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NCC refutes possibility of hiking GSM Call Rates

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The Nigerian Communications Commission (NCC) has refuted claims that the commission might hike GSM call rates in Nigeria.

“The Nigerian Communications Commission has observed that two media organizations have published speculative reports alluding to plans by the Commission to increase the price of mobile voice calls in Nigeria.

ImageFile: NCC refutes possibility of hiking GSM Call Rates“The general public and our layers of stakeholders are hereby advised to discountenance the reports. There is no truth to them,” the NCC said in a statement.

Before the general public and NCC’s layers of stakeholders discountenance the reports, there are clarifications the commission needs to make so that its intentions are not misunderstood.

What is interconnection rate? What is mobile voice termination rate? What is voice call rate? What is GSM call rate?

NCC recently convened a stakeholders’ forum, made up of telecoms operators, telecoms subscribers, and among other stakeholders, to present a report of Cost Based Study carried out by PriceWaterhouseCoopers (PwC) that will determine mobile voice termination rate.

The Commission said it is in keeping with its principle and tradition of transparency and constructive engagement with its stakeholders that it had organized the forum for PwC to present the report of the study.

Executive Vice Chairman of the NCC, Umar Garba Danbatta, noted at the forum that the telecoms regulatory body is duty-bound to “ensure that interconnection services are fairly priced, non-discriminatory, and reflect the real cost of providing such services in the market”.

According to the PwC study, eleven (11) focus areas, which include developing measures to reduce or eliminate grey markets in the telecoms industry in Nigeria; evaluation of the subsisting interconnect regime; and to determine if there is need for different termination rate for national/domestic and international traffic, would be reviewed to reflect present market realities.

TheNewsGuru analysed present market realities and reported that the realities do not portend there would be a downward review of interconnection rates.

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Even PwC said in its 2016 Africa Capital Markets Watch publication, which analyses equity and debt capital markets transactions as well as transactions by African companies on international exchanges, said activities in African capital markets shows significant decline in 2016 amidst economic uncertainty and global political upheaval.

Darrell McGraw, PwC Capital Markets Partner based in Lagos, said “Many African economies, in particular those dependent on resources suffered in a low growth environment, significantly reducing ECM activity; and a continued lack of clarity around foreign exchange risk in Nigeria further discouraged foreign investment”.

NCC itself said in the statement refuting the hike claims noted that “The focus of the discussion [at the forum] was the interconnection rate which is usually subjected to a review every three years, while stressing that studies are usually conducted and followed with consultations with stakeholders to arrive at fair, competitive and cost based prices.

TheNewsGuru reported that market realities indicate that at the end of the day, the NCC might only succeed in reaching a consensus for an upward review of interconnection rates, which invariably will result to a hike in GSM call rates.

The NCC is, therefore under obligation to clarify and distinguish between interconnection rates, mobile voice termination rates, voice call rates and GSM call rates in the subsequent consultations that will take place so that the general public and the layers of NCC’s stakeholders do not misunderstand the intentions of the commission.

If those terms mean the same thing, then, in the light of current market realities, a review of the current rates set in 2013 is bound to go only higher.

While the cost of doing business and the prices of commodities are going higher, the income of the general has been adversely affected, especially as there has not been increment of the take-home of the general public. If the NCC reaches a conclusion to up the price of GSM call rates and the purchasing power of telecoms consumers could not carry it, it will affect the sustainability of NCC and telecoms operators infrastructures. NCC, therefore, has to find a way to maintain equilibrium or retain persisting rates.

But, not until the NCC effect the review, it cannot be boldly said NCC will hike the price of GSM call rates.

Also read: GSM tariff: NCC reviews Mobile Voice Termination Rates

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