The Nigerian Communications Commission has launched a full-scale review of mobile termination rates. This is the first adjustment since 2018. The current rate of N3.90 per minute for generic operators and N4.70 for new entrants no longer matches the economic and technological realities of the sector.
The review was announced at a stakeholder forum in Lagos. NCC Head of Competition and Tariff Omotayo Mohammed said the existing rates distort competition. Dominant operators can use inflated termination charges to squeeze smaller rivals. Consumers end up paying higher retail prices. The review will also address the impact of naira depreciation, inflation and rising energy costs on operator expenses.
Technology has moved faster than regulation. The 2018 cost model did not anticipate 5G networks, AI-driven services or the Internet of Things. Over-the-top platforms like WhatsApp and Telegram now carry significant voice and messaging traffic. This reduces reliance on traditional interconnection and weakens wholesale revenue streams. The NCC has hired KPMG to conduct the study. The consultancy will run for four months and cover USSD services and Application-to-Person SMS.
The review is anchored in Sections 4, 96, 97 and 108 of the Nigerian Communications Act 2003. These sections mandate the NCC to promote investment, protect consumers and ensure fair competition. The study will deliver a cost-reflective framework across technology generations, operator categories and clearing house arrangements. It will also review International Termination Rates to curb grey-route traffic and establish pricing for Mobile Virtual Network Operators.
Stakeholders will have multiple opportunities to submit views and validate assumptions. The NCC has pledged to publish its methodology, key assumptions and cost model parameters. This transparency is intended to build trust and encourage infrastructure investment. The review is expected to support retail affordability and improve access to digital financial services. Operators will benefit from cost recovery that reflects current capital and operational expenditure.
The delay in reviewing the rates has created structural imbalances. Previous reviews were conducted every three to four years. The eight-year gap has left the sector with outdated pricing signals. This has discouraged investment in network expansion and quality improvement. Smaller operators have struggled to compete with dominant players who can absorb higher termination costs. The review aims to level the playing field and encourage market entry by new players.
The review will also examine the asymmetric rate structure between large and new entrant operators. This structure was introduced to support smaller operators. However, the current rates may no longer provide adequate protection. The study will assess whether the asymmetry should be maintained, adjusted or phased out. This decision will have significant implications for competition and investment in the sector.
The NCC has framed the review as a critical step towards positioning Nigeria as Africa’s digital hub. A stable and transparent regulatory environment is essential for attracting domestic and foreign investment. The review is expected to provide predictable signals for infrastructure investment and innovation. This is particularly important as the sector prepares for the rollout of 5G and other advanced technologies. The outcome will shape the future of Nigeria’s telecommunications industry for years to come.
