NCC to review Interconnection Rates

Prof. Umar Danbatta, who is currently the Executive Vice
Chairman of Nigeria Communication Commission NCC, said the commission will soon
review the interconnection charges for voice services which has been on ground
since 2013.
Danbatta who was represented by the Director of Policy
Competition and Economic Analysis, Mrs. Josephine Amuwa, said this on Wednesday,
February 15, 2017 in Abuja at a “Stakeholder’s
Forum on Cost Based Study’’
for the purpose of mobile voice termination
rate. According to him, the reason is based on the current market dispensation.

He said that the commission had carried out a thorough cost
study and have determined to review the current interconnection rates for voice
services which had been on the rail since April 1, 2013.
According to him, since the last determination, the
country’s communication market has seen incredible growth in both subscriber
numbers and traffic volumes.

“The sector has
witnessed changes in available technologies and other network elements,
including global financial markets which have an impact over inputs such as
cost of capital.

“The scale of changes
will inevitably affect the unit cost of providing services, including
interconnection and may lead to differences between regulated interconnection
rates and underlying costs.

“This in turn may
result in differences between on-net and off net retail tariffs.

“It is very important
we ensure that interconnection services are not only fairly priced and
non-discriminative, but should reflect the cost providing such services in the
He also, “It is in
this regard that the commission has decided to review the rates set in its 2013
determination in the light of current market realities.”
According to him, the study delivers the chance to meticulously
examine the emergence of grey market activities in the telecoms industry in

“Such as call
refilling, call masking, and sim-box fraud as a result of the introduction of
an interim International Termination Rate for Inbound International traffic.’’

To this end, the
commission carried out a thorough selection process and appointed Messrs’ Price
ewaterhouseCoopers LLP (PWC) to among other things “carry out an impact
assessment on the subsisting interconnect regime.

“Identify shortfalls
on the subsisting interconnection rate regime and provide workable solutions.

“Determine if there is
need to have different termination rate for National/Domestic and international

“Determine the Mobile
Termination Rate for voice services using appropriate cost modeling techniques
for New Entrant(s)/Small Operators and Existing /Big Operators.

“Determine the
appropriate basis for Glide Path (if necessary); Develop a suitable definition
of a New Entrant (s) /Small Operator to enjoy the benefits of asymmetric
Danbatta said that with respects to the commission’s
principle of guaranteeing participatory regulation, the stakeholders’ forum was
only to formally introduce the project consultant to the industry stakeholders,
but also to start the project.
“You will agree with me that the supply of industry
statistical data is most critical to the success of determining appropriate
interconnection termination rates for the telecommunication industry.

“Therefore, your prompt response in providing accurate date
will be invaluable.

“The commission has an obligation to create a level playing
field for all operators, and in line with international standard practice, NCC
shall ensure that interconnect rates reflect the cost of 
termination on the
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