NCC Begins Major Review of Mobile Termination Rates After Eight Years, KPMG to Lead Cost Study
Nigeria’s telecommunications industry is set for a significant regulatory shake-up as the Nigerian Communications Commission (NCC) begins a comprehensive review of the country’s Mobile Termination Rate (MTR) for the first time since 2018.
The regulator has appointed KPMG to conduct a four-month cost study that will help determine new wholesale call termination rates for telecom operators. The review comes as operators grapple with rising operating costs caused by inflation, foreign exchange volatility, higher energy prices, and increasing network investment demands.
The outcome of the exercise could reshape competition among telecom companies, strengthen the country’s digital infrastructure, and influence the long-term affordability of mobile services for over 188 million subscribers.
Why the NCC Is Reviewing Mobile Termination Rates
Mobile Termination Rate (MTR) refers to the wholesale fee one telecom operator charges another for completing calls on its network.
Although consumers do not pay this charge directly, it plays a major role in determining operators’ operating costs and affects competition across the industry.
According to the NCC, the existing rates have remained unchanged since June 1, 2018, despite major economic and technological changes that have transformed Nigeria’s telecom landscape.
The commission believes the current pricing model no longer reflects today’s market realities, making a fresh cost analysis necessary.
Current Mobile Termination Rates in Nigeria
| Operator Category | Current MTR |
|---|---|
| Established telecom operators | ₦3.90 per minute |
| New entrant operators | ₦4.70 per minute |
The higher rate for newer operators was originally designed to help smaller telecom companies compete with larger networks.
However, industry stakeholders now believe the entire framework needs to be updated.
Eight Years of Economic Changes Have Increased Telecom Costs
Since the last review in 2018, telecom operators say virtually every aspect of network operations has become significantly more expensive.
Some of the biggest cost pressures include:
- Sharp depreciation of the naira
- Rising inflation
- Higher diesel prices
- Expensive imported telecom equipment
- Increased transportation costs
- Higher borrowing costs due to interest rates above 30%
Operators argue these factors have dramatically increased both capital expenditure and day-to-day operational expenses, making the existing wholesale pricing model outdated.
New Technologies Are Changing the Telecom Industry
The NCC also believes technology has evolved far beyond what existed when the previous pricing model was introduced.
Several developments have reshaped network usage, including:
- Nationwide expansion of 5G services
- Growing adoption of Artificial Intelligence (AI)
- Increased deployment of Internet of Things (IoT) devices
- Greater demand for faster and more reliable mobile connectivity
These technologies require larger investments in network infrastructure, prompting operators to seek a pricing model that better reflects current operating costs.
WhatsApp and Telegram Are Reducing Traditional Voice Revenue
Another major issue discussed during the consultation is the growing popularity of internet-based communication platforms.
Applications such as WhatsApp and Telegram now handle millions of voice and video calls daily without relying on traditional telecom interconnection systems.
This has reduced wholesale voice revenue for network operators while increasing pressure on legacy pricing models.
KPMG representatives said the study will examine how regulators in other countries handle Over-the-Top (OTT) communication platforms and whether similar approaches could be considered in Nigeria.
Telecom Operators Plan Over $1.38 Billion in Network Investment
Despite the difficult economic climate, operators say they intend to invest more than $1.38 billion this year to improve network quality across Nigeria.
The planned investments include:
- Expanding network coverage
- Increasing capacity
- Improving service quality
- Building stronger network resilience
- Supporting future digital services
Industry stakeholders warned that sustaining this level of investment will become increasingly difficult unless wholesale pricing reflects actual operating costs.
Consumers May Not See Immediate Call or Data Price Increases
One of the biggest concerns surrounding the review is whether Nigerians should expect higher call or data tariffs.
Telecom operators have sought to calm those fears.
The Association of Licensed Telecom Operators of Nigeria (ALTON) explained that Mobile Termination Rates are wholesale charges exchanged between telecom companies and are not retail prices paid directly by subscribers.
ALTON Chairman Gbenga Adebayo said the current exercise is simply a regulatory cost study designed to determine fair interconnection charges among operators.
He stressed that there has been no discussion about increasing consumer call or data tariffs as part of the ongoing review.
KPMG’s Four-Month Study Will Cover More Than Voice Calls
The NCC has given KPMG a broad mandate to modernize Nigeria’s interconnection framework.
The study will examine several key areas, including:
- Developing a cost-reflective pricing model
- Reviewing wholesale rates across 2G, 3G, 4G and 5G networks
- Assessing international termination charges
- Evaluating asymmetric pricing for smaller operators
- Studying international best practices
- Addressing grey-route traffic challenges
The findings will form the basis of the commission’s next Mobile Termination Rate determination.
Stakeholders Push for Fairer Nationwide Consultation
Industry participants also raised several concerns during the consultation process.
Technology expert Blessing Olaseni urged the NCC to avoid relying heavily on Lagos-based market data, arguing that consumer behavior, income levels, and telecom usage differ significantly across Nigeria’s regions.
Meanwhile, Israel Adebayo of Protonetwork called for organised labour unions to be included in the verification process to improve transparency and consumer representation.
Representatives from Alpha Technologies also requested that more stakeholder meetings be held virtually to reduce travel costs and improve participation.
Industry Awaits One of Nigeria’s Biggest Telecom Pricing Decisions
The review represents one of the most significant telecom regulatory exercises in recent years.
With Nigeria targeting a larger digital economy, the NCC faces the challenge of balancing three competing priorities:
- Ensuring operators recover rising operating costs
- Maintaining healthy competition among telecom providers
- Protecting consumers from unnecessary increases in communication costs
Once KPMG completes its four-month study, the commission is expected to issue a new Mobile Termination Rate framework that could shape Nigeria’s telecommunications sector for years to come.
