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NCC’s New ITR To Reposition Telecom Operators Revenue Margin

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Executive Vice Chairman (EVC) and Chief Executive Officer (CEO) of NCC, Prof. Umar Garba Danbatta

YEMISI IZUORA at Oriental News, in this analysis looks at current efforts by the Nigerian Communications Commission, NCC, determination to provide opportunities for telecom industry operators to maximise their revenue, and their customers’ marginal utility rate with the review of the mobile international termination rate (ITR).

Nigeria’s Telecom industry remains on a steady growth trajectory as risen Investment in Mobile internet networks support a shift towards data driven growth models.

In the IT sector government effort to boost broad band penetration had began to gather momentum, but industry watchers have observed that the country would likely face a number of challenges in achieving it’s ambitious midterm expansion target owing to issues in deploying new fibre-optic infrastructure.

Also, rapid mobile growth entails a series of new regulatory challenges as the Nigerian Communications Commission, NCC moves to implement reforms aimed at improving consumer protection, national security and equitable distribution of Telecoms economic benefits.

The regulator has been committed in regulatory oversight functions and has developed a number of policy initiatives aimed at improving industry activities.

Precisely, in September 2020, the Commission launched a cost-based study to set the new pricing regime for mobile international termination rate (ITR) for inbound international voice calls in the country.

Prof. Umar Danbatta, Executive Vice Chairman of NCC.

The ITR is the rate paid to local operators by international operators to terminate calls in Nigeria.

As part of the process for the rate determination, the Commission organised a virtual stakeholder engagement forum with relevant industry stakeholders to intimate them with the ongoing cost-based study and the need to cooperate with Messer’s Payday Advance and Support Services Limited, the consultants engaged to carry out the study.

The Executive Vice Chairman of NCC, Prof. Umar Danbatta, notably informed the industry of the imperative of the study.

Danbatta, said the study followed various implementation constraints arising from contending industry and market dynamics that met previous efforts at finding an optimum price for the termination of international voice services in Nigeria.

Through the new ITR pricing, the Commission will be able to balance the competing objectives of economic efficiency and allow operators the latitude to generate reasonable revenue.

In its view with the new ITR pricing, the NCC will be able to balance the competing objectives of economic efficiency and enabling operators to generate significant revenue.

Oriental News Nigeria, recalls that in 2013, the NCC had issued a determination that stated that mobile termination rate (MTR) rates remain the same irrespective of where the call originated.

But unfortunately this was largely misconstrued by operators at that time to mean that ITR should bear the same rate as the MTR.

This however led to operators ignoring the international cost portion, where ITRs were agreed at MTR level without a positive residual to cover the costs of the international leg for local operators.

“As a result of this, the ITRs continued to decline, in line with the MTR glide path and as the ITR was set in Naira, it suffered a further downward slide in dollar terms following the currency devaluation.

Ironically, the Nigerian operators paid the international operators in dollars to deliver international calls which created an imbalance of payments as the ITR in Nigeria declined,”Danbatta said.

Due to this, the EVC commented that the pŕofitability of and commercial results of Nigerian operators were negatively affected by placing Nigeria’s ITR below that of most countries with which it exchanges the most calls, thus subjecting Nigerian operators as perpetual net payers.

“This has, therefore, led to undue pressure on the nation’s foreign reserves, which continue to get depleted by associated net transfers to foreign operators on account of this lop-sidedness.

Hence the need for Nigeria, with volatile currencies, to regulate the ITR to prevent or mitigate the imbalance of payments with international operators,” Danbatta stressed.

According to the EVC, in cases where ITR isn’t regulated properly, there is a tendency for a significant effect on a market like Nigeria having major supply-side challenges and associated socio-economic implications.

Experts equally, argues that economically efficient ITRs, set at cost base levels would maximise economic benefit, but NCC’s choice will depend on the weight placed on the competing objectives of economic efficiency and allowing operators to generate revenues.

