WhatsApp, inflation, 5G force NCC to rewrite Nigeria’s telecom 8-year-old pricing model
Nigeria’s telecommunications regulator has begun rewriting one of the industry’s most important pricing frameworks as inflation, naira depreciation, 5G investments and the growing dominance of WhatsApp and other internet-based platforms reshape the economics of mobile communications.
Nigeria’s telecommunications regulator has begun rewriting one of the industry’s most important pricing frameworks as inflation, naira depreciation, 5G investments and the growing dominance of WhatsApp and other internet-based platforms reshape the economics of mobile communications.
This is even as the Nigerian Communications Commission (NCC) on Tuesday launched a comprehensive review of Mobile Termination Rates (MTR), the wholesale charges operators pay one another to complete calls across networks.
The rates, fixed at N3.90 per minute for established operators and N4.70 for new entrants since 2018, have remained unchanged despite dramatic shifts in operating costs and consumer behaviour.
The review could become one of the most consequential regulatory exercises in Nigeria’s telecom sector in nearly a decade because it sits at the intersection of competition, investment, network expansion and consumer pricing.
“The foundation of wholesale interconnection affects every stakeholder in this room,” said Omotayo Mohammed, head of competition and tariff at the NCC, during a stakeholder engagement forum in Lagos.
According to her, misaligned termination rates can allow dominant operators to squeeze smaller rivals, discourage infrastructure investments and eventually lead to higher costs for consumers.
The review comes at a time when telecom operators are facing mounting financial pressure. Since the last MTR determination in 2018, the naira has lost a significant portion of its value, inflation has surged, diesel prices have risen sharply and network equipment costs have increased due to foreign exchange pressures.
At the same time, operators are investing heavily in next-generation technologies, including 5G networks, artificial intelligence-enabled services and Internet of Things (IoT) platforms, all of which require substantial capital expenditure.
These changes have rendered many assumptions in the 2018 cost model outdated, prompting regulators to seek a more accurate reflection of today’s operating environment.
Beyond rising costs, the telecom industry is also confronting a structural shift in how Nigerians communicate.
Over-the-Top (OTT) platforms such as WhatsApp and Telegram increasingly handle voice calls and messaging services that traditionally generated revenue for telecom operators. As consumers migrate toward internet-based communications, operators are seeing changes in traffic patterns that affect interconnection revenues and network utilisation.
The development is forcing regulators to rethink how wholesale telecom pricing should work in a digital economy where traditional voice services are no longer the primary communication channel.
Mohammed said the review would not be limited to mobile termination rates alone.
The NCC has engaged KPMG to undertake the study and stakeholder consultation process over the next four months. The exercise will also examine International Termination Rates (ITR), Mobile Virtual Network Operator (MVNO) pricing frameworks, USSD services and Application-to-Person (A2P) SMS pricing structures.
Industry experts believe the inclusion of MVNO pricing is particularly significant as Nigeria seeks to deepen competition and expand service offerings through virtual network operators that rely on existing infrastructure owned by larger telecom companies.
The review will also assess whether the current asymmetric pricing structure that offers higher termination rates to new entrants remains appropriate under present market conditions.
Another area of focus is international call termination. By reviewing International Termination Rates, the NCC hopes to address persistent grey-route traffic issues that deprive operators and government of legitimate revenue.
Mohammed said the exercise is being conducted under provisions of the Nigerian Communications Act 2003, which require the commission to promote fair competition, encourage investment and protect consumers.
She noted that the study would produce a cost-reflective framework that accounts for different network technologies, operator categories and clearing-house arrangements.
“The consultancy adopts an evidence-based and consultative approach,” she said, adding that stakeholders would have opportunities to review assumptions and validate findings before final decisions are made.
For consumers, the review may not immediately translate into higher or lower call rates. However, industry executives say the outcome could influence future retail pricing strategies, network investment decisions and service quality improvements.
A properly calibrated MTR framework can improve market efficiency by ensuring operators recover legitimate costs while maintaining affordable services for subscribers.
It can also strengthen investor confidence at a time when telecom operators are seeking billions of naira in capital to expand 4G and 5G networks, improve rural connectivity and support Nigeria’s growing digital economy.
In her closing remarks, Nnenna Ukoha, director of public affairs at the NCC, described the exercise as one of the commission’s most important public engagements because of its impact across the telecommunications value chain.
Ukoha said Mobile Termination Rates remain central to pricing structures, competition, service quality and overall consumer experience.
According to her, discussions during the consultation highlighted both the complexity and importance of the determination process and reinforced the need for broad stakeholder participation.
“We are particularly encouraged by the rapt attention, intellectual rigour and keen interest demonstrated by participants throughout today’s session,” Ukoha said.
She urged operators and industry stakeholders to continue submitting data and feedback as the consultation process progresses.
The review signals that Nigeria’s telecom regulator is no longer simply adjusting a pricing parameter. It is attempting to redesign an interconnection framework built for a voice-centric telecom market and adapt it to a digital economy increasingly shaped by mobile broadband, fintech services, artificial intelligence applications and internet-based communications.
The outcome could determine how billions of naira are distributed across the telecom ecosystem and influence the pace of investment in the networks that underpin Nigeria’s digital future.
