New Interconnect Rate: Operators yet to Reduce Tariff

More than eleven days after Nigerian Communications Commission (NCC) issued a new interconnect rate, telecommunications operators in the country have yet to reduce their tariff and appear not in a hurry to do so, Nigeria CommunicationsWeek can reveal.
Interconnect rate is the commercial settlement rate between telecommunications operators and could also serve as basis for determining tariff charged by telecom operators in the country.
The commission on December 21, 2009 issued a new interconnect rate expected which was meant to take effect from December 31, 2009, but Nigeria CommunicationsWeek investigations revealed that the operators are still charging based on the 2006 interconnect rate.
The new interconnect rate allows operators to charge on the basis of N10.12k which will enable them charge between N20 and N30 per minute for calls across networks, but operators are still charging N42 and N45 per minute based on the 2006 issued interconnect rate.
Nigeria CommunnicationsWeek gathered that the hope of early reduction in call and short message service will not be realized as operators are arguing that the interconnect rate as issued by NCC is provision of direction on how the market will go, that the decision to reduce tariff is a commercial one that is determined by the market forces, as well as individual operators. They said that reduction in interconnect rate does not translate to reduction in the tariff payable by end users.
Nigeria CommunicationsWeek investigation revealed that operators are not planning any reduction especially as they are faced with low Average Revenue Per User (ARPU) which has distorted their earning, and therefore cannot contemplate any tariff reduction early.
It was gathered that adjustment in the tariff charged by a network does not require much investment as no hard ware investment will be required; rather such network adjusting its tariff will have to carry out software modification to the new tariff plan.