The Chairman, Nigerian Communications Commission NCC Sen. Olabiyi Durojaiye has expressed concerns over the huge interconnect debt among network carriers in the country which verified reports puts at ₦60 billion. Warning that this poses a potential danger to the success the industry has witnessed in recent years.
What is interconnect debt
This is a cost that is incurred by network operators during the termination of services rendered to it by another operator in the industry.
Interconnection enables a user to experience the smoothness of a connected network, hence, a subscriber does not need to know whether the person at the other end of the network subscribes to another network operator.
Why this high rate of indebtedness
According to a former Acting Executive Vice Chairman, Stephen Bello, the high rate of indebtedness in the telecoms industry can be attributed to
- Poor corporate management
- Diversion of telecoms revenue to other private investment in other sectors
- Poorly drafted interconnection agreement between operators.
While noting that this interconnection indebtedness will slow down government’s socio-economic agenda on the expansion of networks spread and quality of service for subscribers.
In his words:
“This interconnect indebtedness has the effect of introducing inefficiency into the telecoms industry and the entire national economy, unfair treatment of interconnecting partners will prevent subscribers from having values for their money”
While operators in the industry have continued to trade blames over the debt incurred with some alleging the inflation of figures which they attribute to the faulty billing system of their competitor others lament that the debt are owned by clearing houses.
The clearing house receives, validates and accounts for telephone bills for several service provider. They are particularly important for international billing as they convert different data record format that are used by service providers and convert for the currency exchange rate.
Way Forward
The regulatory agency, NCC has recently launched the Corporate Governance Code which is expected to address non compliance with the Telecommunication Networks Interconnection Regulations and other unethical practice by operators in the industry. NCC must ensure adequate monitoring of operators in the industry in line with this new Governance Code.
President, Association of Telecommunications Companies of Nigeria, ATCON, Mr. Olusola Teniola believes the commission must ensure that each operator puts in place an automated robust system that can reconcile the interconnect debt situation. The regulator needs to force operators to pass traffic through interconnect clearing houses for accountability in the billing system.