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GSM tariff: NCC begins review of call rates –Danbatta

The Nigerian Communications Commission (NCC) has started the process of reviewing mobile voice termination rates for telecommunication industries in the country.

NCC Executive Vice Chairman, Professor Umar Garba Danbatta disclosed this at a stakeholders’ forum on the Cost Based Study for the determination of mobile voice termination rate for the telecom industry, yesterday.

He said the review became necessary due to changes in the industry since the last exercise in 2013.

He told industrial players and other stakeholders, who attended the forum at the Commission’s head office in Abuja, that the move would make the industry achieve full competition and effective regulation by providing a level playing ground for all participants.

“Since the last determination, the Nigerian communication market has witnessed tremendous growth in both subscriber numbers as well as traffic volumes.  He said the changes are available in technologies (2G, 2.5G, 3G and 4G) and other network elements, including global financial markets which have an impact such as the cost of capital.

“The scale of changes will inevitably affect the unit cost of providing services, including interconnection and may lead to differences between regulated interconnection rates and underlying costs which, in turn, may result in differences between on-net and off-net retail tariffs.

“It’s very important we ensure that interconnection services are not only fairly priced and non-discriminative, but should reflect the cost of providing such services in the market. It is in this regard that the Commission has decided to review the rates set in 2013, in the light of the current market realities,” said Danbatta.

He said the Commission has engaged Messrs Pricewaterhouse Coopers LLP (Pwc) to, among other things, carry out an impact assessment on the subsisting interconnect regime; identify shortfalls on the subsisting interconnection rate regime and provide workable solutions.

Others are to determine if there is need to have different termination rate for national/domestic and international traffic; determine the mobile termination rate for voice services, using appropriate cost modelling techniques for new entrant(s)/small operators and existing/big operators. Pricewaterhouse is also expected to determine the appropriate basis for glide path if necessary; develop a suitable definition of a new entrant(s)/small operator to enjoy the benefits of asymmetric rates; determine the cost per minute session for the use of unstructured supplementary service data.

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