New Interconnect Rates for Telecoms Operators Coming

• New Interconnect Rates for Telecoms Operators Coming

There are indications that mobile and fixed telecommunications operators will soon get new interconnect rates.

Interconnect rate is the price that telecommunications operators pay each other for calls terminating on their networks.

If a call originates from MTN Nigeria Communications Limited, for instance, and ends on Glo Mobile network, what MTN pays Glo Mobile for terminating the call is the interconnect rate.

Interconnect rate is important in the telecommunications industry because it is one of the factors that determines what an operator charges the subscriber and it cannot charge less than the interconnect rate no matter how cost-efficient the operator is.

The Nigerian Communications Commission had commissioned PricewaterhouseCoopers to conduct a study on cost-based interconnect rates both in the country and across the world.

It was gathered from authoritative sources on Wednesday that the study had been concluded and therefore a new rate based on the study would soon be implemented in the country.

The NCC confirmed that it would host a forum in Lagos today (Thursday) where the cost-based study would be unveiled to stakeholders. It was also gathered that the forum would precede the announcement of the new rates that would be applied across the industry.

According to the NCC, the forum will avail stakeholders the opportunity to examine the findings of the PwC and discuss issues of concern to all parties.

The commission had in 2009 issued new interconnect rates that for the first time allowed new operators to pay lesser for terminating calls on older networks.

The new rates, which came into effect on December 31, 2009, also allowed graduated termination rates for new operators until all operators paid similar rates.

It also issued a termination rate for text messages, otherwise known as Short Message Service. It was after the new interconnect rate for SMS that the regulator set a ceiling of N4 for text messages.

The 2009 rates, which replaced the earlier rates issued by the NCC in September 2006, presented many features that represented improvement in the earlier interconnect rate determination by the commission.

The rates applied the asymmetric interconnect rate method whereby new mobile operators enjoyed higher termination rates than the older operators as a result of the study that showed that such operators expended higher cost of termination in their networks.