The Nigerian Communications Commission (NCC) set March 1, 2018 for effective take off of a new interconnect rate for the telecoms industry Interconnect rate is the fee an operator (carrier) charges another for connecting and terminating a call on its network.
Its Executive Vice Chairman, Prof Garba Umar Dmabatta, who spoke during a stakeholders’ forum on cost based study for the determination of mobile voice termination rate, at the Digital Bridge Institute (DBI), Cappa, Oshodi, Lagos, said interconnection is critical to the growth and development of the telecoms industry, adding that without it, it would be difficult, if not impossible, for subscribers on one network to call subscribers of other networks.
Represented on the occasion by the Executive Commissioner, Stakeholder Management, Mr. Sunday Dare, the chief telecoms sector regulator said a key component of the commercial aspects of interconnection is the determination of interconnection rate amongst network service providers.
“Apart from the first interconnection rate which was based on negotiation between the incumbent operator (NITEL) and other operators, all other determinations have been handled by the commission due largely to two reasons, firstly, 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 have been four determination regimes (2003-2006 2009 and 2013 respectively).
“The 2003 regime was determined via a benchmarking exercise, while the 2006, 2009 and 2013 regime were cost based and a glide path asymmetric regime was adopted in 2009 and 2013 respectively, while the 2013 regime was expected to expire in 2016,” he said.
According to Prof Dambatta, 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 kobo per minute for inbound international traffic after carrying out a bench-marking exercise with other jurisdictions and this rate will subsist until a cost-oriented rate is determined by the commission.
“Further to the above and the expiration of the 2013 interconnect region in 2016, the commission engaged the services of Price water house Cooper (PwC), UK to review and update the existing model taking into account the changes that have occurred over time and produce an interconnection call model that is more in line with the current realities in Nigeria. This project formerly kicked off with the initial stakeholders’ forum held Wednesday February 15, 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 order 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 re-validation during the course of the study.
“Having concluded the study, the consultants will be presenting their findings at this very important meeting and consistent with the Commissions principle of ensuring participatory regulations, the floor will be opened for an intensive review and discussion of the findings for the study. The outcome of the deliberations today will culminate in the final determination of the mobile termination rate for the industry,” he said.
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