Telecom Operators May Enjoy Lower Interconnect Rates

Interconnect rates in Nigeria may reduce significantly in the weeks ahead following a study that showed that the capital expenditure of mobile and fixed operators are going down, investigation has shown.

Although the study is yet to be made public, sources at the Nigerian Communications Commission indicated on Wednesday that it would host operators and stakeholders in a closed door meeting in Lagos on Thursday.

At the meeting, the regulatory agency and operators would sit down in and discuss the findings of the study which was conducted by international consultancy firm, PricewaterhouseCoopers.

The study commissioned by NCC looked at cost-based termination of calls both within the Nigerian jurisdiction and other jurisdictions across the world.

It is expected that the study would guide discussion between the operators and the regulatory agency in the bid to ensure that operators contribute in fixing the interconnect rates that would apply in the telecoms industry in the months and years ahead.

Interconnect rate which can influence the tariffs that operators ultimately charge subscribers is the price operators pay for terminating calls in another network. This applies to calls that originate in a network and terminates in another network and does not apply on calls within the same network.

It was also gathered that the meeting in Lagos would look into issue of unpaid interconnect debt within the industry to enable operators to resolve the thorny issue which had in the past led to some indebted operators being disconnected by some others.

The last time NCC tampered with interconnect rate was in 2009 when Engr. Ernest Ndukwe still held sway at the regulatory agency as the Executive Vice Chairman.

It was gathered that since then, the cost elements of telecommunications operators including capital expenditure had gone down considerably. This gives indication that the interconnect rate would likely go down with the on-going review.

It was in the bid to avoid arbitrariness and assumptions not based on facts that NCC commissioned PricewaterhouseCoopers to undertake a study to determine the cost operators incur in the process of terminating calls.