The Nigerian Communications Commission (NCC) has started a review of interconnection rates for voice call and SMS services provided by telecom operators, which might result in higher prices for mobile users nationwide.
This review is occurring eight years after the implementation of the current Mobile Termination Rate (MTR) system, under which operators now pay between N3.90 and N4.70 per minute for calls routed to different networks.
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At a stakeholders’ forum in Lagos to discuss the MTR, KPMG partner Wole Adenekan explained that the review is necessary due to significant economic and technological shifts within the telecommunications sector since 2018.
He highlighted that the decline in the naira’s value, rising inflation, surging energy costs, and increased equipment prices have greatly affected operators’ cost structures.
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Adenekan clarified that setting rates too low may hinder infrastructure investment, whereas rates that reflect actual costs would promote operational efficiency, enhance competition, and positively impact economic growth.
“A poorly set MTR can allow larger operators to push out smaller competitors by imposing high termination fees. On the other hand, a cost-reflective rate fosters a fair competitive environment,” he remarked.
He cautioned that increased termination charges often lead to higher retail prices for consumers.
Adenekan also noted that the introduction of 5G technology and the growing use of artificial intelligence (AI) and the Internet of Things (IoT), as well as competing Over-the-Top (OTT) platforms, have rendered the current interconnection framework obsolete.
In her comments, Omotayo Mohammed, head of the NCC’s Competition and Tariff Unit, characterized the review as a crucial economic measure aimed at updating regulatory frameworks to keep pace with rapid advancements in the telecom sector.
She mentioned that the commission would also review existing retail price controls and asymmetry arrangements to safeguard consumer interests.
