By Sabiu Abdullahi
The Nigerian Communications Commission (NCC) has commenced a fresh review of interconnection rates for telecommunications operators across the country, a move that could lead to higher costs for voice calls and SMS services if approved.
Interconnection rates, also known as Mobile Termination Rates (MTR), are charges paid by one telecom operator to another when a customer places a call to a subscriber on a different network. The current rates stand at between ₦3.90 and ₦4.70 per minute.
Industry stakeholders discussed the planned review during a consultative meeting on mobile termination rates held in Lagos on Tuesday.
Speaking at the event, KPMG partner, Wole Adenekan, said interconnection rates should reflect the actual cost of providing services. According to him, rates that are set too low may discourage investment in telecommunications infrastructure.
“A mis-set MTR can enable dominant operators to foreclose smaller competitors through high termination barriers. A cost-reflective rate supports a level competitive playing field,” he said.
Adenekan also noted that consumers could eventually bear the burden of excessive termination charges through higher retail service costs.
He explained that economic realities have changed significantly since the last review in 2018. He cited the depreciation of the naira, rising inflation, higher energy expenses and increasing equipment costs as factors that have altered operators’ cost structures.
The KPMG official further stated that the expansion of 5G technology and the growing adoption of artificial intelligence and Internet of Things (IoT) services have transformed network usage patterns and service delivery models. He added that messaging and voice services provided by Over-the-Top (OTT) platforms have reduced dependence on traditional telecom interconnection services.
According to him, the local interconnection rates established in 2018 have not been revised, while the 2022 review focused only on international termination rates.
In her remarks, the Head of Competition and Tariff Unit at the NCC’s Policy Department, Omotayo Mohammed, described the review as an important economic measure aimed at ensuring the commission’s regulatory framework keeps pace with developments in the telecommunications sector.
She said: “Our existing national interconnection rate regime was set out in the Commission’s Interconnection Rate Determination of June 1, 2018, and was subsequently adjusted through an amendment to the Mobile International Termination Rate (ITR) in September 2022.
“The Commission has historically maintained a regular cycle of periodic reviews to keep its frameworks relevant.
“However, the years since our 2018 determination have been marked by unprecedented and rapid change. The Nigerian telecommunications market has undergone considerable transformation, reflected in swift expansion, shifting market dynamics, the commercial deployment of advanced technologies such as 5G, and the emergence of new ecosystem players including Mobile Virtual Network Operators (MVNOs).
“At the same time, both global and domestic macroeconomic conditions have shifted considerably. Changes in exchange rate regimes, and inflation rates have substantially altered the cost structures associated with providing communications services in Nigeria.
“For regulation to remain effective in a fast-moving market, our frameworks must evolve in step with it. Pursuant to Section 108 of the Nigerian Communications Act (NCA) 2003, the Commission is therefore acting on its mandate to ensure that telecommunications tariffs and charges remain reasonable, cost-reflective, and non-discriminatory”.
Mohammed added that the exercise will also assess existing retail pricing controls and asymmetry arrangements to ensure that consumer interests remain protected while maintaining fair competition within the sector.
