Business Hilights
Tracking Nigeria's Headline Business News Online

Only upward review of data price floor’ll drive more investment on networks—Venn

The managing director of Spectranet 4G LTE Limited, Mr. David Venn has sounded it loud and clear that the prevailing pricing template for data services does not have what it takes to spur the needed investments by networks to raise quality of service.

In a telephone interview weekend, he revealed to Business Hilights that because the operators are charging beyond what it should be in data services and to a great extend below cost price for data, there is no form of encouragement for more investments on networks.

He said the scenario is drawing back the needed speed in the advancement of technology for economic development and drive to knowledge economy.

Venn revealed that the main problem for major mobile internet services providers is that whereas data pricing is not favourable for them, “they are complaining that people are using their data for other things including WhatsApp calls and others which have degraded returns from the traditional sms services”.

“I think there should be a review of the charging template which is the price floor. This will help them to charge the proper price for data and make the segment profitable.

“GSM firms need better price floor so that they can cover cost, but we at Spectranet, sell data and we want people to buy more data and use it do whatever they so wish.

“You know certain data centric applications tend to eat into GSM companies main revenue areas and that is why there is much confusion in that segment, but we are not disturbed as we want Nigerians to use their data as they wish and enjoy the advantages coming with it.

“In fact, we encourage our customers to use WhatsApp because that is the new world order in one-to-one communication that is the most pocket friendly and very accessible technology. This advice to our customers is very important because we are data masters and do not offer voice services, but as you know, WhatsApp calls are enabled in the App.

“It is important to make certain explanations to people. Spectranet is offering data service and not voice, but WhatsApp is offering voice.

Giving more insights on his company’s offerings, Venn averred that “We at Spectranet offers data services which will enable you to do whatever you want and that is how and where the world is going”.

“Whereas voice is just one service, data is coming with multiple alternatives for endless enjoyment for data users including even voice, browsing, music, streaming live, so much more.

On the way forward, Spectranet boss said “I think NCC is looking at that. It tried in December last year and there were some confusion. It was not popular then. I think pricing floor needs to be recalibrated because the current pricing is below cost price”.

“The major problem caused by the poor price floor is that it does not encourage anybody to invest more in the segment.

Rollout of data networks by many companies are on hold because the current price floor cannot drive investments.

“This is so because if the price you charge is below cost price, you cannot be encouraged to invest more in network upgrade and development.

Currently, operators are looking onto NCC for immediate review of the price floor. I recall it used to be extremely high before and they reduced it and later want to go back, there was acceptability problem which frustrated the entire move.

“Let me tell you, most operators’ want the price floor back as soon as possible, but I think it’s only one or two that are not in tune.

Only one is trying to take advantage of the competition. It is selling below cost price to drive another segment it’s not doing well and also to keep on what looks like a sub sector competition.

Venn who expressed worry on why GSM networks cannot speak uniformity of purpose on the challenges and need for upward review of data price floor, he said “Like I said before, I think there is only one or two operators that are against the price floor review. I believe aside that one or two, most of them want the change today or tomorrow, because as it is, it does not make any business sense”.

“Unfortunately at the current price, many of them that oppose price change are providing not too good data services. The scenario takes away capacity for voice as well because it’s same network and same 3G. If they give out cheap data, it will affect network performance for voice.

“Currently, they are having problems expanding their capacities because of the problem of access to foreign exchange. Now they are having problems expanding their capacities, they cannot give even better services including voice.

Venn added further that “For smart better results, I think the data price need to go up to encourage investments. Data price floor needs to be back to encourage a regime of massive investment on networks that can drive seamless data and voice services at a flexible price for both subscribers and operators”.