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New Interconnect Rate: Providing Opportunities for CDMA Operators

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The new interconnect rate just issued by Nigerian Communications Commission (NCC) has been greeted with fixed feelings. Some sections of the industry stakeholders led by Deolu Ogunbanjo, president, National Association of Telecommunications Subscribers of Nigeria (Natcoms) are arguing that the new rate will not achieve its desired objective going by what it term ‘price cap’ directive given by the NCC which is yet to be reviewed.
‘Price cap’ is the tariff limit that any telecommunications operator offering voice service is eligible to charge in the industry. According to Natcoms president, the price cap has been pegged at N50 per minute, which means that operators are at liberty to charge within N50 per minute.
Ogunbanjo insists that unless this directive is reversed, the hope of operators reducing call tariff to reflect the new interconnect rate will not be realized. This argument has been shared by many others who have decried the inability of operators to reduce both voice and short message service (SMS).
However, other section of the industry comprising mostly of operators maintained that ‘Price cap’ has little or nothing in determining call tariff and that it is partly interconnect rate as well as individual operators decision. They explained interconnect rate as the commercial settlement rate between telecommunications operators and could also serve as basis for determining tariff charged by telecom operators in the country.
According to the group, the interconnect rate as issued by NCC is provision of direction on how the market will go, and that the decision to reduce tariff is a commercial one that is determined by the market forces, as well as individual operators. They added that reduction in interconnect rate does not translate to reduction in the tariff payable by end users.
In whichever way it is viewed, the underlining fact is that operators are at liberty to adjust their tariff plan based on the new interconnect rate.
NCC noted that a benchmark of Nigerian operators’ SMS retail tariffs reveals huge differences between On-Net and Off-Net tariffs. The tariff plans of some Nigerian operators give Off-Net tariffs that are three times as high as the On-Net tariffs. Such differences are usually used by operators to promote closed user groups, i.e. to force subscribers to follow friends or family to the network operator they use, since On-Net tariffs are much cheaper. This lock-in effect the commission said is intensified in countries with low income levels since the affordability of services is an important issue for the majority of the population.
International benchmarks show furthermore that the main users of SMS services are young subscribers between ages 12 and 24 years. This user group is characterised by much lower income than the average levels, and therefore more attracted to the benefits related to the lock-in effect.
The case of CDMA operators
Contrary to what obtains in most countries such as United States of America and India, Code Division Multiple Access (CDMA) operators in the country’s telecommunications space are lagging behind in terms of subscribers. This could be attributed to the fact that, it is expensive to deploy the technology compared to Global System for Mobile communications (GSM) as well as regulatory hindrance such as limited mobility which prevented roaming service for CDMA operators outside their jurisdiction they have secured license. These were some of the reasons their rolling out plan was not as fast as GSM operators.
In all of these, the story of CDMA operators have not being too bad as there has been a boomlet among CDMA-based fixed-wireless operators in Nigeria — Starcomms, Multi-Links, Reliance Telecommunications (ZOOMmobile) and most recently Visafone. These players had their regionally based licenses upgraded to unified access service licenses (UASLs) in 2006, allowing them to extend their reach beyond traditional geographical limits and compete in both the fixed and mobile markets. It’s therefore not surprising that these operators have gladly extended their services into mobile markets and now pose a threat to the three established GSM-based operators, MTN, Zain and Globacom, both in terms of chipping into their revenues and snatching GSM subscribers.
The number of mobile CDMA subscriptions in Nigeria grew from just 380,000 in 2007 to more than 7m at year-end 2009 — that’s from 1% to 10.6% of all mobile lines in just one year. The top three GSM mobile operators are expected to keep their grip on the mobile market because the total number of GSM subscribers also increased by about 56% in the same period, but they will face increasing competition from CDMA operators. This means the trio will generate 64% of Nigeria’s telecom revenue in 2014, down from their 74% share in 2008.
