Interconnect debts threaten telecoms
By Kokumo Goodie, Lagos, Nigeria
The huge interconnect debt of N20 billion that operators owe one another may rubbish the gains of the telecoms revolution if the issue is not given the requisite attention, industry stakeholders have warned.
Specifically, the bulk of the debts are owed by operators in the ailing code division multiple access (CDMA) and they are indebted to their global system for mobile (GSM) communication counterparts.
Regulator of the industry, the Nigerian Communications Commission (NCC), has warned that if the trend is not reversed, it is capable of eroding the gains the industry has reaped over the last ten decades.
Executive Vice Chairman and CEO of the NCC, Dr Eugene Juwah, said interconnection debt has become as a major source of worry because of its potential to destabilise and rubbish the success recorded in the industry. “The issue of interconnection indebtedness is peculiar to Nigeria as it has been observed that this problem does not exist in other jurisdisctions,” Juwah said.
He lamented that operators take advantage of the provisions of the guidelines on procedure for granting of approval to disconnect telecommunications operators by deliberately refusing to promptly discharge their financial obligations towards their interconnect partners.
Speaking in Lagos yesterday at a forum to chat a way out of the debt crisis bedeviling the industry, Mrs Abimbola Akeredolu, partner, Banwo and Ighodalo, a firm of legal practitioners, said the debt has hit N20 billion, adding that 60 per cent of these debts are disputed as many operators alleged that the figures are inflated, blaming the development to their competitors’ faulty billing systems.
Akeredolu said the large volume of the interconnect debts in the telecoms sector is also linked to sharp difference in revenue sharing ratios between GSM operators and other operators in the industry like fixed wireless operators and CDMA.
The telecoms sector legal expert who spoke at a Regulatory Forum on the High Incidence of Interconnection Indebtedness in the Nigerian Telecommunications Industry organised by the NCC at Lagos Sheraton Hotels and Towers on the topic: “What is the solution to interconnection indebtedness in Nigeria,” added that mediation and arbitration should be explored before a network is disconnected.
“The feeling in the industry is that if the situation persists whereby GSM companies are better favoured than the fixed and wireless operators, such a situation will continue to lead to interconnectivity debt, or breakage.
“In practice, the revenue sharing ratio between mobile and fixed network is 14/6 and 12/8 depending on which network is terminating or originating the call. Fixed and landline operators are asking that parity be introduced with growing argument that all network face equal challenges,” she said.
Confirming the N20 billion interconnect debt, Globacom’s Regulatory Affairs Manager, Mr. Tunde Aremu, said it is true that operators are owing one another the amount, warning that i the issue required an urgent intervention from the NCC, while is counterpart at MTN Nigeria, Mrs. Oyeronke Oyetunde said the huge interconnect debt remained an issue plaguing the industry and required urgent attention.
Engr. Steven Bello, a former executive commissioner in the NCC said disputes arising over the debts owed causes the debts to accumulate, warning that unless operators do their home works, the issue will continue to be a challenge and introduce inefficiency into the telecoms sector.
Bello suggested that the regulator should either introduce pre-paid billing system or constitute an “interconnection clearing house” similar to what the Central Bank of Nigeria (CBN) introduced for the banking industry.
Other telecoms analysts and legal luminary, who spoke at the forum, agreed that mediation and arbitration should be explored before a network is disconnected.
They agreed that NCC has a major role to play in ensuring the stability of the industry.