The Nigerian Communications Commission (NCC) has commenced a significant review of interconnection prices between telecom operators, marking the first substantial adjustment to the sector’s pricing policy since 2018. This strategic move, aimed at aligning regulatory frameworks with the dynamic evolution of the telecommunications market, is poised to have far-reaching implications for the nation’s 185 million subscribers and the broader business ecosystem.
Head of the Competition and Tariff Unit at the NCC, articulated the necessity of this comprehensive reassessment at a recent stakeholders’ consultation forum. He emphasised that the exercise transcends a routine tariff review, representing a structured approach to recalibrating the wholesale pricing rules that govern inter-operator payments for call completion. The NCC is collaborating with the international consultancy firm KPMG to conduct this critical evaluation.
Mobile termination rates, the regulated fees one Mobile Network Operator (MNO) pays another to complete calls across their respective networks, are fundamental to market competition, investment decisions, and ultimately, retail pricing. These rates directly impact operational expenditures for telecom firms. Recent macroeconomic pressures, including inflation and exchange rate depreciation, coupled with the rapid expansion of 5G technology, data-centric services, and the emergence of Mobile Virtual Network Operators (MVNOs), have necessitated a re-evaluation of the existing 2018 framework. Mohammed highlighted that while minor amendments were made in 2022, the current technological advancements, new service categories, and evolving business models demand contemporary regulatory attention. “For regulation to remain effective in a fast-moving market, our frameworks must evolve in step with it,” he stated. The review is being conducted under Section 108 of the Nigerian Communications Act 2003, ensuring that tariffs remain cost-reflective and non-discriminatory. This initiative coincides with the NCC’s ongoing revision of the Nigerian Telecommunications Policy 2000.
For the 185 million Nigerian subscribers, the implications of this pricing review are substantial. Consumers are invariably at the forefront of tariff adjustments in the highly utilised telecommunications sector. The 50% telecoms tariff hike implemented in 2025, which significantly increased the cost of voice calls, SMS, and data, placed a considerable burden on subscribers, particularly those with lower incomes, thereby diminishing their purchasing power. Historically, increased operational costs are often passed on to the end consumer. Consequently, Nigerian subscribers may face a similar scenario with the proposed adjustments to interconnection pricing. An increase in the cost of connecting calls to different networks typically translates into higher charges for subscribers. For instance, if the cost for MTN to connect a call to an Airtel subscriber rises, MTN subscribers may incur higher charges for off-net calls. Conversely, on-net calls within the same network might remain unaffected. This pricing adjustment is likely to prompt telecom operators to adopt differentiated pricing strategies for calls made within their network versus those made to other networks.
KPMG, in its presentation at the consultation forum, outlined that the determination of new pricing will be a multi-faceted process, integrating data analysis, extensive stakeholder consultations, and international benchmarking. Wole Obayomi, Partner and Head of Tax at KPMG, stressed the critical importance of industry input in formulating potential solutions and recommendations to address identified shortfalls. The review will meticulously examine pricing practices across both wholesale and retail segments, assessing whether emerging services are adequately encompassed within current regulatory definitions. Furthermore, the sustainability of existing tariff structures will be evaluated, with due consideration given to investment capacity, service quality, and consumer affordability. To facilitate this, the NCC will require operators to furnish comprehensive financial and operational data, including revenue, costs, profitability, market share, capital expenditure, service quality metrics, and usage trends over several years. Opinions from MNOs, MVNOs, international carriers, clearing houses, and interconnect exchange providers will also be rigorously vetted. Comparative analysis of Nigeria’s regulatory framework against those of peer markets such as South Africa and Kenya, as well as emerging economies like Indonesia and Malaysia, will inform the recommendations for the revised interconnection pricing structure.
... NCC Initiates Landmark Interconnection Pricing Review, Signalling Shift in Telecoms Regulatory Landscape ... Naijaonpoint.