The advantage that the CDMA operators have in Nigeria is that they are able to charge lower on-net and off-net call charges than GSM operators. Also, CDMA operators have fewer subscribers and less strain on their networks, which means they can provide better service quality. They also provide very cheap and partly subsidized mobile handsets that will appeal to the low-end market, especially those who have never been able to afford a handset. For instance, Visafone launched services in March 2008 and started selling handsets at ridiculously low prices, starting at just N2000. The operator’s customer base jumped from just 60,000 subscribers in March to 2.25m at the end of 2008, with the majority purchasing handsets for the first time.
It is believed that the key to success for CDMA operators and the reason why they are becoming more popular in Nigeria is their strategy to penetrate into rural, underserved communities and to provide affordable, effective services that appeal to the less fortunate among Nigeria’s 146m inhabitants. It is on this basis that the new interconnect rate provides an opportunity for CDMA operators to further penetrate into the market by reducing their call tariff for both on-net and off-net tariffs.
In 2008, mobile CDMA service accounted for an estimated 6.3% of the market’s $8.6bn in total revenue, and we expect this share to grow to 11% by 2013. We also expect that, barring major changes in market conditions, CDMA operators will grab 20% of mobile subscriptions by 2014. Our Country Intelligence Report on Nigeria provides more comprehensive insight into the country’s communications market.
A survey carried out in Nigeria’s capital, Abuja has indicated a growing demand in the GSM dominated market for CDMA based mobile phones. The survey, carried out by ‘The Tide’ cited the regular problems with network congestion on the GSM networks in the city for the increased interest in CDMA operators. Currently there are four CDMA operators in the city, Multi-links, Visafone, Starcomms and Reltel.
The respondents hinged their optimism on clarity of communication and affordability of CDMA phones, when compared with GSM phones.
"For instance, with as little as N1,500, you can get a phone and a line on the CDMA network, while for a GSM line, a subscriber may need to pay at least twice that amount," claimed respondents to the survey.
Mr. Wakili Shehu, a telecommunications consultant said that "the technology also provides the capacity for quicker transmission of data and Internet, unlike the GSM which has limited capacity," but he warned that the use of the CDMA technology in the country was also fraught with challenges, such as limited coverage of cities and towns, unlike the GSM.
In spite of the progress recorded so far by CDMA operators, there are still a lot of grounds to cover if they are to compete with the GSM operators especially as NCC is planning to introduce Number Portability.
According to subscriber’s statistics released by NCC for the month of October last year, mobile CDMA figure stood at 7,291,714, fixed wireless subscribers which are also from the table CDMA is put at 1,366,269. This is far from 63,250,377 subscribers of GSM operators.
The low subscriber base of CDMA operators has raised serious concern as this has really affected their profitability. This situation demands a radical approach for them to match GSM operators or move closer to them.
What can CDMA Operators Do
The new interconnect rate which took effect from December 31, 2009 allows operators to exchange traffic for mobile (voice) termination by new entrants in Nigeria irrespective of the originating network at N10.12. The interconnection rate for mobile (voice) termination provided by other operators in Nigeria irrespective of the originating network is now N8.20 from December 31, 2009.
NCC also put the interconnection rate for SMS termination provided by new entrants in Nigeria irrespective of the originating network as follows: N1.94 from December 31, 2009; The interconnection rate for SMS termination provided by other operators in Nigeria irrespective of the originating network which took effect from the 31st of December 2009 is now N1.02.
The opportunity provided by this scenario is that CDMA operators can now irrespective of what GSM operators are charging now reduce their call tariff to N15 and N25. By so doing, they are most likely in view of the nature of Nigeria subscribers most of who would prefer operators whose tariff is cheaper, recorded tremendous growth in their subscriber base.

