The Nigerian Communications Commission (NCC) has kick-started the process that will lead to the first review of mobile termination rates in eight years, engaging KPMG to develop a cost-reflective pricing model. The exercise aims to balance operators’ rising costs, driven by inflation and naira depreciation, against fair competition, MVNO integration, and consumer affordability across the sector. ADEYEMI ADEPETUN writes.

The telecommunications industry is bracing for a pivotal shift as regulators prepare to review the mobile termination rate (MTR), the fee operators charge each other to connect calls across networks.

Long seen as a lever for shaping market dynamics, the MTR has direct implications for call tariffs, operator revenues and, ultimately, consumer affordability. The planned review signals a renewed effort to balance the interests of dominant players with those of smaller operators striving to stay competitive.

At the heart of the debate lies the tension between cost recovery and fair competition. Larger operators argued that the MTR must reflect the true cost of maintaining expansive infrastructure, while smaller networks insist that high rates stifle their ability to compete and expand. For consumers, the stakes are clear: the outcome of this review could determine whether call rates become more affordable or remain weighed down by interconnect charges.

Beyond pricing, the review carries broader significance for Nigeria’s digital economy. As mobile connectivity underpins everything from fintech adoption to e-commerce growth, regulators face the challenge of crafting a framework that encourages investment while ensuring inclusivity.

With KPMG saddled with the responsibility of carrying out the task within four months, the review is coming eight years after the last one.

For an industry that is the backbone of a $1 trillion economy ambition, the forum, organised by Dr Aminu Maida-led NCC, was not just a regulatory formality but a critical debate about sustainability, competition and the future cost of connectivity for over 188 million mobile subscribers.

The central point of contention is deceptively simple: a wholesale pricing mechanism that has remained frozen since 2018, despite a complete transformation of Nigeria’s economic and technological landscape. The review, which will span four months, seeks to answer a fundamental question: can an economy as dynamic as Nigeria’s afford to have its telecom interconnection framework frozen in time?

Frozen since 2018
AT the heart of the debate lies the current MTR: N3.90 per minute for established operators and N4.70 for newer entrants, a benchmark that has remained unchanged since the NCC’s last determination on June 1, 2018.

As the Head of Competition and Tariff at the NCC, Omotayo Mohammed, explained, the foundation of wholesale interconnection affects every stakeholder. Misaligned termination rates, she warned, can enable dominant operators to foreclose smaller competitors, deter infrastructure investment, and ultimately burden consumers through inflated retail prices.

The forum highlighted that the market of 2026 bears little resemblance to the one that informed the 2018 model. Since then, the naira has lost significant value, inflation has eroded purchasing power, and the cost of diesel and imported equipment has skyrocketed.

Operators argued that these factors have materially altered cost structures, rendering the old rates unsustainable.

Forces of 5G, WhatsApp and economic headwinds
STAKEHOLDERS identified three primary forces compelling the review. First, technological evolution is reshaping network usage. The commercial deployment of 5G networks, the rise of Artificial Intelligence (AI)-driven services, and the Internet of Things (IoT) have altered cost structures and service delivery models.

Second, the Over-the-Top (OTT) disruption is undeniable. Platforms like WhatsApp and Telegram are capturing significant voice and messaging traffic, reducing reliance on traditional interconnection and weakening legacy wholesale revenue streams. This shift forces regulators to rethink a pricing model built for a voice-centric world.

Responding on behalf of the consultative panel, a KPMG representative, Wole Adenekan, said under the current regulatory landscape, WhatsApp and Telegram voice calls remain entirely unregulated. However, he said the planned cost study aims to closely examine international benchmarks to provide the NCC with actionable insights on how foreign jurisdictions handle OTT traffic.

Third, macroeconomic pressures are crippling. ATCON’s Coordinator of Telephone Operators, Chidi Ibisi, painted a grim picture of the prevailing economic headwinds threatening to undo decades of progress.

“High Interest Rates of over 33 per cent, high Foreign Exchange rates, high inflation, and the soaring cost of imported network equipment, diesel, and transportation are severely impacting the capital and operating expenses of our members,” Ibisi told the gathering. “This significantly affects their ability to maintain the high levels of investment required to drive the new digital economy.”

ATCON noted that despite these headwinds, telecom operators are still planning to invest over $1.38 billion this year alone in network capacity upgrades, resilience, coverage enhancement, and quality of service improvements. However, the association stressed that such investments are unsustainable without a pricing framework that reflects the true cost of operations.

The consumer conundrum
THE consumer impact was a major topic. KPMG’s Wole Adenekan noted that a “mis-set MTR” can lead to barriers for smaller players and ultimately inflate prices for end-users.    The NCC promised a transparent, evidence-based approach to ensure affordability. However, the possibility of higher call and SMS tariffs loomed if rates are reviewed upward to reflect operator costs. The challenge is balancing the financial health of operators with consumer protection.

Already, the operators, in a strong reassurance, stated that the adjustment is strictly an industry-level measure and will not translate into higher call or data charges for consumers.

The telcos under the aegis of the Association of Licensed Telecom Operators of Nigeria (ALTON) said the MTR is between telcos and not expected to be a burden on the about 188 million subscribers in the country.

Days after the forum, speaking on a national television, the Chairman of ALTON, Gbenga Adebayo, said: “I must assure the public that what is going on is a regular process where our regulators determine what a fair price for operators to charge amongst themselves, for calls they carry and terminate on each other’s network.”

He said there was no discussion of upward review of tariff for telecom consumers, explaining that what NCC started is a cost study that determines the wholesale rate between operators, which is the internal charges among service providers.

Mapping the future
TO navigate the complexity, the NCC has engaged KPMG to undertake the study over the next four months. The scope is ambitious, extending beyond voice termination:

· Cost-Reflective Framework: A new determination reflecting current economic realities across technology generations (2G to 5G).

· International and Asymmetric Rates: Addressing grey-route traffic and reviewing the protective asymmetry for new entrants.

· Digital Services and MVNOs: Creating a pricing framework for Unstructured Supplementary Service Data (USSD) and Application-to-Person (A2P) SMS, essential for financial services, and formalising pricing for Mobile Virtual Network Operators (MVNOs) to deepen competition.

At the meeting, Adebayo assured the NCC of full cooperation. He noted that recent retail tariff adjustments provided relief, stating, “From concerns about the health of the industry, we have moved to a position where operators are making substantial investments.”

Stakeholders’ flashpoints
THE forum exposed several critical friction points between operators, tech advocacy groups, and the regulatory team:

Speaking from the floor, Blessing Olaseni, a tech expert, raised the “Lagos Bias” critique. He said Africa challenged the equity of the study, warning against a heavy reliance on Lagos-centric metrics. Olaseni argued that cultural dynamics and regional purchasing power vary drastically across Nigeria, making it imperative to collect comprehensive data from the South-West and other geo-political zones.

Israel Adebayo of Protonetwork advocated for the formal inclusion of organised labour unions in the data certification process. Proponents argue that involving labour bodies would provide an objective layer of consumer verification, ensuring transparency and fairer compensation mechanisms for failed Value-Added Services (VAS).

Alhasan Mohamed of Alpha Technologies urged the NCC to adopt a “heavy hand” on online and virtual formats for upcoming one-on-one sessions, citing the immense time and financial strain of moving entire corporate teams to physical meeting venues under a compressed timeline.

Indeed, the decision on MTR will not only reshape the telecoms landscape but also influence how Nigeria positions itself in the race toward a more connected, competitive, and cost-conscious future.