New telecom voice termination tariff takes effect March 1 – NCC
BY THERESA IGATA
Following the initial stakeholders’ meeting in February 2017 for the determination of termination rates for telecom companies, the NCC says a new study to determine the mobile voice termination rate which has kicked off will come up with a new rate that will take effect from March 1, 2018.
This was disclosed by the Executive vice chairman of the Nigerian communications commission, NCC, Professor Umar Danbatta, at a stakeholders’ forum on cost based study for the determination of mobile voice termination rate (the fee which one Telecom operator charges another for connecting and terminating calls on its network) for the Nigeria Telecom industry.
According to the EVC who was represented by the Executive Commissioner Stakeholder Management of the commission, Mr. Sunday Dare, interconnection is critical to the growth and development of the telecommunication industry. Without it, it could be difficult, if not impossible, for subscribers on one network to call subscribers of other networks.
It would be recalled that the Telecom industry has been divided over interconnect regime and in 2015 there was a debt of over N30bn amongst networks operators in Nigeria.
“A key component of the commercial aspects of interconnection is the determination of interconnection rate amongst network service providers.”
“Apart from the first interconnection rate which was based on negotiation between the incumbent operator (NITEL) and other operators, all other determinations have been handled by the commission due largely to two reasons, firstly, the negotiated interconnection rate was fret with many controversies, secondly, and more importantly, there was a need to ensure interconnection rates are cost-oriented in line with international best practice”.
Till date the EVC added, “there have been 4 determination regime (2003-2006 2009 and 2013 respectively). The 2003 regime was determined via a benchmarking exercise, while the 2006, 2009 and 2013 regime were cost-based and a glide path asymmetric regime was adopted in 2009 and 2013 respectively, while the 2013 regime expected to expire in 2016”.
Danbatta said that economic factors such as the rapid devaluation of the naira in 2016 and the fact that Nigerian network service providers became perpetual net payers to their overseas interconnecting partners, “this led to the commission setting an interim rate of N24.40 kobo per minute for inbound international traffic after carrying out a benchmarking exercise with other jurisdictions and this rate will subsist until a cost-oriented rate is determined by the commission”.
“Further to the above and the expiration of the 2013 interconnect region in 2016, the commission engage the services of the consultant PricewaterhouseCooper (PWC), UK to review and update the existing model taking into account the changes that have occurred over time and produce an interconnection cause model that is more in line with the current realities in Nigeria”.
The project Danbatta however said, formerly kicked off with the initial stakeholders forum held on 15th February, 2017 with the primary aim of introducing the consultant to the industry, informing operators of the objectives of the study, and seeking their active participation by way of providing the requisite data and other Information for the study. “This was immediately followed by one-on-one meeting with operators and subsequent visits to the offices of some operators for data collection and revalidation during the course of the study”, Danbatta said.
L-R: Mr Alex Ramos, Assistant Director, PriceWaterhouseCoopers (PWC) London; Engr. Austine Nwaulune, Director Spectrum Administration, Nigerian Communications Commission (NCC); Mr. Sunday Dare, Executive Commissioner Stakeholder Management, NCC; Ms. Josephine Amuwa, Director Policy Competition and Economic Analysis, NCC and Dr. Michael Hardt, Director PWC, London, during the stakeholders’ forum on cost-based study for the determination of mobile voice termination rate Thursday in Lagos.