 


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NCC Begins Review of Nigeria Telecoms Policy after 26 Years

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Nigerian Communications Commission (NCC) has commenced a review of Nigeria’s 26-year-old telecommunications policy, saying the current framework no longer reflects the realities of the country’s fast-changing digital economy.

NCC  Begins Review of Nigeria Telecoms Policy after 26 Years

Aminu Maida, EVC, NCC

Speaking  at the national telecommunications policy review workshop in Lagos, Hadiza Usman, special adviser to the president on policy and coordination, said the review had become necessary because Nigeria’s economy, technology ecosystem, and security environment had changed significantly since the national telecommunications policy was introduced in 2000.

“A policy that was fit for purpose in the year 2000 cannot simply be assumed to remain adequate in 2026,” Usman said.

She said telecommunications had evolved beyond voice connectivity and now supports financial technology, digital commerce, education, healthcare, agriculture, innovation, public service delivery, and national security operations.

“Telecommunications is no longer a standalone sector. It is an enabling platform for almost every other sector of national life,” she said.

Usman warned that outdated or poorly coordinated policies weaken implementation, discourage investment, create institutional overlaps, and reduce measurable national impact.

According to her, the revised framework must address broadband penetration, affordability of digital access, quality of service, infrastructure resilience, consumer protection, and inclusion of underserved communities.

“The revised policy must not become another document that sits on shelves. It must become a working instrument,” she said.

The presidential aide also identified fibre cuts, vandalism, multiple taxation, delayed approvals, right-of-way bottlenecks, insecurity, and energy constraints as major obstacles slowing telecommunications infrastructure expansion across the country.

She said resolving the challenges would require coordinated action among federal institutions, state governments, local authorities, regulators, operators, investors, and infrastructure providers.

Earlier, Aminu Maida, executive vice-chairman (EVC) of the NCC, said the telecommunications industry had outgrown the assumptions behind the national telecommunications policy 2000.

Maida said the policy was introduced at a time when Nigeria’s focus was on liberalisation, competition, increased access, and private sector participation in telecommunications services.

According to the EVC, the industry has since evolved into a broader digital ecosystem supporting banking, commerce, education, cloud services, entertainment, digital identity systems, and government operations.

“This is no longer a narrow telecommunications conversation. It is no longer just one sector within the economy; it is a productivity infrastructure for the entire economy,” he said.

Maida added that emerging technologies such as 5G, artificial intelligence, satellite broadband, cloud infrastructure, Internet of Things (IoT), and cybersecurity regulation have further transformed the sector.

He said the review process would also address structural issues including rural connectivity gaps, multiple taxation, vandalism, high energy costs, fibre cuts, and delays in obtaining permits.

“The commission aims to develop a modern policy framework capable of supporting innovation, protecting consumers, improving quality of experience, strengthening investment, and advancing Nigeria’s digital economy ambitions,” Maida said.

The EVC said the workshop was organised to assess implementation of the existing policy, identify gaps, engage stakeholders, and develop recommendations for a new national telecommunications policy 2026.

 

 


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MTN to Turn its African Tower Network Into a Distributed AI Compute Grid

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MTN Group plans to convert its African tower estate into a distributed AI compute fabric, installing open GPU infrastructure at base-station sites so that the same hardware can run both the cellular network and edge AI inference workloads.

MTN to Turn its African Tower Network Into a Distributed AI Compute Grid

The plan was set out by Charles Molapisi, group chief technology and information officer, MTN, at an event hosted by law firm Bowmans in Johannesburg recently— the company’s most detailed explanation yet of how it intends to position itself as the infrastructure layer of Africa’s AI economy.

Every cellular tower today has a baseband unit at its base — single-purpose hardware that exists only to drive the radio access network.

Molapisi said MTN will replace these with open GPU configurations capable of running the radio plus AI inference, in what the company has described as a “distributed AI grid.”

A key pay-off, he argued, is latency. AI workloads that today must be hauled back to a central data centre could instead be processed at or near the tower.

He gave the example of children playing PlayStation on an estate served by a nearby tower: with edge compute installed, the workload could be served locally rather than backhauled to a distant data centre and returned, freeing capacity and cutting round-trip time.

The edge layer sits alongside the centralized half of MTN’s AI infrastructure plan.

The group confirmed in its 2025 financial results in March that it will build two new AI-enabled data centres — one in South Africa and one in Nigeria.

