Nigeria's NCC partners KPMG for comprehensive telecom pricing review

The Nigerian Communications Commission (NCC), in collaboration with consultancy firm KPMG, has launched a comprehensive review of the country's telecom interconnection pricing. This significant undertaking marks the first major reassessment of the sector's tariff framework in approximately ten years, aiming to modernize regulations in line with the industry's rapid evolution.

The review process commenced at a stakeholder forum in Lagos, bringing together regulators, telecom operators, and industry participants. The core objective is to re-evaluate the wholesale pricing rules that govern the fees operators pay each other to complete calls across different networks. These Mobile Termination Rates (MTRs) are crucial as they influence market competition, investment decisions, and ultimately, the retail prices consumers pay.

According to the NCC, the current framework, last updated in 2018 and adjusted in 2022, has become outdated due to substantial structural changes in the market. These include the widespread rollout of 5G technology, the increasing dominance of data-led services, and the emergence of mobile virtual network operators (MVNOs). Additionally, macroeconomic pressures, such as currency depreciation and inflation, have significantly altered the cost structures for telecom operators.

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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 this exercise extends beyond a routine tariff review. He stated that the telecom market has undergone material changes in both technology deployment and market structure since the last determination. New service categories and business models now require regulatory attention to ensure the frameworks remain effective and aligned with industry advancements. The review is being conducted under Section 108 of the Nigerian Communications Act 2003 to ensure tariffs are cost-reflective and non-discriminatory.

KPMG's Wole Obayomi, Partner and Head of Tax, Regulatory and People Services, highlighted that the study will employ a combination of data analysis, stakeholder consultations, and international benchmarking. The goal is to identify gaps in the existing regime and determine if a structured review cycle is necessary. Obayomi stressed the importance of industry input in developing potential solutions and recommendations to address any identified shortfalls. The review will also assess the sustainability of current tariff structures and their impact on investment capacity and service quality.

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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.