TheCable

The Nigerian Communications Commission (NCC) has set $0.045 as the new international termination rate (ITR) for voice calls.

In a statement on Monday, the commission said the new rate takes effect from January 1, 2022.

ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.

This is different from the mobile termination rate (MTR), which is the rate local operators pay to another local operator to terminate calls within the country.

The new ITR replaces the existing one at N24.40k and is being received in naira by the operators.

With the new development, mobile network providers in Nigeria will begin receiving revenue from all international calls in US dollars from next year.

“The $0.045 rate is the floor price for ITR services and shall take effect from January 1, 2022. The rate is to be paid in US Dollar to enable Nigerian operators to receive an increasing rate in Naira terms to accommodate devaluation,” the statement reads.

“No licensee shall charge and/or receive effective rate per minute below determined ITR floor rate.

“As such, payment discounts, volume discounts, and any other concession that has the effect of bringing the effective ITR lower than the rate determined shall be deemed a contravention of the new determination and will attract sanctions in line with the Nigerian Communications (Enforcement process, etc.) Regulations, 2019.”

The NCC explained that the ITR floor is the minimum that can be charged.

This implies that operators can negotiate with their international carriers/partners to arrive at a rate above the floor.

However, while the ITR only pertains to the cost of bringing traffic into Nigeria, the agency said Nigerian operators will continue to pay the regulated MTR, which is the local termination rate, among themselves.

It added the MTRs of N3.90 (for generic 2G/3G/4G operators) and N4.70 (for new entrant operators) determined in 2018 would continue to apply for local call terminations until a new determination is made by the commission.

According to NCC, the ITR being denominated in naira had multiple negative impacts on operators, which was further exacerbated by a series of naira devaluations, which ultimately left Nigeria from being a net receiver with respect to international minutes to a net payer.

To remedy the situation, the commission had engaged the service of Messrs Payday Advance and Support Services Limited to undertake a cost-based study of voice ITR that is most suitable for the Nigerian telecommunications industry.

Commenting on the development, Umar Danbatta, executive vice-chairman (EVC) of NCC, said in arriving at the new ITR of $0.045, “the commission has carefully considered the information provided by stakeholders and taken a view on parameters and regulatory measures.”

He added that the process of arriving at the ITR had been conducted transparently with maximum clarity to all parties without compromising the confidentiality of commercially-sensitive information.

“We are confident that the result of the review will make a significant contribution to the development of the telecoms sector in Nigeria and be beneficial to subscribers, operators, and the country at large,” he said.