“So, setting a rate substantially above the MTR has resulted in a number of repercussions. One of such is the consumer shift to online channels as calls are increasingly made through Internet Protocol (IP)-based technologies such as Skype and WhatsApp because of high international call prices. To this end, an economically-efficient ITR that is cost-based will maximise economic benefits to all stakeholders,” said the EVC

The NCC during the period organised an engagement forum for stakeholders to share perspectives and insights enlisting their collective support in relation to the inputs and requirements towards the determination of a mutually- realistic ITR in Nigeria.

The project indeed commenced on Tuesday, March 10, 2020, with a meeting but was slowed down by the COVID-19 pandemic challenges, which necessitated the need to explore emerging channels of engagement in moving forward and ensuring the completion of the project.

The Commission in determination to achieve its objective had continuously provided a conducive environment and level-playing ground for the effective interplay of factors that would meep up market development and growth, while ensuring the provision of qualitative and efficient telecommunications regulatory services for the benefit of consumers and licensees.

IRT Now Ready To Roll

With the conclusion of the study by Messrs Payday Advance and Support Services Limited, the NCC is on the path of unveiling the outcome for a robust and acceptable ITR regime.

To gain acceptance, the NCC, has against convened an industry-wide forum asking for input on the study on cost-based pricing of Mobile International Termination Rate, ITR.

The process aimed to ensure healthy competition on traffic handling for voice services between local and international operators in Nigeria.

Along the line of its engagement process the NCC, on Tuesday June 8, held a virtual Stakeholder meeting with Management Staff of the Commission physically in attendance during which it formally presented the findings from the study, which commenced in March, 2020.

The meeting solicited further perspectives, insights and other input on the findings towards a mutually realistic termination rate for international voice traffic in Nigeria.

Speaking at the forum, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, said the cost-based study became imperative, following previous efforts at finding an optimum price for the termination of international voice services that will be beneficial to all relevant industry stakeholders.

Danbatta said that the “overriding need for regulatory options and intervention in relation to the international termination rate in the voice market segment is predicated on some intractable challenges, most common with economies with severe macroeconomic volatility such as ours.”

Going down memory lane with respect to MTR determination in the Nigeria’s telecom industry, the EVC said, in 2013, the Commission issued a Determination stating that mobile Termination Rates (MTR) are the same irrespective of where the call originated. He, however, stated that this was misconstrued by operators at that time to mean that ITR should be the same rate as the MTR, consequently ignoring the international cost portion.

“Arising from these is the persistent fact that Nigeria’s ITR is below that of most countries with which it makes and receives the most calls, making Nigerian operators perpetual net payers. The obvious implication of this is seen in the attendant undue pressure on the nation’s foreign reserves, which continue to get depleted by associated net transfers to foreign operators on account of this lopsidedness,” Danbatta explained.

Also, a PwC study corroborated NCC’s position that Nigeria’s ITR was below average for countries (in Africa) with similar GDP, population, number of operators and technological readiness.

The report also noted that following the October 2006 intervention the ITR is still below average for these countries.

Danbatta further stated that regulating the ITR is imperative for developing countries, such as Nigeria, with volatile currencies in order to prevent or mitigate the imbalance of payments with international operators. He also said the Commission was faced with the challenge of arriving at a rate that will balance the competing objectives of economic efficiency while, at the same time, allowing operators the latitude to generate reasonable revenues.

He informed the forum however, that “where ITR is not regulated, it tends to converge to the MTR and for a market like Nigeria with major supply side challenges, the socio-economic implications and attendant backlash can only be imagined.”

In her comments, the Director, Policy, Competition and Economic Analysis, NCC, Yetunde Akinloye, corroborated the EVC, noting that the study was intended to compliment and consolidate the initial work done by the Commission which had also culminated in the MTR Determination published in June 2018.

According to her, the ITR previously determined was based on actual benchmarking with countries of similar characteristics to Nigeria, but the findings from that study were faced by major national macroeconomic management challenges, ultimately pointing to the need for an ITR that is cost-based, consistent with the MTR.

Meanwhile, Danbatta has reiterated the NCC’s commitment “to continuously provide a conducive environment and level playing field for the effective interplay of factors that would engender sustained market development and growth, while ensuring the provision of qualitative and efficient telecommunication services to the consumers”.

