Nigerian telecom regulator, the Nigerian Communications Commission (NCC), will set new interconnect rates by March 2018.
The information was disclosed by NCC executive, Mr Sunday Dare, recently. Mr Dare disclosed this when he presented findings by PriceWater Coopers (PwC) on cost based study. The study is the basis for the determination of Mobile Voice Termination Rates.
The outcome of the study is expected to provide a new interconnect rate for voice calls in the telecoms sectors. Mr Dare opined that the new interconnect rates are crucial to the country’s telecom growth and important to commercial relations between network operators. Call masking is one critical concern the new interconnect rates would address.
What Are Interconnect Rates?
Interconnect rates are the fees operators charge when they connect and terminate calls on their networks. In other words, this is the amount that operator ‘A’ pays to operator ‘B’ when voice calls generated from operator ‘A’ are terminated by operator ‘B’.
Currently, the industry’s standard interconnect fee is N24.40k per minute for international calls. And for local calls it is N4.30k per minute.
Some operators however were worried about the rates. They complained that it forced them to accumulate huge debts from unsettled voice termination. Mr Dare noted that by 2015, telcos had incurred up to N30 billion debts as a result.
This had forced some telcos to allegedly resort to call masking techniques to reduce call charges. Call masking occurs when an international calling number is cloaked as a local number. This technique helps to reduce call charges greatly since the operator gets to pay N4.30k, instead of the international rate of N24.40k. A few weeks ago, six telcos had their licences suspended over this allegation.
Mr Dare said the NCC was aware of these issues and will thus review the rates by March 1, 2018. He emphasised that there has been reviews of interconnect cost regimes. These were in 2003, 2006, 2009 and 2013. The 2013 regime expired in 2016, and thus a new regime was needed.
Why Should I Care?
As a customer, the decision to review interconnect rates affects you somewhat. It can have an impact on your call charges significantly.
The present interconnect charge for local calls is N4.30k. But telcos would like that rate to go up. And if that rate goes up, your call charges may go up too. However, calls to the same network may not be affected.
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