The Nigerian Communications Commission (NCC) has begun a review of interconnection rates for telecom operators, a move that could lead to higher call and SMS charges for subscribers nationwide.
The review marks the first major overhaul of the Mobile Termination Rate (MTR) in eight years. The MTR determines how much one network pays another when a call from its subscriber ends on a rival network. The current rate ranges from ₦3.90 to ₦4.70 per minute.
Industry players warn that any upward adjustment could eventually push up costs for consumers, though the NCC maintains that the goal is to keep tariffs fair and aligned with current market realities.
The Commission announced the review at a stakeholders’ forum on Mobile Termination Rates held in Lagos on Tuesday.
Why Rates Need Reviewing — KPMG
Speaking at the event, KPMG partner Wole Adenekan said the review was overdue given the sweeping economic and technological shifts in telecoms since the rates were last set in 2018.
Naija News reports that KPMG is one of the world’s “Big Four” accounting and advisory firms.
Adenekan pointed to naira depreciation, inflation, rising energy costs, and pricier telecom equipment as factors that have reshaped operators’ cost structures. He cautioned that rates set too low could discourage investment in network infrastructure.
“Rates that are too low would fail to signal the true cost of providing termination services and can deter infrastructure investment,” he said, adding that cost-based rates support efficient investment and broader economic growth.
He also warned that poorly calibrated rates could let dominant operators squeeze out smaller rivals. “A mis-set MTR can enable dominant operators to foreclose smaller competitors through high termination barriers. A cost-reflective rate supports a level competitive playing field,” he said.
Consumers Could Foot the Bill
Adenekan cautioned that while balance is key, excessively high termination charges could ultimately be passed on to consumers through higher retail prices.
He noted that the rollout of 5G, the rise of AI and Internet of Things technologies, and shifting usage patterns have made the 2018 framework increasingly out of step with current realities.
“5G rollout and AI/IoT adoption are reshaping network usage patterns, cost structures and service delivery models, making legacy interconnection frameworks less representative of current realities,” he said.
He added that competition from Over-the-Top (OTT) platforms offering internet-based calls and messaging has chipped away at telecom operators’ traditional wholesale revenue. While the NCC adjusted International Termination Rates in 2022, he noted, the domestic MTR framework from 2018 has remained untouched.
NCC Vows to Protect Consumers
In her welcome address, the NCC’s Head of Competition and Tariff Unit, Omotayo Mohammed, described the review as a major regulatory step to align the Commission’s rules with fast-moving changes in the industry.
She said the exercise would go beyond interconnection rates to also examine retail price controls and asymmetry arrangements, with consumer protection as a priority.
Mohammed explained that the current framework dates back to the Commission’s Interconnection Rate Determination of June 1, 2018, later adjusted through a 2022 amendment to the Mobile International Termination Rate.
She noted that while the NCC typically reviews its frameworks periodically, the pace of change since 2018 has been unusually rapid. “The Nigerian telecommunications market has undergone considerable transformation, reflected in swift expansion, shifting market dynamics, the commercial deployment of advanced technologies such as 5G, and the emergence of new ecosystem players including Mobile Virtual Network Operators,” she said.
Naira, Inflation Driving Up Costs — NCC
Mohammed also linked the review to broader economic pressures, saying shifts in exchange rates and inflation have significantly raised the cost of delivering telecom services in Nigeria.
“Changes in exchange rate regimes, and inflation rates have substantially altered the cost structures associated with providing communications services in Nigeria,” she said, stressing that regulation must keep pace with a fast-changing market.
She cited Section 108 of the Nigerian Communications Act 2003 as the legal basis for the Commission’s mandate to ensure tariffs remain “reasonable, cost-reflective, and non-discriminatory.”
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