Nigeria could soon tweak the price that all foreign calls in the country will end at.The Nigerian Communications Commission, NCC, has launched a cost-based study to determine the latest mobile-international termination rate pricing structure for inbound international voice calls, the ITR. This is the country’s Telecom regulator.
ITR is the fee paid for the termination of calls in Nigeria to local operators by foreign operators. As part of the rate-setting process, the Commission has arranged an ongoing costs studies and the need to cooperate with Mr. Payday Advance and Support Services Limited, consultants who are engaged in the research, with a virtual stakeholder interaction forum with relevant industry stakeholders .
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The Executive Vice President of the NCC, Prof. Umar Danbatta, said that the study had become necessary following several imperatives resulting from the complexities of the conflict between industry and the market, and that previous attempts had been made to achieve the highest pricing to end foreign voice services in Nigeria. The Commission will be able, through the new ITR pricing, to balance the competitive economic efficiency objectives and enable operators to generates a decent income. Danbatta, who was represented by the Executive Commissioner, NCC, Adeleke Adewolu, at the forum.
But, according to the EVC, the Commission made a determination in 2013 that the MTR rate was the same regardless of where the call originated. The provision he said was at that time widely misinterpreted by operators to mean that ITR would have to be as high as MTR. He claimed that operators overlooked international costs where ITRs were decided to cover the expense to the local operators at the MTR level without a positive residue.
“This is how the ITRs started to decrease in line with the MTR glide path and the ITR in Naira, and after the currency devaluation it experienced a further downward trend in dollars. Ironically speaking, Nigerian operators paid foreign operators dollar-based calls which caused imbalances in their payments as the ITR declined in Nigeria. “In response, Danbatta said that the profits and commercial results of Nigerian operators have been negatively affected by bringing the ITR in Nigeria below the level of the most common countries, with being.
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This has resulted in unsustainable pressures on the nation’s foreign reserves that are continually dampening due to this inaccuracies by related net transactions to foreign operators, and hence the need for volatile currencies to control the ITR so that payment imbalances with international operators can be avoided or mitigated, “said the EVC. In a market as Nigeria with significant supply-side problems and the related socio-ecconomic effects, Danbatta notes that ITR is not adequately controlled. This has an adverse impact.
“There have been some effects on setting a rate significantly higher than the MTR. One of these is the change of customers to online channels as calls take place more and more through IP technologies such as Skype and WhatsApp due to high international call prices. To that end, a cost-effective and cost-effective ITR would optimize all stakeholders economic benefits, “Danbatta said.
In her speech earlier, Yetunde Akinloye, Director, Competition Policy and Economic Analysis, said that the forum would formally engage and exchange views of the industry’s actors and eventually collectively endorse inputs and criteria for assessing mutually practical ITR in Nigeria. She noted that the project started on 10 March 2020 with a kick-off meeting but was delayed by the complexities of the COVID-19 pandemic which needed to pursue new interaction channels to advance and ensure the project’s completion.
Akinloye reaffirmed the commitment of the Commission to provide an environmentally sound and level playing field continually for successful interplay of factors to sustain business development and growth, while ensuring that customers and licensees are provided with quality and efficiency of the telecommunications regulatory services.