The new international mobile termination rate into Nigeria that was fixed at $0.045 will come into force from January 1, 2022, the Nigerian Communications Commission (NCC) says.
Dr. Ikechukwu Adinde, NCC Public Affairs Director, announced today in a statement made available to Technology Times that the International Termination Rate (ITR), the telecoms industry’s lingo for voice services paid by overseas telecoms carriers for terminating international calls on local networks in Nigeria, has been pegged at $0.045 by the telecoms regulator.
“The new rate is contained in the ‘Determination of Mobile International Termination Rate’ issued by the Commission on November 25, 2021. The $0.045 rate is the floor price for ITR services and shall take effect from January 1, 2022. The rate is to be paid in US Dollar to enable Nigerian operators to receive an increasing rate in Naira terms to accommodate devaluation”, Adinde says.
NCC on Breach of International Mobile Termination Rate
Following the NCC rate determination, Adinde explains that “no licensee shall charge and/or receive effective rate per minute below determined ITR floor rate. As such, 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.”
Meanwhile, for local voice traffic, the mobile termination rate (MTR) of ₦3.90 for generic 2G/3G/4G operators and ₦4.70 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 NCC Public Affairs Director says.
According to him, “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.”
Professor Umar Garba Danbatta, NCC Executive Vice Chairman says that the telecoms regulator “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.”
Danbatta says that “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.”
In arriving at the new MTR of $0.045, Danbatta adds that “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.”
According to him, 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.
“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”, the EVC says while on behalf of the Board and Management of the NCC, extending NCC’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.