Eight years after Nigeria’s current mobile termination rates were set, the telecoms regulator is returning to one of the industry’s most important wholesale pricing questions — how to balance fair competition, investor confidence, retail affordability and the cost realities of a fast-changing digital economy.

The Nigerian Communications Commission has begun a comprehensive review of Mobile Termination Rates, eight years after the current rates were introduced in 2018, in a move that could reshape wholesale pricing, operator economics and competition dynamics across Nigeria’s telecoms industry.

Mobile Termination Rates, often called MTRs, are the wholesale charges one telecoms operator pays another to complete a call on its network. Put simply, when a subscriber on one network calls someone on another network, the originating operator pays the receiving network for terminating that call.

Though largely invisible to ordinary subscribers, MTRs sit at the heart of telecoms economics. They influence interconnection costs, competition between large and smaller operators, retail call pricing, investment incentives and, increasingly, how legacy voice revenues adjust to a digital world dominated by data, apps and platform-based communication.

The Head of Competition and Tariff at the NCC, Mrs Omotayo Mohammed, said the review became necessary because the current rates no longer reflect the industry’s operating and economic realities.

The existing rates, introduced in 2018, stand at ₦3.90 per minute for generic operators and ₦4.70 per minute for new entrants. They have remained unchanged despite sharp shifts in Nigeria’s macroeconomic environment, including naira depreciation, inflation, higher energy costs and increased network investment requirements.

Mohammed warned that misaligned termination rates could distort competition, weaken smaller operators, discourage infrastructure investment and ultimately affect consumers through inflated retail prices or reduced service quality.

That is the essence of the issue: if MTRs are too high, smaller operators may struggle to compete against dominant networks. If they are too low, operators may struggle to recover legitimate network costs. The regulator’s task is therefore not merely to reduce or increase rates, but to set a framework that is fair, cost-reflective and future-ready.

The Director of Public Affairs at the NCC, Mrs Nnenna Ukoha noted that the forum is one of the commission’s most important public-facing engagements because of its impact on the entire telecommunications value chain.

Ukoha said Mobile Termination Rates remained central to pricing structures, competition, service quality and consumer experience, making broad stakeholder participation essential to the determination process.

“We are particularly encouraged by the rapt attention, intellectual rigour and keen interest demonstrated by participants throughout today’s session.

“This active engagement reflects not only the relevance of the issues discussed but also a shared commitment to the sustainable growth and development of Nigeria’s telecommunications sector,” she said.

Why the Review Matters Now

Nigeria’s telecoms industry has changed substantially since 2018.

Voice remains important, but the structure of communication has shifted. Millions of Nigerians increasingly use WhatsApp, Telegram and other over-the-top platforms for voice and messaging. These services ride on data networks and reduce reliance on traditional interconnection traffic.

At the same time, operators are investing in 4G, 5G, fibre backhaul, cloud systems, AI-enabled services, Internet of Things applications and digital financial services infrastructure. These networks cost more to build and maintain, especially in an economy where energy remains one of the biggest operating expenses.

Diesel, power backup, foreign exchange, tower maintenance, equipment imports and security-related costs have all altered the telecoms cost structure.

The industry is no longer just about calls and SMS. It is now the backbone of banking, fintech, e-commerce, media streaming, logistics, education, identity management, public services and enterprise productivity.

That is why a wholesale pricing review must be handled with unusual care. Telecoms pricing now affects far more than telecoms companies. It touches the entire digital economy.

KPMG Engagement and the Scope of the Review

The NCC has engaged KPMG to support the consultancy and stakeholder engagement process, which is expected to run for four months.

According to Mohammed, the review will examine not only MTRs, but also related pricing issues across USSD services, Application-to-Person SMS, International Termination Rates, clearing house arrangements and the emerging framework for Mobile Virtual Network Operators.

This wider scope is important.

USSD remains central to digital financial inclusion, especially for bank customers and low-data users. A2P SMS is increasingly important for banking alerts, authentication codes, e-commerce notifications, public communication and enterprise messaging. International termination rates matter because of grey-route traffic — where calls are improperly routed to avoid approved charges.

The MVNO question is also crucial. Nigeria is trying to deepen competition by allowing virtual operators to offer services without owning full network infrastructure. But MVNOs cannot thrive without a clear wholesale pricing framework.

In effect, the NCC review is not just about call termination. It is about the rules of participation in the next phase of Nigeria’s digital communications market.

