Nigeria : IDAs lament impact of new FX-based International call rates on services

  • 18 March 2022 / News / 439 / Fares RAHAHLIA

Nigeria : IDAs lament impact of new FX-based International call rates on services

. Claim Nigerians losing jobs, FG losing revenues
. Demand enforcement of local content in telecoms sector

International Data Access (IDA) operators have decried the impact the Nigerian Communications Commission’s (NCC) directive on International Termination Rate (ITR) is having on their operations in the country.

The IDAs, comprised largely of indigenous players in the country, claimed that the new ITR favoured the Mobile Network Operators (MNOs) more than the smaller players in the country.

Recall that on November 25, 2021, the NCC announced a new Determination of Mobile Voice International Termination Rate (ITR), which took effect from January 1, 2022 and pegged the new ITR at $0.045, which should be paid in dollars.

Sources within the IDA, who spoke with The Guardian yesterday, claimed that since the new rate took effect, their operations have slowed.

According to them, President Muhammadu Buhari made the creation of jobs for Nigerians a key focus of his administration, which led to the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector where Mr President directed that Nigerians should be encouraged to participate in the telecoms sector by reserving certain sectors for Nigerians.

The IDAs said instead of implementing the aforementioned policy of Mr President, the actions of the NCC have slowed the development of the sector and frozen Nigerians out of the telecoms market in favour of international players in the space.

They explained that Nigerian companies, which have been licensed by the NCC IDAs to transport international voice calls into Nigeria have been forced to stop operating since Jan 1, 2022, leading to loss of jobs by a directive of the commission, where they stipulated that these Nigerian companies should pay the MNOs $0.045 per minute in United States Dollars for the international telephone calls they terminate into the mobile networks in Nigeria.

On this, IDAs however, said the law states the legal tender in Nigeria is the Naira and the Central Bank of Nigeria (CBN) reaffirmed it in a 2015 Circular that, it is an illegal, criminal offence to denominate the price for goods and services in Nigeria with any currency other than Naira.

“The MNOs spurred on by this directive by NCC that is against the laws of the Federal Republic of Nigeria have issued a rate of $0.053 rate per minute to overseas based telecoms operators that enables them to send international telephone calls to them directly at a lower rate than they have offered, which is $0.062 per minute to the Nigerian based licensed IDAs.

“This action by the MNOs is against the law, is discriminatory and does not ensure fair competition in the Nigerian telecom industry. This is further compounded by the fact that overseas-based telecom operators do not pay Value Added Tax (VAT) of 7.5 per cent and the Nigerian based International Data Access Operators must pay the higher per minute rates mandated by the MNOs plus 7.5 per cent VAT.”

The indigenous players stressed that by this directive from NCC, Nigerian based IDAs have been locked out of the market because of the higher rate per minute issued to them by the Mobile MNOs, plus the mandatory 7.5 per cent VAT and sundry bank charges incurred from the receipt and transfer of foreign currency within Nigeria.

They stressed that this collectively make it impossible for these Nigerian based international telecoms operators to price their termination services in a way they will attract patronage from overseas telecoms operators since the rates issued by the MNOs to the overseas operators is already lower at $0.053 than that issued to the Nigerian international telecoms operators at $0.062 per minute.

“This action by the NCC has also led to significant loss of VAT revenues that should accrue to the Federal Government because these overseas telecom operators, which connect to the MNOs directly do not pay 7.5 per cent VAT.”

The IDAs called on the Federal Government to intervene urgently and ease the suffering of Nigerians and ensure that its policy directives in respect to local content in the Nigerian telecoms sector are duly implemented to create jobs for Nigeria and for the growth of the economy.

On the matter, which they said is in court, the IDAs claimed that they have jointly sent a letter to the NCC, “but the commission is yet to do anything about it.”

They however appealed that NCC should ensure fair competition and encourage the participation of Nigerians in the telecoms industry; that based on the aforementioned, IDAs should have a discounted ITR rate structure from the $0.045 and that consistent with CBN regulations, the IDAs should pay the MNOs and other telecoms operators ITR in Naira.


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