The Nigerian Communications Commission (NCC) has concluded the process of determining the cost-based price of Mobile International Termination Rate (ITR) to ensure healthy competition on traffic handling for voice services between local and international operators in Nigeria.

However, PwC recommend the NCC to set an ITR floor at an economically efficient level based on costs (including the costs of international transmission) and still leave room for operators to negotiate with international carriers the total compensation for the international termination:

This would enable Nigerian operators to maximise their revenue, and their customers’ marginal utility rate and also enable NCC to minimise grey market, as it would remove cost-driven incentive for the activity

The approach rationale is to ensure Nigerian operators are compensated for international transmission and enable them to strike the right balance between higher revenue per minute and higher risk of grey traffic (illegal bypass).

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Danbatta Applauds Pantami’s Appointment As WISIS Chair

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NCC Releases Final Information Memorandum For Auction Of 3.5GHZ, Compile Responses To Stakeholders

…Hon. Minister has been playing in driving fundamental digital economy policies – Danbatta

Olushola Okunlade Writes


The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, has congratulated the Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, on his appointment as the Chairman of the 2022 World Summit on Information Society (WSIS) Forum by the International Telecommunication Union (ITU).

Danbatta described the choice of the Minister as chair of the Forum as a worthy recognition of Nigeria’s leadership role in the global digital economy ecosystem, noting that Nigeria has continued to hold a front-row seat in the promotion of information and communication technology (ICT) as a driving force for national development since the assumption of office of the Minister.

“On behalf of the Board, Management, and Staff of the Nigerian Communications Commission, I want to express our profound delight and congratulations to the Honourable Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, on his well-deserved appointment by the International Telecommunication Union (ITU) to chair this year’s WSIS Forum”, Danbatta stated.

“The appointment did not surprise us at NCC, given the important role the Hon. Minister has been playing in driving fundamental digital economy policies, being implemented by agencies under his supervision, in order to boost the diversification policy of the Federal Government,” the EVC said.

“We are, therefore, happy to associate with the Minister on this feat, as it means greater recognition for Nigeria. The appointment is an indication that the world has continued to take notice of the giant strides of Nigeria’s digital economy under the supervision of the Minister.

The NCC will continue to do everything within its regulatory mandate to further support the Federal Government’s drive for ubiquitous, affordable, and accessible digital services across all nooks and crannies of the country,” Danbatta said.

Following consultations with various stakeholders, the ITU recently notified the Minister via a letter, of his appointment as the 2022 WSIS Chairman.

The ITU is orgainsing the WSIS 2022 Forum in collaboration with other agencies with the United Nations with a focus on “ICTs for Well-Being, Inclusion, and Resilience: WSIS Cooperation for Accelerating Progress on the SDGs”.

As has been noted elsewhere, the appointment of Prof. Pantami has given Nigeria, and indeed, the African continent, the unique role of coordinating the activities of the WSIS in its 20th year, following the WSIS Phase I meeting which took place in 2003.

The WSIS Forum 2022, which will be attended by several high-level stakeholders, including Cabinet Ministers from ITU countries, will serve as a key platform to discuss the role of ICTs as a means to bolster the implementation of the Sustainable Development Goals targets. The discourse will take place in the context of the mechanism for follow-up and review of the implementation of the 2030 Agenda for Sustainable Development (UNGA Resolution A/70/1).

The WSIS Forum also provides an opportunity to track the achievements of WSIS Action Lines in collaboration with the UN Agencies involved and provides information and analysis on the implementation of WSIS Action Lines since 2005. The Forum aims at enhancing cooperation, partnership, innovation, exchange of experiences, and good practices in ICTs for sustainable development across the world.

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Hackers Can Unlock, Steal Your Vehicles, NCC Alerts Nigerians

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NCC Issues Final Letters Of Licence Awards To 5G Spectrum Winners

…Warns of vulnerability to new Android trojan apps

Olushola Okunlade Writes

The Nigerian Communications Commission (NCC) wishes to alert telecom consumers and members of the public on an ongoing cyber-vulnerability that allows a nearby hacker to unlock vehicles, start their engines wirelessly, and make away with the cars.

