The Nigerian Communications Commission (NCC) is contemplating a potential review of the Annual Operating Levy (AOL) applied to telecom companies, with a focus on improving regulatory compliance within the sector.
The AOL, which telecom licensees, particularly network operators, pay to the NCC, is calculated as a percentage of the operator’s net revenue after certain costs, such as roaming, interconnect, and bandwidth, are deducted. Currently, network operators contribute 2.5% of their net revenue as AOL, while non-network operators pay 1% of their Gross Revenue.
According to a recent report by the NCC’s Legal and Regulatory Services Department, the telecom sector saw a 22.9% increase in AOL collection rates since the last regulatory review in 2022. However, the compliance rate for AOL payments has decreased slightly, from 28% in 2022 to 26% in 2023. Despite these figures, the NCC has taken enforcement actions, with 45 instances of non-compliance in 2023, compared to 21 in 2022.
The report also emphasized the need to broaden the AOL collection scope, urging the development of a comprehensive compliance roadmap to enhance adherence across all telecom license categories.
In his opening address at a recent stakeholders’ forum, Dr. Aminu Maida, Executive Vice Chairman of the NCC, explained that the Regulatory Impact Assessment (RIA) process allows key stakeholders to provide feedback and suggest improvements that could enhance legislation. “These enhancements will ensure the effective application and implementation of these subsidiary legislations,” Maida said.
Represented by Chizua Whyte, Head of Legal and Regulatory Services, the NCC reiterated its commitment to maintaining a fair, transparent, and consumer-focused telecom environment. Whyte explained that the RIA serves as a vital tool for evaluating existing regulations, fostering market competition, and improving the use of limited resources.
The assessment, she noted, identified opportunities to streamline processes, clarify obligations, and eliminate outdated provisions that could impede innovation or investment. Through this review, NCC aims to make necessary updates to subsidiary legislation, ensuring they align better with current industry trends and future developments.
“The successful completion of this RIA underscores our commitment to creating a regulatory environment that fosters fairness, transparency, and innovation,” Whyte added. She further highlighted that the findings of this assessment would guide NCC’s future regulatory review agenda, laying the foundation for reforms to meet evolving market needs.