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Saturday, June 12, 2021

Danbatta harps on imperative of mobile termination rate - ITREALMS


The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, has harpped on the imperative of the recently concluded mobile International Termination Rate (ITR), reports ITREALMS.
Speaking at a the final Stakeholders’ Forum for the presentation of the study on cost-based pricing of mobile ITR, facilitated by Messrs Payday Advance and Support Services Limited, Danbatta said it became imperative, following previous efforts at finding an optimum price for the termination of international voice services that will be beneficial to all relevant industry stakeholders.

According to Danbatta, “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.”

He also recollected that in MTR determination in the Nigeria’s telecom industry, commenced with in 2013, when NCC issued a determination stating that mobile Termination Rates (MTR) which were the same irrespective of where the call originated.

The EVC told participants at the forum held NCC headquarters that this was misconstrued by operators at that time to mean that ITR should be the same rate as the MTR, consequently ignoring the international cost portion.

“Arising from these is the persistent fact that Nigeria’s ITR is below that of most countries with which it makes and receives the most calls, making Nigerian operators perpetual net payers. 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 explained.

He maintained that regulating the ITR is imperative for developing countries, such as Nigeria, with volatile currencies in order to prevent or mitigate the imbalance of payments with international operators. 

Further, he said the Commission was faced with the challenge of arriving at a rate that will balance the competing objectives of economic efficiency while, at the same time, allowing operators the latitude to generate reasonable revenues.

“Where ITR is not regulated, it tends to converge to the MTR and for a market like Nigeria with major supply side challenges, the socio-economic implications and attendant backlash can only be imagined," he elucidated.

ITREALMS recalled that the forum was held with Management Staff of the Commission physically in attendance while other critical industry stakeholders participated virtually.

Nenye Dom/Editor

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