The fact that car remotes are categorized as short-range devices that make use of radiofrequency (RF) to lock and unlock cars informed the need for the Commission to alert the general public of this emergent danger, where hackers take advantage to unlock and start a compromised car.

According to the latest advisory released by the Computer Security Incident Response Team (CSIRT), the Cybersecurity Centre for the telecom sector established by the NCC, the vulnerability is a Man-in-the-Middle (MitM) attack or, more specifically, a replay attack in which an attacker intercepts the RF signals normally sent from a remote key fob to the car, manipulates these signals, and re-sends them later to unlock the car at will.

With this latest type of cyber-attack, it is also possible to manipulate the captured commands and re-transmit them to achieve a different outcome altogether. “Multiple researchers disclosed a vulnerability, which is said to be used by a nearby attacker to unlock some Honda and Acura car models and start their engines wirelessly. The attack consists of a threat actor capturing the radio frequency (RF) signals sent from your key fob to the car and resending these signals to take control of your car’s remote keyless entry system,” the advisory stated emphatically.

However, the NCC-CSIRT, in the advisory, has offered some precautionary measures or solutions that can be adopted by car owners to prevent falling victim to the attack.

According to the cyber-alert unit of the Commission, “When affected, the only mitigation is to reset your key fob at the dealership. Besides, the affected car manufacturer may provide a security mechanism that generates fresh codes for each authentication request, this makes it difficult for an attacker to ‘replay’ the codes thereafter. Additionally, vulnerable car users should store their key fobs in signal-blocking ’Faraday pouches’ when not in use.”
Importantly, car owners in the stated categories are advised to choose Passive Keyless Entry (PKE) as opposed to Remote Keyless Entry (RKE), which would make it harder for an attacker to read the signal due to the fact that criminals would need to be at close proximity to carry out their nefarious acts.

The PKE is an automotive security system that operates automatically when the user is in proximity to the vehicle, unlocking the door on approach or when the door handle is pulled, and also locking it when the user walks away or touches the car on exit. The RKE system, on the other hand, represents the standard solution for conveniently locking and unlocking a vehicle’s doors and luggage compartment by remote control.

Additionally, in a related advisory, the NCC, based on another detection by CSIRT, wishes to inform the general public about the resurgence of Joker Trojan-Infected Android Apps on the Google Play Store. This arose due to the activities of criminals who intentionally download legitimate apps from the Play Store, modify them by embedding the Trojan malware, and then upload the app back to the Play Store with a new name.

The malicious payload is only activated once the apps go live on the Play Store, which enables the apps to scale through Google’s strict evaluation process. Once installed, these apps request permissions that once granted, enable the apps to have access to critical functions such as text messages and notifications.

As a consequence, a compromised device will subscribe unwitting users to premium services, billing them for services that do not exist. A device like this can also be used to commit Short Messaging Service (SMS) fraud while the owner is unaware.

It can click on online ads automatically and even use SMS One Time passwords (OTPs) to secretly approve payments. Without checking bank statements, the user will be unaware that he or she has subscribed to an online service. Other actions, such as stealing text messages, contacts, and other device data, are also possible.

To avoid falling victim to the manipulation of hackers deploying Joker Trojan-Infected Android Apps, Android users have been advised to avoid downloading unnecessary apps or installing apps from unofficial sources. The NCC also wishes to advise telecom consumers to ensure that apps installed from the Google Play Store are heavily scrutinized by reading reviews, assessing the developers, perusing the terms of use, and only granting the necessary permissions.

Conclusively, the NCC recommends that unauthorized transactions be checked against any installed app. Indeed, any apps not in use should be deleted while users are also advised to ensure that a device is always patched and updated to the latest software.

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NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector

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NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector

Olushola Okunlade Writes

The Nigerian Communications Commission (NCC) and the Federal Inland Revenue Service (FIRS) have taken their collaboration a notch further by setting up a Joint Committee of senior and management staff of the two agencies towards the implementation of inter-agency strategies for enhancing national revenues in the telecommunications sector.

