Prof. Umar Danbatta, executive vice chairman, Nigerian Communications Commission, NCC, has urged telecommunications operators in the country to review their business model to ensure a healthy business operation.
Danbatta stated this while reacting to a question asked on issue of indebtedness in the industry at the just concluded National Telecom Dialogue organised by Association of Telecommunications Companies of Nigeria (ATCON) held in Abuja.
According to him, “there is about N70billion interconnect debt in the industry. Operators are not paying each other but the most worrisome part of it is that subscribers payment for services rendered are pre-paid, yet operators are not paying themselves. Where is the money going? This calls for review of their business model if we are to address this problem of indebtedness in the industry as we can’t continue in this way”.
He noted that “NCC has been protecting smaller operators but they must have to pay their interconnect debts. We have grated them waivers for payment of ground rents among other efforts to ensure that small operators survive”.
The issue of indebtedness in the industry has been a concern lingering for a while as stakeholders have suggested ways to address it, among them includes one Ike Nnamani, group managing director, Medallion communications which is operates interconnect clearing network said that Association Telecommunications Companies of Nigeria (ATCON) presented to Nigerian Communications Commission (NCC) on implementation of an interconnect settlement scheme which will address the persistent issue of disconnection of operators trunk circuit as a result of interconnect debt.
“Although NCC said it is reviewing the proposal, in the face of issues like the one between MTN and Glo it is Glo subscribers that are losing and we run the risk of changing the balance in the telecommunications sector in a negative way, it can also fuel anti-competitive measure to frustrate smaller operators in the market.
“I know that its takes NCC time to grant approval for any operator to disconnect the other, but there is nothing on ground to prevent interconnection debts from pilling up,” he noted.
He cited example of Nigeria Inter Bank Settlement System (NIBSS) established by the Central Bank of Nigeria to reconcile inter- bank transactions which has been working.
Nnamani also decried the situation where operators have refused to make use of interconnect clearing houses as mandated by NCC.
“When indebtedness among operators rose to an alarming level some years back, NCC licensed interconnect clearing houses to ensure transparency in the billing process and mandated every operator to rout at least 10 percent of their traffic through the clearing platform, but, today none of the operators are anywhere close to 10 percent.
“Some are doing five percent while some are less than that, this means that more than 90 percent of traffic in the industry is exchanged directly among them which gave rise to high indebtedness as we witness today,” he said.
He explained that exchanging traffic directly among operators does not guarantee transparent billing as well gives rise to anti competition practices as we see it today.