Sunday , October 17 2021
International Termination Rate: ATCON Reacts to NCC's Move on Voice Services

International Termination Rate: ATCON Reacts to NCC’s Move on Voice Services



Association of Telecommunications Companies of Nigeria (ATCON) President, Mr Olusola Teniola has reacted to the telecoms regulator move on setting a new pricing regime for mobile international termination rate (ITR) for inbound international voice calls in the country.

Recall, Business Remarks reported that the Nigerian Communications Commission (NCC) has embarked on a cost-based study to determine a new International Termination Rate pricing for voice services.

The ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.

According to the commission, where ITR is not properly regulated, it tends to have a negative effect on a market like Nigeria with major supply-side challenges and associated socio-economic implications.

As a result, NCC positioned that the move will help to balance the competing objectives of economic efficiency and allowing operators the latitude to generate reasonable revenue.

Speaking with Business Remarks, Teniola said mobile termination rate (MTR) rates in between operators will have a moderate impact due to an increase in voice call originations and terminations over IP especially OTT apps used during the peak of the pandemic period and resultant lockdown imposed.

However, Teniola noted that the resulting devaluation of the naira against foreign currencies impacted ITR rates significantly as a percentage of the rate in the fall since 2016 to date. Especially the ITR rate changes made to counter the currency risks in the past may no longer be considered effective.

Speaking on LinkedIn, the ATCON Boss said most settlements don’t involve actual payments but are net-off with the gains appearing on the P&L and balance sheet. 80 minor risks to ITR unless terms are all pre-paid which I can’t believe the MNO with longstanding accounts cannot negotiate on.

Furthermore, he said consumers are switching to Over-The-Top (OTT) voice apps that bypass these traditional settlements but settle offshore with no impact to Federal reserves. Couple with the fact that FOREX market are hard to predict. Let’s hope arbitrage is minimised by NCC’ move.

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Highlighting NCC’s concern, Teniola added that the difficulty is that unless Mobile Network Operators (MNOs) and International Data Access (IDA) operators are able to renegotiate rates, the marginal profit for terminating traffic into Nigeria will be eroded against international traffic originating from Nigeria into foreign owned networks.

“This has to be viewed in the context of weakening consumer spending power and a decline in minutes used per subscriber” he added.

 


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