The Nigerian Communications Commission (NCC) has begun the review of interconnection rates for telecommunication operators’ call and SMS services in the country.
The review is happening eight years after the last review.
Interconnection rates or Mobile Termination Rate (MTR) is the wholesale charge one network pays to another when its customer places a call that is received on a different network. It is the underlying pricing mechanism that connects every Nigerian mobile subscriber regardless of their network with every other.
The current rate is N3.90 per minute/N4.70 per minute.
If the rate is eventually reviewed upward, telecom users in the country will pay more for call and SMS services.
A partner at KPMG, Wole Adenekan, who disclosed this at a stakeholders’ consultative forum on the determination of mobile termination rate (MTR) in Lagos on Tuesday, said rates that are too low would fail to signal the true cost of providing termination services and can deter infrastructure investment.
He stated that cost-based rates reward efficient investment and improve the country’s GDP.
“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.
He said inflated termination charges are ultimately borne by end-users through higher retail prices.
Adenekan said significant naira devaluation, inflation, and rising energy and equipment costs since 2018 have materially altered operator cost structures, hence the review of the current rate regime.
He added that 5G rollout and AI/IoT adoption are also reshaping network usage patterns, cost structures, and service delivery models, making legacy interconnection frameworks less representative of current realities.
According to him, competition by Over-the-top players, who are capturing voice and messaging traffic, is reducing reliance on traditional interconnection and weakening legacy wholesale revenue streams.
He added that the 2018 MTR determination has never been updated for local rates, adding that the 2022 amendment addressed International Termination Rate only.
Head of competition and tariff unit policy department at NCC, Omotayo Mohammed, said the review constitutes a significant economic intervention intended to align NCC’s frameworks with the rapid pace of change in the telecoms sector.
Mohammed said the review would examine existing retail price controls and asymmetry arrangements with a view to safeguarding consumer welfare.
“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,” the NCC official said.
