Buhari implements GSM tax, some calls increased by 600%

Buhari implements GSM tax, some calls increased by 600%

The President Buhari led administration had said she will increase call rates for certain trunk calls by introducing GSM tax.

That plan has gone live.

The Nigerian Communications Commission (NCC) has increased International Termination Rate (ITR) from ₦3.90/min to ₦24.40/min.

In other words, anybody calling Nigeria from a foreign location will have to pay more than 600% increase in call rates.

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The telecommunications regulator said in a statement on Saturday in Lagos, that the review of the interconnect charges was for inbound traffic.

“The Nigerian Communications Commission, on September 16, 2016 reviewed the termination rate..

“The review for international inbound traffic has increased from ₦3.90/min to ₦24.40/min.

“The interim rate will subsist pending the conclusion of the study of the Determination of Cost Based Pricing for Mobile Voice Termination Rates.

“It would be in the interest of the economy to allow international traffic termination rate to be settled through negotiation.

“There has to be commercial agreement between domestic service and international traffic carriers,” the commission said.

The News Agency of Nigeria (NAN) reports that increase in the ITR can be traced to a recommendation in a publication prepared by NCC’s Policy, Competition & Economic Analysis Department in 2015.

The recommendation was based on the premise that telecom companies and the FG might prefer higher rates.

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Their logic is that the hike in price will bring in hard currency and fund investment.

NCC also said the increased call rates will expand domestic network, fund innovation, and improve quality of service.

The department said that international termination rate had no impact on the domestic subscribers, hence, the need to review it.

The reviewed ITR may be NCC’s response to strategy to help domestic telecom companies to increase their revenue.