Voice Services: NCC fixes $0.045 as new mobile International Termination Rate

*The Nigerian Communications Commission says ‘no licensee shall charge and/or receive effective rate per minute below determined ITR floor rate’, as the new service fee takes effect from January 2022

Isola Moses | ConsumerConnect

The country’s telecoms regulator, Nigerian Communications Commission (NCC), has set a new International Termination Rate (ITR) for voice services being paid by overseas telecoms carriers for terminating international calls on local networks in the West African country at $0.045.

The regulatory Commission Monday, December 20, 2021, disclosed that the fresh rate was contained in the ‘Determination of Mobile International Termination Rate’ issued by the Commission November 25, 2021.

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The NCC noted the $0.045 rate is the floor price for ITR services, and the fee 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, it stated.

The Commission also said: “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.

“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.”

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The telecoms regulator, however, stated while the ITR only pertains to the cost of bringing traffic into Nigeria, Nigerian operators would continue to pay the regulated Mobile Termination Rate (MTR), which is the local termination rate among themselves.

According to NCC, 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,” Dr. Ikechukwu Adinde, Director of Public Affairs of NCC, said in a statement.

The Commission further said that 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.

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The regulator noted it also observed that telecoms 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.

It stated: “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 his remark on the issue, Prof. Umar Garba Danbatta, Executive Vice-Chairman and Chief Executive Officer (EVC/CEO) of NCC, said 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.”

Prof. Danbatta stated 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.

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“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,” said he.

On behalf of the Board and Management of the NCC, the EVC/CEO 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.

ConsumerConnect reports termination rates in telecommunications refer to the wholesale tariffs charged by the operators of consumers receiving phone calls to the operators of the callers’ networks.

The termination rate is said to be one of the three components in the cost of providing telephone services, and the one subject to the most variation in the telecoms sector of the economy.

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