‘New Interconnect Rate Will Address Industry Issues’

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Emma Okonji

Information and Communications Technology (ICT) industry stakeholders have thrown their weight behind for the cost-based study on the determination of mobile voice termination rate embarked upon by the Nigerian Communications Commission (NCC).

The outcome of the study is expected to usher in a new interconnect rate for voice calls in the telecoms sector, which is being planned to take effect from March 1.

Pleased with NCC’s move, industry stakeholders are of the view that the new interconnect rate will address a whole lot of issues bedeviling the telecoms industry in recent times, especially issues with call masking and poor service quality experienced by telecoms subscribers.

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, told THISDAY in Lagos that the implementation of a new interconnect mobile voice rate, would certainly address several industry issues that have been unattended to in recent times.

In technical parlance, interconnect rate is the amount of money that operator ‘A’ pays to operator ‘B’ when voice calls generated from the network of operator ‘A’, are terminated on the network of operator ‘B’.

Before now, the industry was operating at N24.40k per minute for international call termination rate and N4.30k per minute for local call termination rate, but some of the telecoms operators were not comfortable with the rates, and have complained that they were incurring huge debts from unsettled voice termination calls, a situation that has impacted negatively on voice call quality.

Some of the operators also said the unfavourable old rate forced some industry players to mask calls by routing international calls and terminating such calls as local calls on the networks of local operators, in order to pay local termination rate, instead of international termination rate, which is higher in cost.

Addressing telecoms operators at the second stakeholders’ forum on the cost-based study for the determination of mobile voice termination rate, organised by NCC in Lagos last week, the Director, Policy Competition and Economic Analysis at NCC, Ms. Josephine Amuwa, told stakeholders that essence of the forum was to present the report of the study for deliberations, review and amendments, before the implementation stage. She said NCC as a regulator, needed the right data that would produce the right result, hence it embarked on the study.

The Executive Commissioner, Stakeholders Management at NCC, Mr. Sunday Dare, who represented the Executive Vice Chairman (EVC) of NCC, Prof. Umar Garba Danbatta at the forum, said he expected quality contributions from the stakeholders that would shape industry perspective.

According to the EVC’s speech that was read by Dare, as at 2015, the mobile network operators were seriously embroiled in a N30 billion interconnect debts, with MTN claiming to be owed the highest, which was around N13 billion.

Danbatta noted that interconnection is critical to the growth and development of the sector, and stressed that without it, it would be difficult, if not impossible, for subscribers on one network to call subscribers of other networks.

The EVC noted that a key component of the commercial aspects of interconnection is the determination of interconnection rate among network service providers.
He revealed that till date, there have been four interconnect cost determination regimes (2003, 2006 2009 and 2013 respectively).

Danbatta disclosed that the 2013 regime expired in 2016, and the Commission had to engage the services of the consultant, PricewaterhouseCoopers (PwC) UK to review and update the existing model, taking into account the changes that have occurred over time and produce an interconnection cause model that is more in line with the current realities in Nigeria.

Danbatta said that “the Commission has an obligation to create a level playing field for all operators and ensure the continuous growth of the industry.”