Abstract
Regulators across Europe and Africa agree that termination rates should be based on the forward-looking long-run incremental cost (LRIC) of termination of an efficient operator. Termination rates at cost of termination will remove economic distortions witnessed in Europe and Africa today and prepare the markets for a smooth transition to IP-based Next Generation Networks. The paper reviews the latest developments and trends for interconnection rates and shows how interconnection benchmarking can be used to set termination rates using the case of Namibia. Implementing LRIC is challenging, expensive, time consuming, and the required information is often not available in developing countries. The benchmarking methodology benchmarks termination rates, termination costs and regulatory best practice. The paper also demonstrates how annual reports and traffic volume can be used to as common sense check to compliment the benchmarking approach.
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