The Nigerian Communication Commission (NCC) commenced a cost-based study to launch a new price policy on International Termination Rate (ITR) on mobile for inbound international voice calls. The International Termination Rate is the foreign operators’ fee to the local operators to terminate calls received in Nigeria.
The NCC organized a virtual conference, inviting all the stakeholders in the telecommunications industry to discuss the ongoing cost-based study highlighting the need to cooperate with the consultant engaged with the research to determine the new price for the call rate. Messrs Payday Advance and Support Services Limited is the consulting firm in charge of ongoing research.
During the conference held in Abuja, the NCC Executive Vice Chairman, Prof. Umar Danbatta who was represented by the NCC Executive commissioner, Adeleke Adewolu, said that the objectives of the new price policy on International Termination Rate is to to balance the relations between competing stakeholders in the industry, to stabilize economic efficiency, and also to permit operators the means to generate more revenue.
With further explanation, the NCC Executive Vice Chairman, Prof. Umar Danbatta, said that as of 2013, the NCC made sure that the rates on Mobile Termination Rate (MTR) were the same regardless of the location where the call initiated. As of 2013, the concept was miscalculated by operators implying that the rate on International Termination Rate (ITR) should tally with the Mobile Termination Rate. Operators began to ignore the international cost allocation, where the International Termination Rates (ITR) was set at the same level as the Mobile Termination Rate (MTR) without a positive surplus to cover up the international log cost for local operators.
Danbatta also said that the International Termination Rate (ITR) revenues have continuously declined simultaneously with the Mobile Termination Rate (MTR) because the International Termination Rate has been grossly affected following the devaluation of the Naira. It was not profitable because the Nigerian operators paid the international operators in dollars to transmit international calls, which resulted in inequality in payment as the International Termination Rate relapsed in Nigeria. The Nigerian operators consistently experienced negative profitability and commercial results; this placed the value of Nigerian International Termination Rate below other countries, while Nigeria receives and makes most of the calls.
Based on the need of buoyant currency value to help regulate the International Termination Rate (ITR) to prevent the imbalance of payment with other international operators, the Nigerian foreign reserve will continue to be under pressure in terms of continuous decrease of net transfers to foreign operators. According to Danbatta, “where ITR is not properly regulated, it tends to have a negative effect on a market like Nigeria with major supply-side challenges and associated socio-economic implications.”
However, placing the rate above the Mobile Termination Rate (MTR) has led to unfavorable outcomes such as the consumer shift to the use of online platforms for call based on the use of Internet Protocol (IP) technologies such as WhatsApp or Skype to avoid high international call rates. The NCC aims to provide the International Termination Rate (ITR) policy that is economically efficient to increase economic benefits amongst stakeholders.
Paul Balo is the founder of TechBooky and a highly skilled wireless communications professional with a strong background in cloud computing, offering extensive experience in designing, implementing, and managing wireless communication systems.
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