Mobile network operators in Nigeria will begin receiving revenue in US dollars from all international calls from January 1, 2022.
This is one of the primary revisions in the Nigerian Communications Commission’s (NCC) assessment of the International Termination Rate (ITR) (NCC).
The Commission also set a floor price of $0.045 for all ITRs. This means that no operator can charge less for international call termination than that amount.
In contrast to Mobile Termination Fee (MTR), which is the rate local operators pay to another local operator to terminate calls within the country, ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.
The new ITR replaces the previous one, which was set at N24.40k and was received by the operators in naira.
According to NCC, the International Termination Rate being denominated in Naira had a number of negative effects for operators, which were compounded by a succession of Naira devaluations, which eventually turned Nigeria from a net receiver to a net payer of international minutes. PricewaterhouseCoopers (PwC) conducted research on the ITR regime in Nigeria’s telecom sector in 2018 and found that Nigerian operators were underpaid, advising that the NCC come up with a cost-based strategy, among other choices.
To improve the problem, the Commission hired a consultant, Messrs’ Payday Advance and Support Services Limited, to conduct cost-based research on Mobile (Voice) International Termination Rates (ITR) that would be most appropriate for the Nigerian Telecommunications Industry. The consultant’s recommendations were also given to the MNOs at a forum, where they were asked to contribute their own ideas.
“The International Termination Rate for voice services paid by overseas carriers for terminating international calls on local networks in Nigeria shall be 0.045 United States Dollars (USD-US$).
The floor pricing for ITR services is 0.045 US dollars. The ITR will be paid in US dollars, so if the devaluation continues, operators will earn a higher rate in Naira terms. Only the cost of sending traffic into Nigeria is included in the ITR tariff (US$). The regulated MTR will be paid by operators. The minimum that can be charged is 0.045 US$, which is the ITR. Operators.
