The Nigerian Communications Commission (NCC) has commenced a review of interconnection rates for voice calls and SMS services across telecom networks, a development that could lead to higher charges for mobile subscribers in Nigeria. The review comes as regulators assess the Mobile Termination Rate (MTR) regime introduced eight years ago.

The move was discussed at a stakeholders’ consultative forum held in Lagos on Tuesday, where industry experts highlighted rising operational costs and economic pressures affecting telecom operators.

Rising Costs Drive Regulatory Review

According to KPMG partner, Wole Adenekan, the review has become necessary due to major economic changes since 2018.

He cited inflation, naira depreciation, rising energy costs and higher equipment expenses as key factors increasing operators’ cost structures.

“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 added that while cost-reflective pricing could improve efficiency and investment in the sector, consumers may ultimately bear the impact through higher retail charges.

Telecom Sector Evolution Under Consideration

Adenekan also pointed to technological shifts, including the rollout of 5G networks, increased use of artificial intelligence and Internet of Things (IoT) services, as well as competition from Over-the-Top (OTT) platforms, as reasons the current interconnection framework may no longer reflect industry realities.

He noted that these changes have significantly altered how telecom services are delivered and consumed in Nigeria.

NCC Explains Policy Direction

The NCC, through its Head of Competition and Tariff Unit, Omotayo Mohammed, described the review as a necessary regulatory step aimed at aligning pricing structures with current economic and technological realities.

She said the commission would also assess existing retail price controls and asymmetry arrangements to ensure consumer protection while maintaining sector stability.

Concerns Over Possible Tariff Increase

While the review is aimed at balancing operator sustainability and competition, there are growing concerns that any upward adjustment in interconnection rates could translate into higher call and SMS costs for consumers.

The outcome of the review is expected to shape pricing trends in Nigeria’s telecom sector in the coming months.