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11-Apr-2025

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The Nigerian NCC Moves to Regulate Unused Airtime and Data 2 weeks ago

The Nigerian Communications Commission (NCC) has taken significant steps to regulate the issue of unutilized and unclaimed airtime and data among telecom consumers. Recently, the NCC held an Industry Consultative Forum in Abuja to discuss the development of a regulatory instrument aimed at addressing this pressing matter, which affects both consumers and telecom operators.

The forum saw participation from various industry stakeholders, emphasizing the importance of collaboration in tackling the challenges surrounding unused prepaid balances. Speaking at the session, Dr. Aminu Maida, the Executive Vice Chairman and Chief Executive Officer of the NCC, was represented by Rimini Makama, the Executive Commissioner for Stakeholder Management. Makama highlighted the telecommunications sector's vital role in driving economic growth, promoting financial inclusion, and facilitating digital transformation across Nigeria.

"Mobile services have become essential for millions of Nigerians, providing flexibility and affordability through prepaid plans. However, as the sector continues to evolve, we must address emerging challenges that may compromise consumer rights," Makama stated. One such challenge is the status of prepaid balances when accounts become inactive.

To ensure that consumer rights are protected while maintaining effective regulatory oversight and industry sustainability, the NCC aims to strike a balance through constructive discussions at the forum. A key topic of concern is the fate of unclaimed recharges.

The Quality-of-Service Business Rules 2024 outlines that if a prepaid line fails to generate revenue for six months, it must be deactivated. If the account remains inactive for an additional six months, the line may be recycled. However, subscribers retain the right to reclaim their unused credit within one year, provided they can prove ownership of the account.

The debate remains: Should telecom operators be mandated to refund unused airtime, or should the "use it or lose it" principle prevail? The NCC is focused on creating a framework that prioritizes consumer protection while ensuring the industry's efficiency and competitiveness.

"This discussion is crucial for refining our policies and ensuring our regulatory framework aligns with the dynamic nature of the market. I encourage open and constructive engagement, as your insights are invaluable in shaping a framework that balances the interests of all stakeholders," noted Makama.

Key Takeaways from the Draft Guidance on Unclaimed Recharges

Regulatory Framework:

The NCC derives its authority from Sections 4(b) and (c) of the Nigerian Communications Act 2003, empowering it to protect consumers from unfair practices in the communications sector.

Core Principles:

• Revenue Generating Events (RGEs): Actions that generate income for operators and determine the active status of prepaid accounts.

• "Use it or lose it" Principle: This framework stipulates that unused resources are forfeited without refund after a designated period of inactivity.

Challenges with Refund Policies:

• Airtime is not recognized as legal property that can be inherited.

• Prepaid credit is not equivalent to cash or a financial asset.

• Implementing standardized refund procedures poses operational difficulties.

• Administrative burdens arise from processing claims and identifying recipients.

International Context:

• The "use it or lose it" principle is commonly accepted in prepaid-dominant markets around the world.

• Many jurisdictions, including the United States, United Kingdom, South Africa, Kenya, and India, permit the forfeiture of unused balances following inactivity periods.

• Consumer protection in these regions focuses more on transparency rather than mandatory refunds.

Proposed Solutions:

• Subscribers with unclaimed recharges may receive alternative service options such as voice, data, and value-added services, but unused balances cannot be monetized.

• Operators will be required to conduct consumer education campaigns regarding the new management approach to unclaimed recharges.

• Subscribers will be notified about service options available for churned accounts.

Implementation Timeline:

• Operators must comply with the guidance requirements within 90 days of issuance.

• The NCC will review audit reports concerning unclaimed recharges within 10 working days.

Enforcement Mechanism:

• The NCC will conduct periodic audits to ensure compliance with the new regulations.

• Non-compliance may lead to penalties, including fines and other regulatory actions.

The NCC's initiative to regulate unused airtime and data aims to enhance consumer protections, promote transparency, and facilitate fair practices within Nigeria's telecommunications sector. By addressing the issue of unclaimed recharges, the Commission seeks to uphold consumer rights while ensuring the sustainability of the industry.

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