NCC Sets New Mobile International Termination Rate for Voice Services

The Nigerian communications commission (NCC) has set new mobile international rate (ITR) for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria at $0.045. The new rate which shall take effect from January 1, 2022, is the floor price or the minimum that can be charged for ITR services. The essence of charging this new rate in the U.S. dollars is to enable Nigerian operators to receive an increasing rate in Naira terms should there be naira devaluation.

NCC Sets New Mobile International Termination Rate for Voice Services

The Nigerian communications commission (NCC) has set new mobile international rate (ITR) for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria at $0.045. The new rate which shall take effect from January 1, 2022, is the floor price or the minimum that can be charged for ITR services. The essence of charging this new rate in the U.S. dollars is to enable Nigerian operators to receive an increasing rate in Naira terms should there be naira devaluation. The new ITR is denominated in dollars to help the local operators. Being denominated in Naira, the existing ITR 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.

 

The new ITR floor rate makes it unlawful for any local networks in Nigeria to charge below the fixed rate. Thus, no licensee shall charge and/or receive effective rate per minute below determined ITR floor rate. Therefore, all networks in Nigeria shall therefore put into consideration all payment discounts, volume discounts and any other concession so as not to go below the fixed ITR. However, operators are free to negotiate a rate above the floor and this will be entirely left to commercial negotiation between the operators and international carriers/partners.

 

The NCC had 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, given the challenges faced by the local operators as a result of the denomination of ITR in Naira. Based on different parameters as well as regulatory measures such as international experience, cost model results, the state of competition in the sector and the Nigerian macro-economic environment, in addition to the information provided by the stakeholders, the NCC arrived at the present cost-based ITR of $0.045 for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria.