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NCC Begins Major Review of Telecom Interconnection Rates, Subscribers May Face Higher Call and SMS Costs
NCC Begins Major Review of Telecom Interconnection Rates, Subscribers May Face Higher Call and SMS Costs
The Nigerian Communications Commission (NCC) has commenced a comprehensive review of interconnection rates for voice calls and SMS services among telecommunications operators, a move that could ultimately lead to increased communication costs for millions of subscribers across the country.
The review, which represents the first major reassessment of the Mobile Termination Rate (MTR) framework in eight years, is expected to shape the future of telecom pricing in Nigeria as operators grapple with mounting operational expenses and evolving technological demands.
Under the current regime, telecommunications operators pay between ₦3.90 and ₦4.70 per minute for calls terminated on competing networks. The ongoing review is aimed at determining whether the existing rates still reflect the realities of the telecommunications market and the actual cost of providing services in today’s economic environment.
Speaking at a stakeholders’ consultative forum on the determination of MTR held in Lagos, partner at KPMG, Wole Adenekan, explained that the review had become necessary due to significant economic and technological changes that have transformed the telecommunications industry since the current framework was introduced in 2018.
According to Adenekan, several factors have dramatically altered the cost structure of telecom operators over the years. These include the depreciation of the naira, persistent inflationary pressures, rising energy costs, and increased expenditure on network equipment and infrastructure maintenance.
He noted that the telecommunications sector has been operating in a challenging economic climate, making it increasingly important for regulatory frameworks to align with prevailing market conditions.
“A mis-set MTR can enable dominant operators to foreclose smaller competitors through high termination barriers. A cost-reflective rate supports a level competitive playing field,” Adenekan said.
He further emphasized that maintaining artificially low termination rates could discourage investments in telecommunications infrastructure, while a pricing framework that accurately reflects operating costs would improve efficiency, foster healthy competition, and contribute positively to economic growth.
Despite the potential benefits for operators and investors, Adenekan cautioned that any increase in termination rates could eventually be passed on to consumers through higher retail charges. Such an outcome could result in increased costs for voice calls and text messaging services, affecting millions of telecom subscribers nationwide.
The KPMG partner also highlighted the rapid transformation taking place within the telecommunications landscape, pointing to the rollout of 5G technology, the growing adoption of Artificial Intelligence (AI) and Internet of Things (IoT) solutions, and the rising competition from Over-the-Top (OTT) platforms that provide internet-based calling and messaging services.
According to him, these developments have fundamentally changed how telecommunications services are delivered and consumed, making it necessary to update the current interconnection framework to keep pace with industry realities.
Also speaking at the forum, the NCC’s Head of Competition and Tariff Unit, Omotayo Mohammed, described the exercise as a critical regulatory intervention aimed at ensuring that telecom pricing structures accurately reflect present-day market conditions.
She stated that the commission’s review would extend beyond interconnection rates to include an assessment of retail price controls and asymmetry arrangements. The objective, she explained, is to strike a delicate balance between protecting consumers from excessive charges and ensuring the long-term sustainability of the telecommunications industry.
Industry analysts believe the outcome of the review could have far-reaching implications for telecom operators, investors, and subscribers alike. The sector is currently facing rising operational costs while simultaneously experiencing increasing demand for digital and communication services across the country.
Although the NCC has not announced any new tariffs or rate adjustments, stakeholders expect the review process and subsequent consultations to play a significant role in determining the future pricing structure for voice calls and SMS services in Nigeria.
For now, subscribers, industry players, and investors are expected to closely monitor the commission’s next steps as consultations continue and the telecommunications sector awaits the final outcome of the review.
