Umaru Garba Danbatta, Executive Vice Chairman Nigerian Communications Commission,(NCC) said that a sound and functional interconnection regime is an essential step in the process of fine tuning the regulatory regime which would assist effective regulations in the Nigerian telecommunications market.
“It is very important we ensure that interconnection services are not only fairly priced and non-discriminative but should reflect the cost of providing such services in the market.It is in this regard that the Commission has decided to review the rates set in its 2013 determination in the light of current market realities”Danbatta said.
Danbatta made the disclosure on Wednesday in Abuja during the Stakeholders Forum on the cost based study for the determination of mobile voice services.
He recalled that the commission carried out an in-depth cost study and made a determination on the interconnection rates for voice services which took effect from April, 2013,as he noted that a review has become necessary as there is growth in subscriber numbers and traffic volumes.
According to him, since the last determination, the NCC market has witnessed tremendous growth in both subscriber numbers as well as traffic volumes, stating that changes in available technologies in 2G, 2.5G, 3G and 4G and other networks elements including global financial markets which have an impact over inputs such as the cost of capital.
The EVC disclosed that the scale of changes will inevitably affect the unit cost of providing services including interconnection and may lead to difference between regulated interconnection rates and underlying costs which in turn may result in differences between on –net and off-net retail tariffs.
“It is very important we ensure that interconnection services are not only fairly priced and non-discriminative but should reflect the cost of providing such services in the market. It is in this regard that the commission has decided to review the rates set in its 2013 determination in the light of current market realities”. He said.
Danbatta explained that this study provides the opportunity to thoroughly examine the emergence of grew market activities in the telecoms industry in Nigeria such as call refilling, call masking and sim-box fraud as a result of the introduction of an interim international termination rate it for in bound international traffic.
He explained that the commission has carried out a thorough selection process and appointed Messr’s Price Water House Copper LLP (PWC) to carry out an impact assessment on the subsisting interconnect regime, identify short falls on the subsisting interconnection rate regime and provide workable solutions and determine if there is need to have different termination rate for national/ domestic and international traffic.
It also include determining the mobile termination rate for voice services using appropriate cost modeling techniques for new entrants / small operators and existing, big operators
Determine the appropriate basis for glide path ( if necessary) and develop a suitable definition of a new entrants (s) small operator to enjoy the benefits of asymmetric rates among others.
Danbatta maintained that the commission has a n obligation to create a level playing field for all operators, and in line with international standard practice and ensure that interconnect rates reflect the cost of termination on the networks.
