New ITR set at $0.045 per minute is a gold mine
By Jeph Ajobaju, Chief Copy Editor
Telecom carriers will generate at least $32.272 million each year from the new minimum International Terminate Rate (ITR) of $0.045 per minute fixed by the Nigerian Communications Commission (NCC) which begins on January 1, 2022.
NCC data shows total incoming international voice traffic to Nigeria was 717,166,679.72 minutes in 2020. The figure is expected to rise every year.
But for it to merely hold in 2022 and beyond will translate to $32,272,500.58 income shared between MTN, Airtel, Glo, 9mobile, and other players in voice traffic alone each year.
ITR for voice service is paid by overseas carriers for terminating international calls on local networks in Nigeria, according NCC document titled “Determination of Mobile (Voice) International Termination Rate”.
__________________________________________________________________
Related articles:
Millions of e-devices worldwide exposed to malware, US warns
Telcos gain 195,313 subscribers, but to pay N200K for NIN verification default
NCC’ll sanction telecom operators which defraud Nigerians with drop calls
__________________________________________________________________
Why ITR is now denominated in dollars
“The current regime of interconnection rates was sustained by the commission’s mobile (voice) termination rate issued on 1st June 2018.
“In the determination, it was stated that the international termination rate of N24.40 determined in 2016 will continue to apply until a new determination is made,” the NCC explained, per reporting by The PUNCH.
“The international termination rate being denominated in naira had multiple negative impacts on operators which were further exacerbated by series of devaluation of naira which ultimately left Nigeria from being a net receiver of international minutes to a net payer.”
The NCC said the challenges operators faced because of the denomination of ITR in naira prompted a cost-based study on the rate.
It engaged Payday Advance and Support Services to do a cost-based study of voice ITR to determine a more suitable rate.
ITR services will now be denominated in dollars to stave off the effect of naira devaluation on telecom operators.
“The international termination rate for voice services paid by overseas carriers for terminating international calls on local networks in Nigeria shall be $0.045.
“The $0.045 is the floor price for ITR services. The ITR will be paid in US$ and so operators will receive an increasing rate in naira terms should devaluation continue. The ITR rate only pertains to the cost of bringing traffic into Nigeria.”
Operators can negotiate a higher ITR
The NCC clarified that local operators will continue to pay ITR in naira but can negotiate a price above $0.045 with international carriers, paid in dollars.
“No operator can charge or receive rates per minute below the ITR floor rate as anyone that does this is in contravention of its rate and will attract sanctions in line with the Nigerian Communications Regulations, 2019.”
The NCC said the N3.90 Mobile Termination Rate (MTR) for generic 2G/3G/4G operators and N4.70 for new entrant (LTE) operators set in 2018 continue to apply for all local call terminations until a new rate is determined.
MTR is the charge levied by a mobile service provider on other telecom service providers for terminating calls in its network. MTR has no direct impact on prices for customers.
Voice termination explained
Voice termination, also called call termination, means that when you place a call it is routed from one provider to another until it gets to its final destination (end-user).
The point at which the call is received at the end of the cycle is called voice termination, according to allaccesstelecom.com
The endpoint at which a call is received can be another phone or a service such as Skype.
A voice termination provider handles the rearranging of this data when it gets to its final destination. The rearranging is vital since it keeps the call and voice quality high for the users.
Without good call quality, the voice would deteriorate, making understanding the caller next to impossible. Like when you have bad phone reception and hear every few words. That makes for a frustrating conversation.
