Nigerians may soon face another increase in telecommunications costs as the Nigerian Communications Commission (NCC) begins a review of interconnection rates for voice calls and SMS services, a move that could ultimately translate into higher charges for subscribers already grappling with rising data costs.
The review, which comes eight years after the last adjustment of Mobile Termination Rates (MTRs), has raised concerns among consumers and industry watchers who fear that any upward revision could trigger fresh increases in call and text messaging tariffs across mobile networks.
Interconnection rates are wholesale charges paid by one telecom operator to another whenever a subscriber makes a call that terminates on a different network. The current rates stand at between N3.90 and N4.70 per minute.
Speaking at a stakeholders’ consultative forum on the determination of Mobile Termination Rates in Lagos on Tuesday, Partner at KPMG, Wole Adenekan, argued that the existing rates no longer reflect the realities of the telecommunications market.
According to him, inflation, naira depreciation, soaring energy costs, rising equipment prices and the expansion of 5G services have significantly altered operators’ cost structures since the rates were last reviewed in 2018.
He noted that rates set below actual costs could discourage investment in network infrastructure, while cost-reflective pricing would support competition, encourage efficient investment and contribute to economic growth.
“A mis-set MTR can enable dominant operators to foreclose smaller competitors through high termination barriers. A cost-reflective rate supports a level competitive playing field,” Adenekan said.
He, however, acknowledged that inflated termination charges are often passed on to consumers through higher retail prices.
The KPMG official also pointed to growing competition from over-the-top (OTT) platforms such as internet-based messaging and calling services, which are steadily eroding traditional telecom revenue streams.
At the forum, NCC’s Head of Competition and Tariff Unit, Policy Department, Omotayo Mohammed, said the review was necessary to ensure the Commission’s regulatory framework keeps pace with rapid technological and economic changes.
She explained that the telecommunications industry has undergone significant transformation since the 2018 determination, driven by the rollout of 5G technology, the emergence of Mobile Virtual Network Operators (MVNOs), and changing market dynamics.
Mohammed said the review would also assess existing retail price controls and asymmetry arrangements to balance industry sustainability with consumer protection.
“Our existing national interconnection rate regime was established in 2018 and subsequently adjusted only for international termination rates in 2022,” she said.
“The years since then have witnessed unprecedented changes in both the telecommunications market and the broader economy. Inflation, exchange rate movements and other macroeconomic factors have substantially increased the cost of providing communications services.”
She added that under the Nigerian Communications Act 2003, the Commission is mandated to ensure that telecom tariffs remain reasonable, cost-reflective and non-discriminatory.
The development comes at a time when many Nigerians are already expressing frustration over rising data subscription costs, raising fears that a review of interconnection rates could usher in another round of tariff increases for voice and SMS services, further stretching household communication budgets.
