NCC CEO/Executive Vice Chairman Prof Umar Danbatta

By Kokumo Goodie, Lagos, Nigeria

Telecoms sector regulator the Nigerian Communications Commission (NCC) has hired PricewaterhouseCoopers (PwC) to carry out an impact assessment on the subsisting interconnect regime; identify shortfalls on the subsisting interconnection rate regime and provide workable solutions.

NCC said this marked the beginning of the process that would culminate in the review of mobile voice termination rates in the country.

NCC CEO/Executive Vice Chairman Prof Umar Danbatta, who gave indication to this at the Stakeholders’ Forum on the Cost Based Study for the Determination of Mobile Voice Termination Rate for Telecom Industry, said the review had become necessary in view of the changes in the sector since the 2013 review.

“Since the last determination, the Nigerian Communication Market has witnessed tremendous growth in both subscriber numbers as well as traffic volumes. Changes in available technologies--2G, 2.5G, 3G and 4G and other network elements, including global financial markets which have an impact such as the 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 which in turn may result in differences between on-net and off-net retail tariffs.

“It is very important that we ensure that interconnection services are not only fairly priced and non-discriminative but should reflect the cost of providing such services in the market.

“It is in this regard that the Commission has decided to review the rates set in 2013 Determination in the light of the current market realities,” he said while addressing telcos and other stakeholders at the Commission’s Headquarter in Abuja.

PwC will also determine if there is need to have different termination rate for national/domestic and international traffic; determine the mobile termination rate for voice services using appropriate cost modelling techniques for new entrant(s)/ small operators and existing/big operators.

And also to 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 rates; determine the cost per minute session for the use of unstructured supplementary service data.

Danbatta further added that the job of the accounting firm would include to review ITR in other jurisdiction with similar socio-economic environment with Nigeria and its implication for the determination of ITR in Nigeria.

And to determine if necessary the inbound international termination rate taking into consideration relevant socio-economic and technical factors using appropriate cost modelling techniques and develop measures to reduce or eliminate grey markets in the telecommunications industry in Nigeria.

According to the chief regulator, the move is in line with the Commission’s principle of participatory regulation, adding that the forum was convened to introduce the consultant to the industry stakeholders.

 “The supply of industry statistical data is most crucial to the success of determining appropriate interconnection termination rates for the telecommunications industry,” he told the carriers, adding that it is the duty of the NCC to create a level playing field for all operators.

“In line with international best practices, the Commission shall ensure that interconnect rates reflect the cost of termination on the networks.

“The study provides the opportunity to thoroughly examine the emergence of grey market activities in the telecommunication industry in Nigeria such as call refilling, call masking and sim-box fraud as a result of the introduction of an interim International Termination Rate (ITR) for inbound international traffic,” Danbatta said.

 

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