Telecoms operators’ interconnection debts hit N20b

THE nation’s telecommunications sector is currently faced with over N20 billion interconnection debts.

Many of the operators of the Code Division Multiple Access (CDMA) technology are indebted to operators of the Global System for Mobile communications (GSM) and arguments persist over how much operators owe one another and means of determining the interconnection indebtedness.

According to an analyst, CDMA operators and fixed line operators owe a larger part of the debts affecting the growth of the telecoms industry, by so doing complicating the financial status of the sector.

Interconnection is the term for the process by which calls from one network are terminated on another network. It is the basis by which telecommunications subscribers are enabled to call other subscribers, regardless of the networks in which they are domiciled. Subscribers may also send Short Message Service, Multimedia Message Service and other value-added services seamlessly across different networks because of operator-operator interconnectivity.

The debt figure was released Thursday in Lagos at the Nigerian Communications Commission (NCC)-organised “Regulatory forum on the high incidence of interconnection indebtedness in the Nigerian telecommunications industry.”

Speaking on the topic “What is the solution to interconnection indebtedness in Nigeria,” Partner, Banwo and Ighodalo, Mrs. Abimbola Akeredolu said interconnection indebtedness in the Nigerian telecommunications sector was put at about N20 billion, stressing that approximately 60 per cent of these debts were disputed as many operators alleged that the figures were inflated while they ascribed the blame to their competitors’ faulty billing systems.

Akeredolu said the large volume of the interconnection debts in the Nigerian telecommunications sector was often linked to a sharp difference in revenue sharing ratios between mobile operators and other operators such as landline network owners and fixed wireless operators.

“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 termination or originating the call. Fixed and landline operators are asking that parity be introduced with growing argument that all networks face equal challenges,” she stated.

Akeredolu called for the strengthening of NCC regulations to eliminate fraudulent amendments, ensure operators deposit a certain sum in a bank or provide a bank guarantee and establish an asset management company similar to the Asset Management Corporation of Nigeria (AMCON) to acquire highly indebted operators, run them and turn them around.

Verifying the N20 billion interconnection debt, Globacom’s Regulatory Affairs Manager, Tunde Aremu, said operators owed one another the amount, stressing that the issue of interconnection required urgent intervention from the NCC.

Aremu said: “Globacom, MTN Nigeria and Airtel Nigeria are being owed N20 billion for interconnection indebtedness.”

His counterpart at MTN Nigeria, Mrs. Oyeronke Oyetunde, corroborated the claim, saying huge interconnection debts running into billions of naira were plaguing the sector.

She also urged the regulator to intervene before the issue got out of hand.

Other telecoms analysts and legal luminaries, who spoke at the forum, agreed that mediation and arbitration should be explored before a network was disconnected as well as migration of traffic and debt settlement through an interconnect clearing exchange.

They agreed that the NCC had a major role to play in ensuring the stability of the industry.

Executive Vice Chairman, NCC, Dr. Eugene Juwah, who spoke earlier, said operators were taking 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.

According to him, the issue of interconnection indebtedness has emerged as a major source of conflict and challenge, which has the potential of destabilising the success recorded in the industry, stressing, “the issue of interconnection indebtedness is peculiar to Nigeria as it has been observed that this problem does not exist in other jurisdictions.”

He said on November 30, 2012, NCC approved new guidelines shortening the process for granting approval for disconnection.

Former Executive Commissioner of NCC, Stephen Bello, said that operators should be made to comply with the regulations, decisions and policies of the commission.

A Senior Advocate of Nigeria (SAN) and former Lagos Attorney General and partner, Ajumogobia and Okeke, Olasupo Shasore, called for the setting up of mediation/arbitration, a hybrid alternative dispute resolution mechanism with minimum intervention in the dispute by the operators. He said it had proven to be very effective. He, however, said disconnection of a network should be the last resort as it may lead to the death of the network.

Shasore said there was the need for an effective hybrid dispute resolution mechanism, stressing that this had proven to be very effective in dispute resolution.

Currently, Nigerian Telecommunications Limited (NITEL) owes GSM communications operators N10 billion. Last year, GSM operators moved against ZOOMmobile after securing permission from NCC to disconnect the CDMA mobile operator for owing billions in interconnect dues.