Nigerians to Pay Less for Phone Calls as NCC Slashes Interconnect Rates

Nigerian Communications Commission (NCC) has released a new set of interconnection rates for voice services for the country’s telecommunications industry which when in force will see telecom subscribers paying less for telephone calls.

Interconnection rate represents what operators charge themselves for allowing calls to be terminated on another’s networks and it is considered as very critical to the proper functioning of a competitive telecoms market.

NCC in a statement yesterday said that the termination rates for voice services provided by new entrants and small operators in Nigeria irrespective of the originating network shall be N6.40 from April 1, 2013; N5.20 from April 1, 2014; and N3.90 from April 1, 2015.

The termination rates for voice services provided by other operators irrespective of the originating network shall be N4.90 from April 1, 2013; N4.40 from April 1, 2014; and N3.90 from April 1, 2015.

The current rate, which is symmetric to all operators, is N8.2.

The new rate will replace that of December 31, 2009, which pegged interconnection rate for mobile voice termination at N10.12 for telecoms companies that had operated for less than four years in the country.

The commission had planned that the rates would be reduced on a yearly basis to N9.48 on December 31, 2010, N8.84 on December 31, 2011 and N8.20 on December 31, 2012.

In the current rate , telecoms operators not considered as new entrants, having operated for more than four years in the country as at December 31, 2009, were required to pay N8.20 as mobile voice termination rate.

But the new regime has factored new entrants and small operators in with a tariff drop of 21.95 per cent from April 1 this year, while for other operators, the drop will be by 40.2 per cent.

“This determination shall take effect from April 1, 2013, and remain valid and binding on licensees for the next three years until further reviewed by the commission,” the NCC maintained.

According to the NCC, a new entrant is a newly licensed operator entering an existing or new market within zero and three years, while a small operator, for the purpose of the determination, is an existing operator with a market share of zero to 7.5 per cent in terms of subscriber base.

SOURCE: Nigeria Communications Week