The Nigerian Communication Commission (NCC) has determined the new International Termination Rate (ITR) for voice services paid by foreign telecom carriers for terminating international calls on local networks in Nigeria.
This new voice service rate at $0.045 (N18.46) is contained in the ‘Determination of Mobile International Termination Rate’ issued by NCC on 25 November 2021 and will take effect from 1 January 2022 to be paid in dollar to help Nigerian operators receive an increasing rate in Naira terms to accommodate devaluation.
According to the commission, no license shall charge or receive an effective rate per minute below the determined ITR floor rate, as such will attract sanctions in line with the Nigerian Communications(enforcement process) Regulations, 2019.
Umar Garba Danbatta, Executive Vice Chairman (EVC) of NCC, while commenting on the termination rate stated 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.
The EVC noted that the process of landing 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 of 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 said.
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Meanwhile, the commission stated that while the ITR only pertains to the cost of bringing traffic into the country, operators will continue to pay the regulated Mobile Termination Rate (MTR), the local termination rate among themselves.
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.
International Termination Rate, being denominated in Naira had multiple negative impacts on local operators which were 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 observed that operators continue to face a 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 fulfilment 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.
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 engagement in the process leading to the Determination
