Gbenga Adebayo is the managing director of Community Network Support Services Limited one of the first outsourcing company in telecommunications industry. He is also the chairman of Association of License Telecommunications Operators of Nigeria (Alton), and has contributed immensely in his over 20 years of experience in the industry. He started his career from Siemens AG Germany before joining VGC Communications, now acquired by MTN where he became the general manger in 2002. Gbenga spoke to chike onwuegbuchi and funmi ilesanmi on issues in the industry.

Sim Registration
First, operators are prepared for Sim card registration. It is a common practice all over the world for a number of reasons. It is in the interest of national security, it is in the interest of the operators themselves, it is in the interest of the Commission that all these processes are in place. What we have said to the Commission is that the process of engagement of those who will carry out the registration as indicated must be all inclusive. Operators we expect should be allowed as a first option to register their own subscribers. As a second option and for reasons of convenience, people should have the option of going to nominated centres to register. The good thing is that the NCC has said it will approve some companies to carry out the registration and it will be at no cost to the operators but at a cost to the NCC. Well, if the Commission has a budget for it that is fine but we are saying operators should be the first point of call for the registration of subscribers’ details.
Number two is that enough time should be given for the process to take place because we are talking about nearly 70 million subscriber lines. Adequate time should be given for the registration to be done.
Number three is that we need to be careful that the process of that registration if done by the second or third party which is not the operator, does not end up like the national ID card project. Reasons being that from what we have been reading, few options are considered, few identification items are considered. One is the international passport, the national identity card, identity card from the work place and all of that. We do know that the common practice all over the world is two means of identification. In general practice, if you want to do anything in any of the developed countries, mostly two common means of identification are demanded. That is, an international passport or a drivers’ license or a national identity card. The question then is that what database exist for those existing identifications? That will be a point of interest because we all know how some drivers’ licenses are obtained. The process of the current e-passport is quite detailed, you need to be there to identify yourself, have your fingerprint taken, you need to do electronic signature and all of that. Yes, the international passport is a readily acceptable means of identification. The drivers’ license to some extent, the national ID card also to some extent but the question is what is the database for the existing drivers’ license? Does it exist somewhere we can say let’s go there today and pull up the database of licenses issued by the Federal Road Safety Corps?
Number two is the national ID card, I do not know how many Nigerians hold this identification. The concern is not in that operators will loose subscribers, certainly no and we should not get it wrong. The concern is that some bottlenecks is not introduced and prevent the ease of access that we currently have. For all those who are already connected, that is ok. We will start by updating the database for those who are not registered but for those who are not connected, we must not deny them of the right of ease of access and we should avoid the situation where it goes to the public bureau and it becomes like any other form of public project that is done in the country.
This is the concern that we have and that is why we are saying to the NCC that the process must be transparent as much as possible, it must be friendly, it must be seamless and flexible. Our recommendation is that the first point of call for the registration of any subscriber on any network should be the network operator. If there be an overflow and operators are not able to call over a period of time, then we have the second option and third party arrangement that we are talking about but as a first option, we do not recommend that independent companies should be made to register subscribers; we do not subscribe to that as a first option.
How Prepared are Operators?
For the operators, it will be at no cost to subscribers to get registered. Today as a matter of necessity, operators have what is called service centres, some call it help centres, some friendship centres, some outlets and that exist as near as possible to consumers. It behoves on operators to allow enough capacities in those centres to cope with the registration. We do not see any problem in that because those outlets already exist. Across the country today, you have a number of customer service centres which by law we are mandated to have. To make those centres registration centres is a given because you do not have any dependence on anybody. If a subscriber is registered on your network, he is registered on your network. It is easy to populate the number, you are not depending on somebody to bring you details of those who have been registered on your behalf on your network. For example, you come to my centre today and get registered on my network, immediately I have your details. I have the subscriber number, I have some limited information, so I can update what I have because the information domiciles with me. If that registration was done by an independent party, they need to populate what they have done to the respective service providers.
Accessibility to Sim Registration Centres
There are many ways around it and surely operators are prepared to accommodate subscribers. First you have a number of subscribers on your network, every network operator knows how many subscribers it has on its network and knows what capacity and what number of subscribers are where because from the various switching centres, which is nearer to the people, they know how many subscribers  are where. By that they base information about what kind of registration capacity  they should provide is immediately available to them. There is also no guarantee that the public bureau or the third party registration company will open a centre nearer than 20 kilometers to subscribers. What is in the interest for them, is it in the numbers, the population or the subscribers’ number there or is it in the operators that have coverage there? If operators are required to do the registration as a first option and given the period of time, then those services will complement the process. Other than that, operators will then provide it to you as near as possible and make it as seamless as possible for you to do. If they have any difficulty and overflow then we are saying that NCC should be an option where you can go and to the nearest NCC office or nearest NCC kiosk to get registered. You know with that you have got option two and if that fails you move to the third option. But do not say as a matter of first option you only go to the registration bureau. Operators should be allowed to do it and that should be the first option, the first point of call for any subscriber on that network because it is easier, seamless, subject to minimal errors and more friendly to subscribers. We should be careful that we do not bring in processes that will hinder seamless connection because if it becomes difficult for people to subscribe to the network then it is a problem. You are saying only existing subscribers should be registered after a period of time, granted. After the 70 million subscribers have been registered, what happens? This is the question we should ask.

