The Nigerian Communications Commission (NCC) is set to commence a cost-based review to determine a new pricing regime for mobile International Termination Rate (ITR) for inbound international voice calls in the country.
Dr Ikechukwu Adinde, Director, Public Affairs, NCC, made this known in a statement on Monday in Abuja.
ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.
Adinde said that as part of the process for the rate determination, the Commission has organised a virtual stakeholders’ engagement forum with relevant industry stakeholders.
He said that the meeting was to intimate them about the ongoing cost-based study and the need to cooperate with Messrs Payday Advance and Support Services Limited, the consultants engaged to carry out the study.
Addressing the stakeholders, NCC Executive Vice Chairman, Prof. Umar Danbatta, said the study had become imperative following the various implementation constraints arising from contending industry and market dynamics that met previous efforts at finding an optimum price for the termination of international voice services in Nigeria.
Danbatta, said through the new ITR pricing, the Commission would be able to balance the competing objectives of economic efficiency and allowing operators the latitude to generate reasonable revenue.
He, however, explained that in 2013, the Commission issued a determination stating that Mobile Termination Rates (MTR) were the same irrespective of where the call originated from, adding that it was largely misconstrued by operators at that time that ITR should be the same rate as the MTR.
He said this led to operators ignoring the international cost portion, where ITRs were agreed at MTR level without a positive residual to cover the costs of the international leg for local operators.
“As a result of this, the ITRs continued to decline, in line with the MTR glide path and as the ITR was set in naira, it suffered a further downward slide in dollar terms following the currency devaluation.
“Ironically, the Nigerian operators paid the international operators in dollars to deliver international calls which created an imbalance of payments as the ITR in Nigeria declined,” he said.
Danbatta said Nigerian operators’ profitability and commercial results were negatively affected putting Nigeria’s ITR below that of most countries with which it made and received the most calls, thereby making Nigerian operators perpetual net payers.
“According to him, this has, therefore, led to undue pressure on the nation’s foreign reserves, which continued to get depleted by associated net transfers to foreign operators on account of this lop-sidedness.
Hence the need for Nigeria, with volatile currency to regulate the ITR to prevent or mitigate the imbalance of payments with international operators.