Fresh review as NCC signals potential tariff shift on mobile termination rates

By Philippine Duru

philippineobetoduru@gmail.com

08034905774

Nigeria’s telecommunications industry could be on the cusp of another major regulatory shift following the decision by the Nigerian Communications Commission (NCC) to reopen the review of Mobile Termination Rates (MTRs) for the first time in eight years.

The move has sparked widespread interest among telecom operators, investors, industry stakeholders and consumers, given the critical role termination rates play in determining the cost of inter-network calls and the overall economics of the telecommunications sector.

Mobile Termination Rates are the charges one telecom operator pays another for completing calls on its network. These wholesale rates form a key component of the cost structure of mobile service providers and can influence retail pricing, network investment decisions and competition within the industry.

The NCC’s decision to revisit the framework comes amid significant changes in Nigeria’s telecommunications landscape since the last review was conducted. The sector has experienced rapid growth in subscriber numbers, increased data consumption, rising operating costs, currency depreciation, inflationary pressures and substantial investments in network infrastructure.

Industry analysts say the review is aimed at ensuring that existing termination rates accurately reflect current market realities and the actual cost of providing telecom services.

According to stakeholders, the review could lead to either an upward or downward adjustment in termination charges depending on the outcome of the commission’s cost analysis and consultations with industry players.

Telecom operators have long argued that escalating operating expenses—including energy costs, foreign exchange volatility, infrastructure maintenance expenses and regulatory compliance obligations—have significantly altered the economics of network operations since the last review.

The industry has also witnessed growing demand for digital services, expansion of 4G and 5G networks, and increased investments in fibre infrastructure, all of which require substantial capital expenditure.

Market observers note that any revision of Mobile Termination Rates could have implications for retail voice tariffs, although the exact impact would depend on the final rates approved by the regulator and how operators choose to incorporate them into their pricing strategies.

If termination rates are increased, telecom companies could see improved revenue from interconnection services, potentially easing financial pressures and supporting further investments in network expansion. However, higher wholesale costs could eventually translate into higher charges for consumers if operators pass some of the additional costs through to subscribers.

Conversely, lower termination rates could intensify competition and reduce operating costs for some providers but may also compress industry revenues, particularly for operators with large subscriber bases that receive significant volumes of incoming traffic from rival networks.

The review comes at a critical time for Nigeria’s telecommunications sector, which remains one of the country’s most important contributors to economic growth. The industry contributes significantly to Gross Domestic Product (GDP), supports millions of jobs directly and indirectly, and serves as the backbone of the country’s digital economy.

Experts believe the NCC will seek to strike a balance between ensuring fair competition, protecting consumers, and maintaining incentives for continued investment in telecommunications infrastructure.

The commission is expected to engage operators, consumer advocacy groups, industry associations and other stakeholders during the review process to ensure transparency and achieve outcomes that support long-term sector sustainability.

Investors are also closely monitoring developments, as any changes to termination rates could affect the earnings outlook of major telecommunications companies operating in Nigeria. The country’s telecom sector has become increasingly attractive to investors due to rising demand for data services and digital connectivity.

Beyond pricing considerations, analysts view the review as part of broader regulatory efforts to modernize Nigeria’s telecommunications framework and align it with evolving technological and market realities.

As consultations progress, industry stakeholders will be watching closely for indications of the NCC’s preferred direction and the potential implications for operators, consumers and the wider digital economy.

The outcome of the review could ultimately shape the future structure of telecom pricing in Nigeria and influence investment decisions across a sector that continues to play a pivotal role in the country’s economic transformation and digital development agenda.