– Sets the floor price for ITR at $0.045.
– The new rate goes into effect in January.
The new International Termination Rate (ITR) for voice services paid by overseas telecom carriers for terminating international calls on local networks in Nigeria has been set at $0.045 by the Nigerian Communications Commission (NCC).
The new rate is set out in the Commission’s ‘Determination of Mobile International Termination Rate,’ which was released on November 25, 2021. The $0.045 rate will be the floor price for ITR services beginning January 1, 2022. The rate will be paid in US dollars so that Nigerian operators can benefit from an increasing rate in Naira terms as the currency devalues.
No licensee is permitted to charge and/or receive an effective rate per minute that is less than the ITR floor rate. Payment discounts, volume discounts, and any other concession that lowers the effective ITR below the rate determined will be considered a violation of the new determination and will be subject to sanctions under the Nigerian Communications (Enforcement Process, etc.) Regulations, 2019.
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The ITR Floor is the absolute lowest amount that can be charged. Operators will be free to negotiate a rate that is higher than the floor, and this will be entirely up to commercial negotiations between operators and international carriers/partners.
While the ITR only applies to the cost of bringing traffic into Nigeria, Nigerian operators will continue to pay the regulated Mobile Termination Rate (MTR), also known as the local termination rate.
For local call terminations, the MTR of N3.90 for generic 2G/3G/4G operators and N4.70 for new entrant Long Term Evolution (LTE) operators determined in 2018 will apply until the Commission determines a new rate in accordance with its powers as enshrined in the Nigerian Communications Act (NCA), 2003.
The Commission’s Mobile (voice) termination rate, which was issued on June 1, 2018, maintained the existing interconnection rate regime. The ITR of N24.40 determined in 2016 will continue to apply until a new determination is made, according to the determination.
Because the ITR is denominated in Naira, it has had a number of negative effects on local operators, which have been exacerbated by episodes of naira depreciation, which has turned Nigeria from a net receiver of international minutes to a net payer.
The Commission also noted that operators continue to face a number of challenges as a result of the ITR’s Naira denomination, indicating the need for a cost-based study on ITR. In light of the foregoing, the Commission engaged Messrs’ Payday Advance and Support Services Limited to conduct a cost-based study of voice MTR that is most suitable for the Nigerian telecommunications industry, as part of its statutory mandate of periodic review of regulatory policies.
Prof. Umar Garba Danbatta, the NCC’s Executive Vice Chairman (EVC), said that in arriving at the new $0.045 MTR, “the Commission has carefully considered the information provided by stakeholders and taken a view on parameters and regulatory measures in light of relevant information such as international experience, cost model results, the state of competition in the sector, and the Nigerian macroeconomic environment.”
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He went on to say that the ITR was reached in a transparent manner, with the goal of providing maximum clarity to all parties while maintaining the confidentiality of commercially sensitive information. “We are confident that the review’s findings will contribute significantly to the development of Nigeria’s telecoms sector, benefiting subscribers, operators, and the country as a whole,” he said.
The EVC expressed the Commission’s gratitude to all operators and industry stakeholders who submitted information relating to the regulation of interconnection rates and costing models, as well as the consultant, for their participation in the process leading to the Determination on behalf of the Board and Management of the NCC.
December 20, 2021, Dr. Ikechukwu Adinde, Director of Public Affairs
