Home News Interconnect rate to reduce to N3.90k in 2015, says NCC

Interconnect rate to reduce to N3.90k in 2015, says NCC


nigerian-communications-commission_ncc-300x199LAGOS – Dr Eugene Juwah, the Executive Vice-Chairman of the Nigerian Communications Commission (NCC), has said that interconnect  rate in the telecommunications industry would reduce to N3.90k by 2015.

Juwah said in a statement in Lagos that the reduction was expected to further reduce the cost of making calls from one network to another and calls within a network.

NAN reports that interconnect rate is the amount that a telecoms operator pays another operator for terminating a call on such network.

NCC had on April 1, 2013 announced N6.40 as termination rates for voice services provided by new entrants and small operators in Nigeria irrespective of the originating network.

Other operators were to charge N4.90.

The NCC boss said interconnect rate should be cost-based according to international best practices.

Juwah said that in 2012, NCC had to hire Price Waterhouse Coopers from London which had a good model for determining the cost of making a call in Nigeria.

“’Of course, these calls are average and so they interviewed all the operators, got their data, put it into their model and came up with the price of making calls today.

“’You see it must keep on coming down because equipment are being amortised (i.e, to pay a debt by making regular payment).

“The new equipment being brought in now are not as big as the ones they started with. You can see the drop in interconnect rate.

”We adopted what is called a gliding model; it is reducing year by year from N6.40k and by the end of the third year which is next year it will be N3.90k,” he said.

Juwah said that telecomms operators liked the gliding model, but only disagreed on the model which was asymmetrical in nature.

“Asymmetrical means when big operators pay smaller operators bigger sums to interconnect.

“The asymmetric method is important to protect the small operators.’’

The NCC boss said that operators that had less than 7.5 per cent of the subscriber base were regarded as small operators.

They included the Code Division Multiple Access (CDMA) and new operators in the industry, he added.

“Small operators pay huge money to big operators whenever interconnection is considered.

“By tilting the interconnect rate to favour small operators, we try to strike a balance; they still pay huge amount but at least we have mitigated it,” he said. (NAN)

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