NCC To Restructure International Termination Rate

The Nigerian Communications Commission intends to restructure and roll out a new international termination rate.

The commission made this known in a statement on Thursday after it said it had finalised the process for determining the cost-based price of Mobile International Termination Rate.

This move would ensure healthy competition on traffic handling for voice services between local and international operators in Nigeria.

Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, noted that the cost-based study became imperative, as there was a need to find the optimum price for the termination of international voice services that will be beneficial to all relevant industry stakeholders.

Danbatta said, “overriding need for regulatory options and intervention in relation to the international termination rate in the voice market segment is predicated on some intractable challenges, most common with economies with severe macroeconomic volatility such as ours.”

ITR is the rate paid to local operators by international operators to terminate calls in Nigeria as contrasted with MTR, which is the rate local operators pay to another local operator to terminate calls within the country.

He further explained how Nigeria’s ITR’s rate was below that of most countries with which it made and received calls. And this made Nigerian operators perpetual net players.

“The obvious implication of this is seen in the attendant undue pressure on the nation’s foreign reserves, which continue to get depleted by associated net transfers to foreign operators on account of this lopsidedness,” Danbatta added.

The vice-chairman further stated that regulating the ITR was imperative for developing countries, such as Nigeria, with volatile currencies in order to prevent or mitigate the imbalance of payments with international operators.

In 2013, the NCC issued a Determination stating that mobile Termination Rates (MTR) are the same irrespective of where the call originated. Although, operators at that time thought it meant that ITR should be the same rate as the MTR, consequently ignoring the international cost portion.

The Director, Policy, Competition and Economic Analysis, NCC, Yetunde Akinloye, noted that the process was intended to complement and consolidate the initial work done by the Commission which had also culminated in an MTR Determination published in June 2018.