Interconnect Rate       
It is a pity that the announcement about the review of the interconnect rate did not come with enough explanation as to what exactly this means. Interconnect rate is not the retail rate, it is not a rate of sale to the end user. It is the cost of traffic exchange between various operators. When there is a reduction in the interconnect rate by the forces of competition, it allows operators have some form of flexible pricing. Some can price low and really low because the interconnect rate is low and some can adjust to have a uniform or average pricing regime. Interconnect rate is not the retail rate at which you sell airtime to subscribers. It is a pity that the announcement that came with the review of the interconnect rate does not come with enough explanation as to what really the interconnect rate is. This is the settlement rate between operators. You are an operator, I am an operator, if I terminate traffic on your network, this is how much I pay you. If you terminate traffic on my network, this is how much you pay me. This is what is called interconnect rate and by that because I pay high or low rates it is expected to impact on the retail rate. I think the public has not been informed enough about what exactly the interconnect rate is. It is actually to give room for some form of flexible pricing because if the interconnect rate is lower you have better head room.
Also part of what the interconnect rate does is to guide against anti-competition. For example, let me say if I interconnect traffic with you and the interconnect rate is a N100, it is expected that you will not sell calls below N100 per minute because you can not say in order for you to win the market, you will sell at a certain price. The question is, is that rate at per with the interconnect rate or lower? If it is lower than the interconnect rate then there is a problem.
The idea of interconnect rate is also to provide some form of guiding principle to prevent anti-competition and that is knowing that there is a benchmark that has been set. If it is left to run freely, one network sells at N1 and another network at N100, then the forces of capacity come into place, the forces of number come to play and there will be a lot of imbalance in the industry. So the NCC comes to say this is the rate we expect you will exchange traffic among yourselves; voice traffic and SMS traffic, that is the best benchmark that has been set, so you guys now have to agree among yourselves. What the interconnect rate does for the industry is to give some form of pricing direction and not necessarily translating into retail rate. At the end of the day because it is a driver of the point of exchange, it will impact on the retail rate but it is not to say if the interconnect rate is reduced today then the retail rate also must go down to as low as the interconnect rate the day after. We must be aware that tariff is market driven, it is driven by market forces; 10 years ago you and I know that international card was sold at N200 per minute in this country but today it is sold at less than N10. That is the pressure of the market, it is technology, it is market, volumes, numbers, it is access and others and we are gradually getting there.
Price Cap
For reasons of explanation let’s take the interconnect rate as the lower unit and the price cap as the upper limit. It means that an interconnect rate has been set which is the transaction rate between two or more operators exchanging traffic. We do expect as a business that your minimum will be this as set by the interconnect rate. Depending on the commercial agreement, for calls passing through the interconnect point, the Commission directs that we should settle at this rate at a minimum which is being considered based on expenses survey that the NCC had done. This is to prevent anti- competition, keep smaller operators in business, and allow for fair practice. Now we have given them the minimum which we expect will be the interconnect rate, the price cap is the upper limit above the interconnect rate. If the interconnect rate is set at X, the upper limit will be X+Y. It means we do expect that under no circumstance will any operator charge beyond the price cap limit because that is what has been set. The issue of Alton going to NCC to complain about multiple taxation is because we realized that in some parts of the country where local authorities are hostile to operators, where cost of access to site which is supposed to be free after we have paid for site approvals becomes extremely high; where the cost of maintaining the site is very high in some places, where you need to pay the locals to access the site, you need to pay several types of taxes on your operational vehicles and all that. In those places where they have become extremely hostile to operators, the retail rate in those places is far above the price cap, and so we are saying to the Commission, if these people do not stop giving problems to operators by stopping the issue of excessive taxation and multiplicity of taxation on operators, by the time we work out the expenses, it becomes extremely expensive to provide services in those locations at that rate. Even if it is set at the price cap, we are saying by the time we work out the numbers, the cost of providing services in those areas goes beyond the price cap. When the NCC said we have not approached the Commission to review the price cap, we also said we operators did not say we will charge beyond the price cap, we are going to charge at a maximum that is possible because no operator at any point in time charges at the maximum due to reasons of market forces in order to remain in business.