NATCOMS reacts to NCC's interconnection rates review

February 21, 2017
3 min read

On the 15th of February, news about NCC’s plan to review interconnection rates for voice service circulated widely. According to reports, the executive vice chairman of NCC, Prof Umar Danbatta revealed this in Abuja at a “stakeholder’s forum on cost-based study” for the determination of mobile voice termination rate. He revealed that the commission had carried out an in-depth cost study and made a determination on the interconnection rates for voice services which took effect from April 1, 2013.

On the progress of the Nigerian communications market, he said

“Since the last determination, the Nigerian Communications Market has witnessed tremendous growth in both, subscriber numbers as well as traffic volumes. Changes in available technologies (2G, 2.5G 3G, and 4G) and other network elements, including global financial markets which have an impact over inputs such as the cost of capital. The scale of changes will inevitably affect the unit cost of providing services including interconnection and may lead to differences between regulated interconnection rates and underlying costs which in turn may result in differences between on-net and off-net retail tariffs”.

“It is very important we ensure that interconnection services are not only fairly priced and non-discriminative but should reflect the cost of providing such services in the market. It is in this regard that the Commission has decided to review the rates set in its 2013 Determination in the light of current market realities”

According to these reports, by reviewing the 2013 determination, the NCC would be leveling the playing field for all operators and in line with the international standard practice, the NCC would ensure that interconnection rates reflect the cost of termination on the networks.

Reacting to this news, the National Association of Telecommunications Subscribers (NATCOMS) has appealed to the NCC not to review the interconnection rates for voice services upward. Chief Deolu Ogunbajo, President of NATCOMS this past weekend stated that the rates review was not necessary especially with the present situation of the country.

Interconnection rates also known as termination rates are charges that telecommunications operators charge one another to deliver calls between networks. For example, when a person makes a call from an MTN number to a GLO number, MTN would charge the customer for the call while Glo would charge MTN for terminating the call on its network. This rate, therefore, forms part of MTN's cost of providing the call to its customers. Therefore, the higher the fee GLO charges MTN for calls made to its network, the higher MTN would charge its customers for calls made to GLO numbers.

In the determination that took effect from March 2013, major operators were to terminate calls on smaller operators’ networks at N6.40, while the smaller operators charged major operators’ networks at N4.90. However, NATCOMS is appealing to NCC to reduce these rates in order to enable Nigerians pay less for calls in this economic recession.

Although NCC has not stated whether or not the termination rates would be reviewed upwards, Nigerians would not be wrong to assume the commission would increase the rates. In October 2016, NCC reviewed the International Termination Rate (ITR); interconnection charges set by mobile traffic carriers from ₦3.90/min to ₦24.40/min. Judging from this, it may be safe to assume the interconnection charges for voice calls may be increased even though the NCC has refuted every claim that has pointed in this direction.

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