The Nigerian Communications Commission (NCC) has commenced a review of interconnection rates for telecommunications operators, a move that could ultimately affect the cost of voice calls and SMS services for millions of subscribers across the country.
Interconnection rates, also known as Mobile Termination Rates (MTR), are the charges telecom operators pay one another when calls originate from one network and terminate on another. The current rates, which have remained largely unchanged since 2018, stand at between N3.90 and N4.70 per minute.
Industry stakeholders say any upward adjustment to these wholesale charges could eventually be reflected in higher retail prices for consumers.
Speaking at a stakeholders’ consultation on the proposed review in Lagos, KPMG partner Wole Adenekan said interconnection rates play a critical role in maintaining connectivity across networks and ensuring fair competition within the telecommunications sector.
According to him, rates that do not accurately reflect the cost of service delivery can discourage investment in network infrastructure and weaken incentives for operators to expand and improve their services.
Adenekan argued that a properly calibrated rate structure promotes competition, encourages efficient investment and contributes to broader economic growth. He warned that rates set too high could increase costs for consumers, while rates set too low could distort market dynamics and hinder long-term industry development.
He noted that the operating environment for telecom companies has changed significantly since the last review, citing currency depreciation, inflation, rising energy costs and increased spending on network equipment.
The KPMG executive also pointed to technological changes, including the expansion of 5G services and the growing use of artificial intelligence and Internet of Things (IoT) technologies, as factors reshaping network operations and cost structures.
In addition, he highlighted the growing influence of over-the-top platforms, which provide messaging and voice services over the internet and have reduced reliance on traditional telecom services.
Adenekan observed that while the NCC revised international termination rates in 2022, local interconnection rates have not been updated since the 2018 determination.
Speaking at the event, NCC official Omotayo Mohammed said the review is intended to ensure that the commission’s regulatory framework remains relevant in a rapidly evolving telecommunications market.
She explained that the exercise would assess existing pricing arrangements and competition measures while balancing the interests of operators and consumers.
According to Mohammed, the Nigerian telecom industry has experienced major changes over the past eight years, including the rollout of 5G technology, the entry of Mobile Virtual Network Operators (MVNOs), shifting market dynamics and changing economic conditions.
She added that inflation, exchange rate fluctuations and other macroeconomic developments have significantly altered the cost of providing telecommunications services.
The NCC said the review is being conducted under its statutory mandate to ensure that telecom tariffs remain fair, cost-reflective and non-discriminatory while promoting sustainable growth and competition within the sector.
The outcome of the review is expected to shape future pricing structures and influence how telecom operators recover costs in an increasingly competitive market.
