The Nigerian Communications Commission (NCC) has set $0.045 as the new International Termination Rate (ITR) for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria.
The new rate which is the floor price for ITR services is expected to take effect from January 1, 2022, and is to be paid in US Dollars to enable Nigerian operators to receive an increasing rate in Naira terms to accommodate devaluation.
This disclosure is contained in a press statement titled, ‘NCC sets new Mobile International Termination Rate for Voice Services’, issued by NCC’s Director for Public Affairs, Dr Ikechukwu Adinde, on Monday, December 20, 2021, and can be seen on its website.
NCC in the statement said that no licensee shall charge and/or receive effective rate per minute below the determined ITR floor rate.
It warned that payment discounts, volume discounts and any other concession that has the effect of bringing the effective ITR lower than the rate determined shall be deemed a contravention of the new determination and will attract sanctions in line with the Nigerian Communications (Enforcement process, etc.) Regulations, 2019.
The ITR Floor is the minimum that can be charged. Operators will be free to negotiate a rate above the floor and this will be entirely left to commercial negotiation between the operators and international carriers/partners.
However, while the ITR only pertains to the cost of bringing traffic into Nigeria, Nigerian operators will continue to pay the regulated Mobile Termination Rate (MTR), the local termination rate among themselves.
The statement partly reads, ‘’The Nigerian Communications Commission (NCC) has determined the new International Termination Rate (ITR) for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria at $0.045.
‘’The MTR of N3.90 for generic 2G/3G/4G operators and N4.70 for new entrant Long Term Evolution (LTE) operators determined in 2018, will continue to apply for local call terminations until a new rate is determined by the Commission pursuant to its powers as enshrined in the Nigerian Communications Act (NCA), 2003.
‘’The subsisting regime of interconnection rates was sustained by the Commission’s Mobile (voice) termination rate issued on June 1, 2018. In the determination, it was stated that the ITR of N24.40 determined in 2016 will continue to apply until a new determination is made.
‘’The ITR, being denominated in Naira had multiple negative impacts on local operators which was further exacerbated by episodes of devaluation of naira which ultimately left Nigeria from being a net receiver with respect to international minutes to a net payer.
‘’The Commission also observed that operators continue to face series of challenges occasioned by the denomination of ITR in Naira, necessitating a need for a cost-based study on ITR. In view of the foregoing and in fulfillment of its statutory mandate of periodic review of regulatory policies, the Commission engaged Messrs’ Payday Advance and Support Services Limited to undertake a cost-based study of voice MTR that is most suitable for the Nigerian telecommunications industry.’’
The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, said that in arriving at the new MTR of $0.045, the Commission has carefully considered the information provided by stakeholders and taken a view on parameters and regulatory measures in the light of relevant information such as international experience, cost model results, the state of competition in the sector and the Nigerian macro-economic environment.
Danbatta added that the process of arriving at the ITR had been conducted transparently with a view to providing maximum clarity to all parties without compromising the confidentiality of commercially-sensitive information.
He said, “We are confident that the result the review will make a significant contribution to the development of the telecoms sector in Nigeria and be beneficial to subscribers, operators and the country at large.’’
Danbatta, on behalf of the Board and Management of the NCC, extended the Commission’s gratitude to all operators and industry stakeholders, who submitted information relating to the regulation of interconnection rates and the costing models as well as the consultant, for their participation in the process leading to the Determination.
Recall that in June 2021, the NCC announced plans to roll out a new Mobile International Termination Rate (ITR) following the finalization of the process for determining the cost-based price of ITR to ensure healthy competition on traffic handling for voice services between local and international operators in Nigeria.
Danbatta had said that the cost-based study became imperative, following previous efforts at finding an optimum price for the termination of international voice services that will be beneficial to all relevant industry stakeholders.