Competition: The Dominance Question

MTRs are competition-sensitive because large operators usually benefit from scale, traffic volume and network effects. Smaller operators and new entrants can face higher relative costs when their subscribers make calls to larger networks.

This is why regulators sometimes allow asymmetric rates, where new entrants receive slightly higher termination rates to help them compete and recover costs during their early growth phase.

Nigeria’s current structure reflects that principle, with new entrants receiving ₦4.70 per minute compared with ₦3.90 for generic operators.

The question now is whether that asymmetry remains appropriate, whether it should be adjusted, and how it should apply in a market where voice traffic is no longer the only centre of value.

If handled well, the review could strengthen competition and improve consumer choice. If mishandled, it could deepen market concentration or weaken incentives for new players.

Market Implications

The MTR review could influence several layers of the telecoms market.

For mobile operators, it may affect wholesale revenues, interconnection expenses and pricing models.

For consumers, the long-term effect could be seen in call tariffs, bundled products, service quality and access to affordable digital services.

For fintechs and banks, USSD pricing and A2P SMS frameworks matter because they affect transaction costs, authentication systems and customer access.

For enterprise customers, clearer pricing around messaging and interconnection could improve reliability and planning.

For MVNOs, a transparent wholesale structure could determine whether the sector becomes commercially viable or remains largely theoretical.

The review therefore sits at the intersection of telecoms, banking, digital identity, mobile money, enterprise communication and consumer inclusion.

Policy Implications

The NCC is conducting the review under its statutory mandate to promote investment, protect consumers and ensure fair competition.

That balance is essential.

Nigeria needs affordable telecoms services, but it also needs financially healthy operators capable of investing in network quality. Consumers want lower prices, but they also want coverage, speed, uptime and reliability.

The regulator must therefore avoid populist pricing and embrace evidence-based regulation.

A cost-reflective MTR framework should consider inflation, exchange-rate realities, capital expenditure, energy costs, network technology, traffic patterns, competitive structure and consumer affordability.

It should also be transparent. Mohammed’s assurance that methodology, assumptions and model parameters will be available for stakeholder review is important because telecoms pricing disputes can easily become political or adversarial if parties do not trust the process.

Brand Implications

For the NCC, this review is a brand moment.

The commission has long positioned itself as one of Nigeria’s more technically mature regulators. A transparent, consultative and evidence-driven MTR review would reinforce its reputation as a regulator that listens, models and balances competing interests.

For telecoms operators, the review is also a brand test. Operators must show that their arguments are grounded in data, not merely margin protection. Consumers are already sensitive to tariff increases, service quality concerns and data-cost pressures. Any wholesale-pricing debate must therefore be communicated carefully.

For Nigeria’s digital economy brand, the outcome matters. A predictable telecoms regulatory environment signals seriousness to investors, technology firms, fintechs and infrastructure providers.

Investor Relevance

Telecoms investors will watch the review closely because interconnection pricing affects margins, cash flow, competitive positioning and long-term network investment.

Investors in towers, fibre, data centres, fintech, MVNOs and enterprise technology will also pay attention because telecoms wholesale economics influence the broader digital infrastructure market.

A fair and cost-reflective framework could strengthen confidence and support further investment in 5G, broadband expansion and digital services.

But if the process appears opaque, politically influenced or disconnected from cost realities, it may weaken investor confidence.

Telecoms is capital-intensive. Capital follows regulatory predictability.

BRANDECONOMY Insight

Telecoms Pricing Is Now National Productivity Policy

The NCC’s review of Mobile Termination Rates is more than a technical exercise. It is a national productivity issue.

Telecoms has become the nervous system of the Nigerian economy. Banking depends on it. Fintech rides on it. E-commerce uses it. Schools, hospitals, media platforms, government services and small businesses all rely on it.

That means wholesale telecoms pricing must be designed with strategic discipline.

If rates are too high, competition suffers and consumers may pay more. If rates are too low, operators may under-invest and service quality may weaken. If USSD and A2P SMS pricing is poorly structured, digital financial inclusion could suffer. If MVNO pricing is unclear, new competition may struggle before it begins.

The NCC must therefore deliver a framework that is fair, transparent, data-driven and future-facing.

The 2018 model belongs to another market reality. Nigeria has since experienced currency shocks, inflation, changing traffic behaviour, OTT disruption, 5G deployment and rising digital dependence.

The regulator now has a rare opportunity to reset the economics of interconnection for the next decade.

The goal should be clear: protect consumers, keep networks investable, promote fair competition and support Nigeria’s digital economy.

That is the balance that matters.