Nigeria: NCC Crashes Voice Tariffs, Favours New Entrants

Telecoms, Rates, Offers and Coverage

Nigerian subscribers' demand for the cost of voice tariffs to be lowered has been answered with a new mobile termination rates (MTRs) also known as interconnect rates introduced yesterday night by the Nigerian Communications Commission (NCC) with effect from April 1, 2013.

According to the regulator who retained Asymmetrical Rate, which favours newer operators, the new entrants and small operators irrespective of the originating network charge N6.40kobo from April 1, 2013; N5.20kobo from April 1, 2014 and N3.90kobo from April 1, 2015.

The termination rates for voice services provided by other operators irrespective of the originating network shall be N4.90kobo from 1st of April, 2013; N4.40k from 1st of April, 2014; and N3.90k from 1st of April 2015.This new determination rate shall take effect from 1st of April 2013, and remain valid and binding on licencees for the next three years until further review by the Commission.

A statement from Mr. Tony Ojobo, director, public affairs, NCC, said the new MTRs which have been significantly reviewed downwards were informed by the depth of competition in the industry while taken into consideration the position of new entrants.

Ojobo said NCC "After comprehensive consultations with various stakeholders, has released a new set of interconnection rates determination for voice services. New entrant is defined as newly licenced operator entering an existing or new market within zero to three years. Small operator is defined, for the purpose of the determination, as an existing operator with a market share of 0 - 7.5 per cent in terms of subscriber base."

He said the current interconnection rate regulation was implemented through the Commission's Interconnection Rate Determination issued on 21st December, 2009. "Since then, the Nigerian Communications Market has seen tremendous growth in both subscriber numbers as well as traffic volumes and available technologies (e.g. 3G). The current rate which is symmetric to all operators is N8.2."

In June 2012, the NCC appointed PriceWaterhouseCoopers LLP to undertake a cost study for voice interconnection. In line with its commitment to a policy of openness, transparency, fairness, and participatory regulation, the comission informed stakeholders in July 2012 of its engagement of PWC to advise on the review of interconnection rates for mobile and fixed telephony services.

Mobile operators in the market have kicked against asymmetrical rates saying the regulator should approve a single call determination rate instead of offering new entrants into the market. At a stakeholder forum held in Lagos early February to discuss the incoming interconnect rates, the GSM operators asked for a level playing field.