February 7, 2018

Telecom operators to get new interconnect rate March

Telcos threaten telecom blackout in nine states

Telecom mast

By Prince Osuagwu (Hi-Tech Editor)

Telecom operators in the country are to get a new interconnect rate for termination of calls on each other’s network, by March this year.

Executive Commissioner, Stakeholder management, of the Nigerian Communications Commission, NCC, Mr Sunday Dare made the disclosure recently, in Lagos, at a forum where the Commission presented the findings on the cost based study for the determination of Mobile Voice Termination rates in Nigeria, carried out by PriceWater Coopers, PwC.

*Telecom mast

According Dare, the new interconnect rate is critical to the growth and development of the telecoms industry and a key component of the commercial aspects of interconnection between the network service providers.

He said the commission was working towards ensuring the operators have a new Interconnect rate by March this year.

Dare, who represented the Executive Vice Chairman, Prof Garba Umar Danbatta, also described Interconnect rate as the fee an operator charges anothers for connecting and terminating calls on its network.

Earlier, while presenting the welcome address of the EVC, Dare recalled that a key component of the commercial aspect of interconnection is the determination of interconnection rates amongst network service providers.

He said: “Apart from the first interconnection rate which was based on negotiation between the then incumbent operator (NITEL) and other operators, all other determinations have been handled by the Commission due largely to two reasons: The negotiated interconnection rate was fraught with many controversies. Secondly, and more importantly, there was a need to ensure interconnection rates are cost-oriented in line with international best practice.

Till date there has been four interconnect cost determination regimes; 2003, 2006, 2009 and 2013. The 2003 regime was determined via a benchmarking exercise, while the 2006, 2009 and 2013 regimes were cost based and a glide path asymmetry regime was adopted in 2009 and 2013 respectively with the 2013 regime expected to expire in 2016.

However, economic factors such as the rapid devaluation of the naira in 2016 and the fact that Nigerian network service providers became perpetual net payers to their overseas interconnecting partners, led to the Commission setting an interim rate of N24.40 per minute for inbound international traffic after carrying out a benchmarking exercise with other jurisdictions and this rate will subsist until a cost-oriented rate is determined by the Commission”.

He added that after the expiration of the 2013 interconnect regime in 2016, the Commission re-engaged the services of the Consultant PricewaterhouseCooper (PWC), UK to review and update the existing model taking into account the changes that have occurred over time and produce an interconnection cost model that is more in line with the current realities in Nigeria.

This project formally kicked off with the initial stakeholders forum held Wednesday 15th February, 2017 with the primary aim of introducing the Consultant to the industry; informing operators of the objectives of the study; and seeking their active participation by way of providing the requisite data and other information for the study. This was immediately followed by one on one meeting with operators and subsequent visits to the offices of some operators for data collection and revalidation during the course of study.

Having concluded the study, the consultants will be presenting their findings at this very important meeting and consistent with the commission’s principle of ensuring participatory regulation, the floor will be open for an extensive review and discussions of the findings of the study”.