NCC begins telecom pricing review after eight years

The Nigerian Communications Commission (NCC), in collaboration with consultancy KPMG, has launched a comprehensive review of telecom interconnection pricing. This marks the first significant reassessment of the sector's tariff framework in approximately eight years, with the current rules last set in 2018 and adjusted in 2022.

The review, kicked off at a stakeholder forum in Lagos, aims to update the wholesale pricing rules that govern payments between mobile operators for completing calls across different networks. These Mobile Termination Rates are crucial as they influence competition, investment, and ultimately, retail pricing for consumers.

The NCC stated that the existing framework has been outpaced by substantial market changes. These include the rollout of 5G technology, the expansion of data-centric services, and the emergence of mobile virtual network operators. Additionally, macroeconomic factors like currency depreciation and inflation have significantly impacted operators' cost structures, necessitating a review.

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For regulation to remain effective in a fast-moving market, our frameworks must evolve in step with it.

Omotayo Mohammed, Head of the Competition and Tariff Unit at the NCC, emphasized that the exercise goes beyond a routine tariff review. It reflects a need to align regulations with a rapidly evolving industry. "For regulation to remain effective in a fast-moving market, our frameworks must evolve in step with it," Mohammed said. The review is being conducted under Section 108 of the Nigerian Communications Act 2003 to ensure tariffs remain cost-reflective and non-discriminatory.

KPMG's role involves data analysis, stakeholder consultations, and international benchmarking to inform a revised pricing framework. Wole Obayomi, Partner and Head of Tax, regulatory and people services at KPMG, highlighted the importance of industry input to address shortfalls in the existing regime. The study will examine pricing across wholesale and retail segments, assess the inclusion of emerging services, and evaluate the sustainability of current tariff structures concerning investment, service quality, and consumer affordability.

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It is important that we get input from the industry in terms of potential solutions and recommendations to address the shortfalls.