NCC Commences Review of Voice Termination Cost for Telcos

Dele Ogbodo in Abuja

The Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Danbatta, yesterday said the commission has commenced the process for the review of mobile voice termination cost for all telecommunication companies in the country.

Danbatta, who was represented by Ms. Josephine Amuwa, a Director in the commission, made the disclosure at a stakeholders’ forum in Abuja, he said the commission appointed Messrs’ PricewaterhouseCoopers LLP (PwC) to carry an impact assessment on the subsisting interconnect regime.
According to him, the commission carried out an in depth cost study and made a determination on the interconnection rates for voice services which took effect in 2013.

Danbatta said the result of the cost based stud would make the industry achieve full competition and effective regulation by providing a level playing ground for all participants.

He said: “Since the last determination, the Nigerian communication market has witnessed tremendous growth in both subscriber numbers as well as traffic volumes. Changes in available 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 is very important that 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.”

The EVC admitted that’s is in this regard that NCC has decided to review the rates set in 2013 determination in the light of the current market realities

He said: “ Consistent with the Commission’s principle of ensuring participatory regulation, this initial Stakeholders Forum is held not only to formally introduce the project consultant to the industry stakeholders, but also to kick—start the project.”
The supply of industry statistical data, the EVC, said is most crucial to the success of determining appropriate interconnection termination rates for the telecommunications industry.

According to him, NCC has the obligation to create a level playing field for all operators, noting that “in line with international practices, the commission shall ensure that interconnect rates reflect the cost of termination on the networks.
He said PwC terms of reference includes: “To 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.

“To determine the appropriate basis for glide path if necessary, develop a suitable definition of a new entrant(s) or small operator to enjoy the benefits of asymmetric rates; determine the cost per minute session for the use of unstructured supplementary service data.”