, while describing the report as apt, said lack of access and slow Internet connectivity, apart from hampering economic growth and job creation, also inhibit Nigeria’s move to keep up with global trends on innovations and creativity.

On the price war, which supposedly is a contributing factor to the quality of service, the chief executive officer of Spectranet, Ajay Awasthi, in an interview with The Guardian, said war of any kind is destructive by nature, and a price war is no exception.

Awashti, who called for a review of the suspended Data Price Floor policy, described price war as a shortsighted ploy to gain market share. “It may be touted as a ‘customer friendly’ move. But over a period of time, a price war results in a significant destruction of value for the industry, forcing the players to degrade quality of services. A price war is not sustainable in the longer term and is a lose-lose proposition for both the operators and the customers,” he said.

The Spectranet CEO explained further: “The hapless customers finally end up at the receiving end and are made to suffer through poor quality of service. For our firm, we stay committed to providing high quality, high speed broadband to our customers. We believe in delivering a superior customer experience through better understanding of their needs and through differentiated tariff plans backed by excellent customer service.”

Explaining how Internet speed affects the economy, a telecoms expert, David Venn, said: “If a subscriber is located in an area with access to faster technologies such as fibre or 4G, he will have a fast Internet access at home and business. For instance, let’s say the average Internet speed in Nigeria is 3.9Mbps. But if you are in Lagos, you could choose to buy a 4G connection and experience 10 to 20Mbps. If faster speeds are available, you do not need to worry about the average speed, hence it should not be a cause for slowing down economic activity.”

Venn continued: “However, if you live or work in an area without fast access, then, for certain types of business, this would be an impediment to growth. Note also that if you do not have a fast access, your average speed is likely to be considerably worse than the nation’s average, because that’s the way averages work. This is the ‘Digital Divide’.”

The president, Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, in one of his interviews with The Guardian, believed that with increases in Internet speed, there is a corresponding increase in efficiency and productivity in the workplace where ICT is embedded. He argued that with interconnected systems and collaborative working relationships in place, it is important that ideas, innovation and development are harnessed in a speedy manner, not only to secure the intellectual patent rights, but to also fully leverage the multiplier effect that digitalisation brings to the value chain that might already be in place.

Meanwhile, the executive vice chairman of the NCC, Prof. Umar Danbatta, said that experience of early depletion and rise in data consumption by telecoms consumers may not necessarily be the results of illegal deductions or sharp practices by mobile network operators.

Danbatta, at a recent telecoms gathering in Abuja, spoke on what the NCC had been doing in key areas of its regulatory mandate which include reduction of cost of data, stemming the tide of ‘illegal deduction’ of data, improving service quality, as well as efforts to ensure a continuous compliance with the maximum two per cent Call Drop Rate (CDR) directive to telecoms operators on quality of service.