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 revised 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 a growing 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 set will be considered a violation of the revised determination and will be subject to consequences under the Nigerian Communications (Enforcement Process, etc.) Regulations, 2019.
The ITR Floor is the very lowest amount that can be charged. Operators will be free to negotiate a fee that is higher than the floor, and this will be fully up to commercial negotiations between operators and overseas carriers/partners.
While the ITR only applies to the cost of carrying 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 announced on June 1, 2018, maintained the existing interconnection rate system. The ITR of N24.40 determined in 2016 will continue to apply until a new determination is issued, according to the ruling.
Because the ITR is denominated in Naira, it has had a number of negative effects for local operators, which have been worsened by episodes of Naira depreciation, which has turned Nigeria from a net recipient of international minutes to a net payer.
The Commission also noted that operators continue to confront a number of issues as a result of the ITR’s Naira denomination, indicating the need for a cost-based assessment on ITR. In light of the aforesaid, 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 obligation 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.”
He went on to say that the ITR was reached in a transparent manner, with the goal of providing maximum transparency to all parties while maintaining the confidentiality of commercially sensitive information. “We are convinced that the review’s findings will contribute significantly to the development of Nigeria’s telecoms industry, 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.
