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Nigeria's telecom regulator to review mobile voice termination rates

Nigeria's telecom regulator to review mobile voice termination rates

The Nigerian Communications Commission (NCC) has confirmed it will review mobile voice termination rates in Nigeria.

NCC Executive Vice Chairman Prof Umar Garba Danbatta said that the review is necessary because of changes in the industry since the last exercise conducted in 2013, and it would result in more effective regulation and increase competition.

"Since the last determination, the Nigerian Communication Market has witnessed tremendous growth in both subscriber numbers as well as traffic volumes. Changes in available technologies, (2G, 2.5G, 3G and 4G) and other network elements, including global financial markets which have an impact such as the cost of capital," Danbatta said.

"The scale of changes will inevitably affect the unit cost of providing services including interconnection and may lead to differences between regulated interconnection rates and underlying costs which in turn may result in differences between on-net and off-net retail tariffs."

He said the Commission is trying to ensure that interconnection services are fairly priced, non-discriminative and reflect the cost of providing such services in the market.

"It is in this regard that the Commission has decided to review the rates set in 2013 Determination in the light of the current market realities," he said.

He opined that the supply of industry statistical data is most crucial to the success of determining appropriate interconnection termination rates for the telecommunications industry. Centrally, he said NCC has the obligation to create a level playing field for all operators.

"In line with international practices, the commission shall ensure that interconnect rates reflect the cost of termination on the networks," he said.

"The study provides the opportunity to thoroughly examine the emergence of grey market activities in the telecommunication industry in Nigeria such as call refilling, call masking and sim-box fraud as a result of the introduction of an interim International Termination Rate (ITR) for inbound international traffic."

PricewaterhouseCoopers LLP (PwC) has been tasked with carrying out an impact assessment on the subsisting interconnect regime; identify shortfalls on the subsisting interconnection rate regime and provide workable solutions.

"They will also determine if there is need to have different termination rate for national/domestic and international traffic; determine the mobile termination rate for voice services using appropriate cost modelling techniques for new entrants, small operators and existing (or) big operators. And also to determine the appropriate basis for glide path if necessary; develop a suitable definition of new entrants,  small operators to enjoy the benefits of asymmetric rates; determine the cost per minute session for the use of unstructured supplementary service data," Danbatta said.

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