The Nigerian Communications Commission will adjust the International Termination Rate for Voice Calls which is below that rate charged by most countries, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, has said.
The EVC said this at the final Stakeholders’ Forum for the presentation of the study on cost-based pricing of mobile ITR.
The NCC commenced the review with stakeholders in March, 2020
ITR refers to interconnection charges set by mobile traffic carriers as carrier-to-carrier charges and paid to local operators by international operators to terminate calls in Nigeria.
Mobile Termination Rates (MTR), is the rate local operators pay to another local operator to terminate calls within Nigeria.
NCC said it has concluded the process for determining the cost-based price of ITR to ensure healthy competition on traffic handling for voice services between local and international operators in the country.
Danbatta said the “overriding need for regulatory options and intervention in relation to the international termination rate in the voice market segment is predicated on some intractable challenges, most common with economies with severe macroeconomic volatility such as ours.”
Danbatta said that the NCC guideline introduced in 2013 on the rate for ITR was misconstrued by operators at that time to mean that ITR should be the same rate as the MTR, consequently ignoring the international cost portion.
He said charging ITR and MTR at the same rate was unfair to Nigeria operators.
He said, “Arising from these is the persistent fact that Nigeria’s ITR is below that of most countries with which it makes and receives the most calls, making Nigerian operators perpetual net payers.
“The obvious implication of this is seen in the attendant undue pressure on the nation’s foreign reserves, which continue to get depleted by associated net transfers to foreign operators on account of this lopsidedness.”
He noted that regulating the ITR was imperative for Nigeria as a developing country with volatile currencies in order to prevent or mitigate the imbalance of payments with international operators.
But he admitted facing difficulties in arriving at a rate that will balance the competing objectives of economic efficiency while, at the same time, allowing operators the latitude to generate reasonable revenues.
The EVC said, “Where ITR is not regulated, it tends to converge to the MTR and for a market like Nigeria with major supply side challenges, the socio-economic implications and attendant backlash can only be imagined.”