The Nigerian Communications Commission (NCC) says it has increased the international termination rate (ITR) to $0.10 from the current $0.045 for voice services.
ITR is the rate paid to local operators by international
operators to terminate calls in Nigeria.
The rate is different from the mobile termination rate
(MTR), which is the rate local operators pay to another local operator to
terminate calls within the country.
Last year, NCC changed the rate from local currency to
dollar to accommodate concerns from industry players over forex discrepancies.
In a statement on Tuesday, Umar Danbatta, executive
vice-chairman, NCC, said the new rate would take effect from September 1, 2022.
“We resolved that the commission should further engage with
the IDAs and the MNOs to further understand their respective concerns as a
basis towards a fair and amicable resolution of the challenges,” the statement
quoted Danbatta as saying.
“We had several meetings with IDAs and MNOs, specifically on
April 6 and June 21, 2022.
“While the determination had set a floor price of $0.045 and
gave the MNOs room to negotiate on commercial terms with carriers, there were
related indications that MNOs took advantage of this latitude to engage
partners to the detriment of the Nigerian transit/IDA operators.
“To check the incidence of such anti-competitive
disposition, it was agreed by all parties at the meetings that a fixed rate
should be adopted by the Commission, in place of the floor rate, which had
provided a platform for negotiations with various carriers at a rate above the
floor. It was further agreed that the present determination should be amended
to include this new fixed rate.
“The position was further underscored by the fact that the
floor price of $0.045, while being the lowest rate in Africa, does not support
predictability and monitoring, with a little positive impact on a healthy
national balance of payment position,”
The statement added that the committee considered the impact
created by the present tax regime on the relative price offerings between the
MNOs, other international carriers and the IDAs.
It revealed that while invoices issued to IDAs include a
value-added tax (VAT) rate of 7.5 percent, other international carriers will
enjoy a relative price advantage over the IDAs.
“It was the consensus of all that taxes and other costs
borne exclusively by the IDAs be taken into consideration in arriving at the
rate of terminating international in-bound traffic by them,” the statement
added.
“The pricing asymmetry on the ITR will allow local IDA
players to accommodate taxes and other related costs in a way that guarantees
their competitiveness within the international carrier market and aligns with
the subsisting principle and policy on local content.”
NCC further said it would adopt the same method as contained
in the subsisting MTR Determination of 2018.
It added that big operators would terminate at N4.70 in the
networks of small operators, while small operators should terminate at N3.90 in
the networks of big operators, thereby allowing a 21 percent discount to be
enjoyed by the IDA operators on all inbound international traffic terminations.
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