Molapisi described an MTN AI strategy spanning a relatively full stack — procuring silicon, building data centres, running its own cloud platforms, curating models and co-developing applications with partners. The company is also building terrestrial fibre across multiple African markets, including some where it has no GSM licence, to plug what Molapisi called the continent’s missing “rails.”

The investments sit inside MTN’s Ambition 2030 strategy, which reorganized the group around three platforms: connectivity, fintech and digital infrastructure. The tower-to-inference push is the most concrete articulation yet of a thesis MTN has been laying out for more than a year — including an investment in March in U.S. AI-native networking start-up ORAN Development Company alongside NVIDIA, Cisco, Nokia, AT&T and Telecom Italia.

At the time, Mazen Mroué, CEO, Digital Infrastructure CEO, framed the move around “sovereign AI” — the principle that African countries should host AI compute locally rather than relying on offshore infrastructure.

Molapisi said MTN is developing the edge AI grid alongside technology partners, with the ambition for MTN to become “the biggest distributor of edge inference in the continent.”

The strategic case rests on Molapisi’s wider argument that Africa risks repeating its commodity history in the AI era.

With about 1% of global computing power on the continent today, he said, Africa stands to “export raw data” the way it has long exported raw minerals — only to import the intelligence built from it at a premium.

Molapisi conceded that chip generations are turning over quickly enough — NVIDIA’s Hopper to Blackwell inside two years, for example — that procurement decisions made today can be obsolete by deployment. He said MTN is being deliberate about its chip mix and the balance between training and inference silicon, “because if you get that wrong, you’ll get the economics terribly wrong.”


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MTN Nigeria Boosts Public Revenue with N878.7bn Tax Remittance

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As Nigeria intensifies efforts to expand non-oil revenue and improve tax collection under its fiscal reform agenda, corporate tax contributions from major private-sector operators are becoming increasingly critical to government financing.

MTN Nigeria Boosts Public Revenue with N878.7bn Tax Remittance

MTN Nigeria

Supporting that drive, MTN Nigeria paid NGN878.7 billion in taxes, levies and duties to federal and state authorities in the 2025 financial year, representing a 15% increase from the previous year, according to the company’s just-released 2025 Sustainability Report.

The trajectory tells its own story: the company paid NGN543.9 billion in taxes and levies in 2023, before that figure climbed to NGN764 billion in 2024 a cumulative rise of roughly 62% over two years, tracking the company’s recovery from deep forex-driven losses to a profit after tax of NGN1.11 trillion in 2025, with total revenue surging 54.8% to NGN5.20 trillion and operating profit climbing to NGN2.08 trillion from NGN778.2 billion.

The NGN878.7 billion remitted to government in 2025 covered corporation tax, value-added tax, spectrum fees, import duties, NCC levies and contributions under the Rural and Urban Terrestrial Infrastructure (RUTI) tax credit scheme, an initiative with deep roots in MTN Nigeria’s public-private partnership playbook.

The company has long embraced such mechanisms: it participated in the Road Infrastructure Tax Credit Scheme, under which it committed NGN202.8 billion towards reconstructing the 110-kilometre Enugu-Onitsha Expressway.

In 2025, the RUTI scheme reached 50% completion after securing approval for an additional NGN23 billion tax credit aimed at expanding fibre and telecoms infrastructure in underserved communities, a model the company argues supports infrastructure development without requiring direct public expenditure.

The report also highlighted the company’s growing domestic economic footprint, with 62% of procurement spending directed to Nigerian suppliers in 2025.

This was up from 59.6% a year earlier. MTN said the policy aligns with the Federal Government’s local-content objectives and supports sectors including civil construction, logistics, software services and power infrastructure.

The company’s operational footprint expanded to 2,087 active base stations nationwide, while active mobile subscribers stood at 85.4 million by the third quarter of 2025. Active data users rose to 51.1 million, supported by smartphone penetration of 65.1%.

During the year, MTN Nigeria renewed its 800MHz spectrum licence for another ten years to December 2034 and secured regulatory approval to lease additional spectrum from T2 Mobile, formerly 9Mobile, across 17 states and the Federal Capital Territory.


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