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Monday, December 20, 2021

NCC fixes Int'l termination rate @$0.45 - ITRALMS

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The Nigerian Communications Commission (NCC) has fixed the new International Termination Rate (ITR) for voice services originating from overseas telecom carriers for termination in Nigeria at $0.045, about N184.57 (One Hundred and Eighty-Four Naira, Fifty-Seven Kobo Only), reports 
ITREALMS.
A statement released made available to 
ITREALMS by the Director, Public Affairs at NCC, Dr. Ikechukwu Adinde, the new rate is contained in the ‘Determination of Mobile International Termination Rate’ issued by the Commission on November 25, 2021.

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He also said the new rate of $0.045 is the floor price for International Termination Rate services, and effective from January 1, 2022.

The rate is to be paid in US Dollar to enable Nigerian operators to receive an increasing rate in Naira terms to accommodate devaluation.

According to Adinde, no licensee shall charge and/or receive effective rate per minute below determined ITR floor rate. As such, payment discounts, volume discounts and any other concession that has the effect of bringing the effective ITR lower than the rate determined shall be deemed a contravention of the new determination and will attract sanctions in line with the Nigerian Communications (Enforcement process, etc.) Regulations, 2019.

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ITREALMS gathered that the International Termination Rate floor is the minimum that could be charged by a telecom operator, even though they operators may negotiate a rate above the floor and this will be entirely left to commercial negotiation between the operators and international carriers/partners.

Whereas the current ITR only relates to the cost of bringing traffic into Nigeria, therefore, Nigerian operators will continue to pay the regulated Mobile Termination Rate (MTR), the local termination rate among themselves.

ITREALMS recalls that the MTR of N3.90 for generic 2G/3G/4G operators and N4.70 for new entrant Long Term Evolution (LTE) operators determined in 2018, will continue to apply for local call terminations until a new rate is determined by the Commission pursuant to its powers as enshrined in the Nigerian Communications Act (NCA), 2003.

The subsisting regime of interconnection rates was sustained by the Commission’s Mobile (voice) termination rate issued on June 1, 2018.

In the determination, it was stated that the International Termination Rate of N24.40 determined in 2016 will continue to apply until a new determination is made.

The International Termination Rate, being denominated in Naira had multiple negative impacts on local operators which was further exacerbated by episodes of devaluation of naira which ultimately left Nigeria from being a net receiver with respect to international minutes to a net payer.

The Commission also observed that operators continue to face series of challenges occasioned by the denomination of ITR in Naira, necessitating a need for a cost-based study on ITR.

In view of the foregoing and in fulfillment of its statutory mandate of periodic review of regulatory policies, the Commission engaged Messrs’ Payday Advance and Support Services Limited to undertake a cost-based study of voice MTR that is most suitable for the Nigerian telecommunications industry.

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