Telecom tariffs may drop by 50 per cent

NCC unveils new interconnect rates

TARIFFS paid by telecommunications subscribers in Nigeria may go down by about 50 per cent from January 1, next year.

This is as a result of new interconnect rates released by the Nigerian Communications Commission (NCC) yesterday in Abuja. They take effect from December 31, 2009.

The earlier rates issued by the commission in September 2006, stood at N11.55 across board. On the basis of this, operators charged about N30 per minute.

But with the new rates pegged at N8.20, especially for matured operators whose networks have grown and expanded to many areas, subscribers on these networks are likely to pay about N15 per minute.

NCC’s Head, Media Public Relations, Mr. Reuben Muoka, confirmed the development last night saying: “The latest determination applied the Asymmetric Interconnect rate method whereby, new mobile operators enjoy higher termination rates than the older operators as a result of the study that showed that such operators expend higher cost of termination in their networks.”

Muoka said unlike in the past where interconnect rates for fixed and mobile networks were different, the new rates are uniform across board because of the unified access licences that were unfolded in 2007. Many operators now offer mobiles irrespective of the technology – Global System of Mobile communications (GSM) or Code Division Multiple Access (CDMA).

With this development, call terminations on new entrants’ networks are graduated from N10.12 from December 31, 2009 to N8.20 in 2012 while call terminations on older operator’s networks is fixed at N8.20 over the same period.

Another major feature of the new rates is the determination of Interconnect Rates for Short Messaging Services (SMS), for the first time in the country.

The SMS interconnection rates also featured a glide path whereby the new entrants enjoy interconnection rates starting from N1.94 from December 31, 2009 to N1.02 in 2012. The other (older) mobile operators will stay on a fixed N1.02 bar over the same period.

Details of the new rates signed by the Chief Executive Officer of the Commission, Ernest Ndukwe, are as follows:

• The interconnection rate for mobile (voice) termination provided by new entrants in Nigeria irrespective of the originating network shall be:

• N10.12 from December 31, 2009;

• N9.48 from December 31, 2010;
• N8.84 from December 31, 2011; and

• N8.20 from December 31, 2012.

• The interconnection rate for mobile (voice) termination provided by other operators in Nigeria irrespective of the originating network shall be:

• N8.20 from December 31, 2009.

• The interconnection rate for fixed (voice) termination in Nigeria irrespective of the originating network shall be:

• N10.12 from December 31, 2009;

• N9.48 from December 31,2010;

• N8.84 from December 31, 2011; and

• N8.20 from December 31, 2012.

• The interconnection rate for SMS termination provided by new entrants in Nigeria irrespective of the originating network shall be:

• N1.94 from December 31, 2009;

• N1.63 from December 31, 2010;

• N1.32 from December 31, 2011; and

• N.1.02 from December 31, 2012.

• The interconnection rate for SMS termination provided by other operators in Nigeria irrespective of the originating network shall be:

• N1.02 from December 31, 2009.

The NCC also prescribed two conditions for qualifying an operator as a new entrant namely:

• The termination service is provided under a licence that was allocated after 01/01/06 and is less than four years old; and

• The provider (or a company bought by the provider) of this termination service did not provide this service in Nigeria before January 1, 2006 (under a different licence).

The document, which is available on the Commission’s website listed the mobile service providers regarded as the new entrants, and stated that in the event that other new operators are licensed and offer mobile (voice and SMS) termination services, they will be assessed by the Commission using the two test criteria described for eligibility to join the glide-path for mobile voice and SMS termination as set out for the new entrants.

The new rates are expected to impact positively on the retail tariffs, which the operators will offer customers as they are below the prevailing interconnection rates in the market.