How the telecoms interconnection pricing review affects 185m Nigerian subscribers

The Nigerian Communications Commission (NCC) has initiated a critical review of the industry’s interconnection prices between telecom operators. The development marks the first attempt to make adjustments to the 2018 pricing policy. 

Speaking at an NCC stakeholders’ consultation forum on Tuesday, Head of the Competition and Tariff Unit at NCC, Omotayo Mohammed, noted that the move reflects the need to align regulation and pricing with emerging trends. He noted that the exercise goes beyond a routine tariff review. 

The review forms a structured process to reassess wholesale pricing rules that govern payments between network providers for completing voice calls. For the review, the NCC will be collaborating with international consultancy agency KPMG.

Notably, mobile termination rates are regulated fees paid by one mobile network operator (MNO) to another to complete calls across networks. These prices influence competition, investment, and retail pricing.

For instance, if an MTN customer calls someone on Airtel, MTN pays Airtel a termination fee for completing the call. The fee compensates the network used by the MTN subscriber to complete the call on Airtel’s infrastructure. 

As these pricing forms part of telecom operators’ operational expenditure, recent macroeconomic conditions, inflation, exchange rate depreciation and shocks have brought some structural changes. Also, the rollout and expansion of 5G, the expansion of data-led services, and the entry of mobile virtual network operators (MVNOs) have introduced larger shifts. 

The NCC executive explained how the telecom market has changed since the last regulation in 2018. Although little amendments were made in 2022, technology, new service categories and business models now require regulatory attention.

“For regulation to remain effective in a fast-moving market, our frameworks must evolve in step with it,” he said. 

The review will be conducted under Section 108 of the Nigerian Communications Act 2003 to ensure tariffs remain cost-reflective and non-discriminatory.

The interconnection pricing review comes at a time when the NCC is revisiting the Nigerian Telecommunications Policy 2000 to reflect changes in the industry. 

Also Read: Stakeholders questions 26 years wait for telecoms policy review.

How Nigerian subscribers might be affected 

At the receiving end of tariff adjustment, especially in a highly-used industry like telecoms, consumers are always at the receiving end of the pricing review. 

The 50% telecoms tariff hike introduced in 2025 saw prices of voice calls, SMS and data increase significantly. This development places a high burden on financial ability and reduces the purchasing power of subscribers, especially for the less privileged and low-income individuals.

In recent years, an increase in operational costs is mostly transferred to the final consumer; Nigerian subscribers might likely be at the receiving end of the proposed hike in interconnection pricing.

In a simple illustration. When the cost to connect a call to a different network rises, operators typically pass these extra costs onto the subscriber. For instance, if MTN subscribers pay more to send calls to Airtel subscribers, the former will pay more as calling another network gets more expensive. 

However, on-net calls within the same network might stay the same.

In summary, the pricing adjustment will likely see telecom operators introduce different pricing strategies to calls made on the same network and those made to a different network.

How NCC and KPMG will decide the new pricing

During the stakeholders’ consultation, KPMG said the pricing determinant will be made by combining data analysis, stakeholder consultation, and international benchmarking.

Partner and Head of Tax, Wole Obayomi, explained that the process depends on industry input. He added that both bodies will examine pricing practices across wholesale and retail segments and assess whether emerging services are adequately captured under existing regulatory definitions.

“It is important that we get input from the industry in terms of potential solutions and recommendations to address the shortfalls,” he said.

The review will also assess the sustainability of prevailing tariff structures, with consideration of investment capacity, service quality, and consumer affordability. As part of the process, the NCC will require operators to submit detailed financial and operational data covering revenue, costs, profitability, market share, capital expenditure, service quality, and usage trends over multiple years.

In addition, NCC and KPMG will be vetting opinions from mobile network operators, mobile virtual network operators, international carriers, clearing houses, and interconnect exchange providers.

Comparison of Nigeria’s framework against peer markets, including South Africa and Kenya, alongside emerging economies such as Indonesia and Malaysia, is also expected to inform recommendations for the revised interconnection pricing.