The NCC’s Executive Commissioner, Stakeholder Management, Adeleke Adewolu, inaugurated the 17-member committee on behalf of the Commission’s Executive Vice Chairman, Prof. Umar Danbatta, and the Executive Chairman of the FIRS, Mr. Muhammad Nami, at the NCC’s Board Room in Abuja on Tuesday, May 10, 2022.

NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector
Group Picture of FIRS staff and NCC staff.
NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector
Mrs. Ben-Obi; Mr. Irri; Barr Adewolu; and Mr. Nwokenneya.

The inauguration of the committee, comprising six officials of NCC and eleven officials of FIRS, was carried out with senior officials of NCC and those of the tax agency led by its Coordinating Director for Compliance Support Group, Dr. Dick Irri, who represented the FIRS’ Executive Chairman, Muhammad Nami at the event.

While inaugurating the Committee on behalf of the heads of the two agencies, Adewolu stated that the terms of reference (ToR) of the Committee include: reviewing the Memorandum of Understanding (MoU) signed between the NCC and the FIRS on June 9, 2020; and carry out inter-agency interaction on the implementation of the NCC’s Revenue Assurance System (RAS), to ensure that it incorporates the needs of FIRS to the extent that RAS can remain the sole interface with telecom service providers’ networks vis-à-vis the Tax Authority’s information needs from the telecoms sector.

Given the Committee’s composition and the extensive experience and commitment of its members – which had informed their selection by the agencies – Adewolu stated that the management of NCC and the FIRS expected no less than an excellent output from the Committee, tasking them to work together harmoniously and in the overall national interest.

Also in his comments, Dr. Dick Irri, who led the FIRS delegation to the inauguration, advised the Committee to take the assignments very seriously. “I would like to task you to take this assignment as a national matter as we expect the two agencies to work in harmony, collaborate effectively, and have a warm handshake that will make this synergy between the two agencies a great example of collaboration between Federal Government agencies towards enhancing fiscal governance in Nigeria,” he said.

The decision to set up the Committee was one of the major outcomes of the meeting between the FIRS and the NCC on March 8, 2022, organized at the instance of the Honourable Minister of Communications and Digital Economy, Prof. Isa Ali Pantami, to discuss the request by the FIRS for data and documents from the telecoms industry for enhancing national revenues from the sector.

NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector
Left-Right: Dr. Dick Irri, Coordinating Director, Compliance Support Group, FIRS; and Barr Adeleke Adewolu, Executive Commissioner Stakeholder Management, Nigerian Communications Commission, NCC.
NCC, FIRS Inaugurate Joint Committee To Boost National Revenues In Telecoms Sector
Left-Right: Mrs. Chiaka Ben-Obi, Group Lead, Digital and Innovation Support Group, FIRS; Irri; Adewolu; Mrs. Faozat Ogunniyi, Group Lead, Enforcement Support Group, FIRS; Mr. Ephraim Nwokenneya, Director, Compliance Monitoring and Enforcement, NCC; and Dr. Ikechukwu Adinde, Director, Public Affairs, NCC.

The inauguration is a significant achievement, as it deepens the strategic collaboration between the two government agencies in the pursuit of their statutory objectives. It also vindicates the emphasis placed on achieving mutually-sustainable relationships with relevant stakeholders as detailed in both the NCC’s Strategic Management Plan (SMP), 2020-2024, and the Strategic Vision (Implementation) Plan (SVP 2020-2025) as well as FIRS’ strategic framework.

The activities of the NCC and the FIRS are acknowledged as pivotal to the achievement of sustainable revenue and growth projections of the Federal Government. In this regard, the telecoms sector has sustained a relatively high contribution to Gross Domestic Product (GDP) over the years – ending the fourth quarter of 2021 at 12.6 per cent.

Besides, the FIRS recently acknowledged that some telecom licensees contribute a significantly high percentage of total national tax revenue. It is expected that the Joint Committee will enable both organizations to further optimize revenues for the Federal Government from the telecoms, digital economy, and adjacent sectors of the economy.

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