NCC establishes dollar-based Int’l termination rate for voice calls

Effective January 1, 2022, the Nigerian Communications Commission (NCC) has set the new International Termination Rate (ITR) for voice calls at $0.045.

The new rate was published in the Commission’s “Determination of Mobile International Termination Rate” on November 25, 2021.

The floor price for ITR services is $0.045 and must be paid in dollars.

“No licensee shall charge and/or receive effective rate per minute below determined ITR floor rate,” NCC Director Public Affairs Dr. Adinde Ikechukwu said in a statement. As a result, 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.”

Prof. Umar Garba Danbatta, the NCC’s Executive Vice Chairman (EVC), said that in arriving at the new ITR of $0.045, the Commission carefully considered information provided by stakeholders and reached a decision on parameters and regulatory measures based on 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 process of obtaining the ITR was carried out in a transparent manner in order to provide maximum clarity to all parties while maintaining the confidentiality of commercially sensitive data.

“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 added.

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.

“The ITR Floor is the absolute minimum that can be charged,” he continued. 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.

“However, because the ITR only covers the cost of bringing traffic into Nigeria, Nigerian operators will continue to pay the regulated Mobile Termination Rate (MTR), which is the local termination rate, among themselves.”

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“Until a new rate is determined by the Commission pursuant to its powers as enshrined in the Nigerian Communications Act (NCA), 2003, the ITR of N3.90 for generic 2G/3G/4G operators and N4.70 for new entrant Long Term Evolution (LTE) operators determined in 2018 will continue to apply for local call terminations,” he stressed.

The N24.40k regime of 2016, according to the statement, has come to an end, adding that if it was priced in naira, it would be unfavorable to telecom operators.

“The existing interconnection rate regime was sustained by the Commission’s Mobile (voice) termination rate issued on June 1, 2018,” it continued.

“The ITR of N24.40 determined in 2016 will continue to apply until a new determination is made,” the determination reads.

“Because the ITR was denominated in naira, it had multiple negative effects on local operators, which were exacerbated by episodes of naira depreciation, which eventually turned Nigeria from a net receiver of international minutes to a net payer.”