Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Nigerian Communications Commission has commenced a comprehensive review of interconnection rates for voice calls and SMS services, a move that could lead to higher charges for millions of mobile subscribers across the country and represents the first major reassessment of the sector's wholesale pricing framework in nearly a decade. The review, which was launched at a stakeholders’ consultative forum in Lagos on Tuesday, June 16, 2026, comes eight years after the current Mobile Termination Rate (MTR) regime was last set and is being driven by significant currency depreciation, soaring inflation, rising energy costs, and the rapid technological transformation of the telecommunications landscape.
The Mobile Termination Rate is the wholesale charge one network operator pays to another when a subscriber places a call that is received on a different network. It is the underlying pricing mechanism that connects every Nigerian mobile subscriber regardless of their network with every other. The current MTR stands at N3.90 per minute for generic operators and N4.70 per minute for new entrants, rates that have remained unchanged since 2018, despite one of the most turbulent economic periods in Nigeria's recent history. If the rate is eventually reviewed upward, telecom users in the country will pay more for call and SMS services.
Speaking at the stakeholders’ forum, a partner at KPMG, Wole Adenekan, who is leading the consultancy study for the NCC, explained that the review had become necessary due to major economic and technological changes that have transformed the sector since the last rate determination. He noted that significant naira devaluation, inflation, and rising energy and equipment costs have materially altered operator cost structures, making the existing interconnection framework increasingly outdated. Adenekan warned that rates set too low would fail to signal the true cost of providing termination services and could deter infrastructure investment, while cost-reflective rates would encourage efficient investment and contribute positively to economic growth. He also cautioned that inflated termination charges are ultimately borne by end-users through higher retail prices, but stressed that a mis-set MTR could enable dominant operators to foreclose smaller competitors through high termination barriers, making a cost-reflective rate essential for maintaining a level competitive playing field.
The KPMG official further observed that the commercial rollout of 5G technology, growing adoption of Artificial Intelligence and Internet of Things solutions, as well as competition from Over-the-Top (OTT) platforms such as WhatsApp and Telegram, which now capture significant voice and messaging traffic, have reduced reliance on traditional interconnection services and weakened legacy wholesale revenue streams. These factors, combined with the emergence of Mobile Virtual Network Operators (MVNOs) and shifting consumer demand, have made the 2018 pricing framework largely unrepresentative of current realities.
In her welcome address, the Head of Competition and Tariff Unit at the NCC, Omotayo Mohammed, described the review as a critical economic intervention intended to align the commission’s frameworks with the rapid pace of change in the telecoms sector. She noted that the current national interconnection rate regime was set out in the commission’s Interconnection Rate Determination of June 1, 2018, and was subsequently adjusted only through an amendment to the Mobile International Termination Rate in September 2022. Since then, she said, the Nigerian telecommunications market has undergone considerable transformation, reflected in the swift expansion of services, shifting market dynamics, the commercial deployment of 5G, and the entry of new ecosystem players such as MVNOs. Mohammed explained that the review would not only assess interconnection rates but also examine existing retail price controls and asymmetry arrangements with a view to safeguarding consumer welfare. She stressed that the exercise is being conducted under Sections 4, 96, 97, and 108 of the Nigerian Communications Act 2003, which empower the commission to promote investment, protect consumers, and ensure fair competition.
The NCC has engaged KPMG as consultant for the study, which is expected to last four months. The exercise will combine data analysis, stakeholder consultation, and international benchmarking to inform a revised pricing framework. The study will also address critical gaps in the current framework, including the treatment of Unstructured Supplementary Service Data (USSD) services, which underpin mobile financial services for millions of unbanked Nigerians, and Application-to-Person (A2P) SMS, whose commercial significance has grown substantially. The review will also establish a cost-reflective MTR framework across different technology generations (2G-5G), operator categories, and clearing house arrangements, while also reviewing the current asymmetric rate structure between established operators and new entrants.
Industry stakeholders have long argued that the outdated rate regime no longer reflects operational realities, and the review comes at a critical time for an industry that has become one of Nigeria's most important economic sectors. According to figures presented at the forum, telecommunications investment has grown from about $500 million when the sector was liberalised in 2001 to more than $75.6 billion today. As of March 2026, Nigeria had 185.7 million mobile subscribers, 153.15 million internet users, and data consumption exceeding 1.42 million terabytes, with the sector contributing 8.12 percent to the country’s gross domestic product in the fourth quarter of 2025. Despite this growth, operators continue to grapple with interest rates above 33 percent, foreign exchange volatility, inflation, rising diesel costs, expensive imported equipment, fibre cuts caused by road construction, vandalism, and multiple taxation across different states. The industry invested approximately N2.13 trillion in capital expenditure in 2025 and plans another N1.86 trillion this year, with those investments directed towards 5G expansion, rural connectivity, cybersecurity upgrades, energy infrastructure, and network resilience.
The NCC and KPMG will also benchmark Nigeria’s framework against peer markets, including South Africa and Kenya, alongside emerging economies such as Indonesia and Malaysia. 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. The commission has assured stakeholders that it would make its methodology, key assumptions, and cost model parameters available throughout the process to ensure transparency and accountability. For consumers, the review promises rates that reflect actual service costs, not outdated 2018 figures, supporting retail affordability and improved access to digital financial services. Operators stand to benefit from cost recovery reflecting capital and operational expenditure realities, while a level playing field will prevent dominant operators from exploiting inflated termination barriers.
The review has raised the possibility of higher call and SMS charges for millions of subscribers, although the NCC insists the process is aimed at ensuring tariffs remain fair, reasonable, and reflective of prevailing market realities. The outcome of the four-month study will determine whether the current rates are adjusted upward or maintained, and the final determination will shape competition, investment, and pricing across Nigeria’s telecom market for years to come.
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