Operators seek interconnect settlement scheme as indebtedness rises

Stakeholders in the telecommunications ecosystem have urged Nigerian Communications Commission (NCC) to establish Interconnect Settlement Scheme to address issues arising from interconnect indebtedness in the industry.

They cited the example of Nigeria Inter Bank Settlement System (NIBSS) established by the Central Bank of Nigeria (CBN) to reconcile inter- bank transactions.

According to them, the establishment of this scheme has become expedient in view of high indebtedness between operators; most of the debts are on account of dispute.

Engr. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that the situation in the industry is so bad that the indebtedness between parties is better not discussed.

“In essence, people are owing. That said; it is just goes to speak why sometimes there would be cold war. Because, when those meeting are held it is better we are not aware. The situation of indebtedness between parties is very worrisome. It speaks volumes about the state of the health of the entire industry.

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“Some people challenge me: if you say you are not making money why do you spend so much on billboards. Now, you have seen that those billboards are actually bank money. The situation is so bad that we are not proud to talk about the debt.

Ike Nnamani, chief executive officer, Medallion, attributed the situation to refusal of operators 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 other 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.

It would be recalled that Nigerian Communications Commission (NCC) in 2012 licensed interconnect clearing houses to provide and operate Interconnect Exchange Services to the telecommunications Operators, by so doing address the issue of indebtedness in the sector after big operators where denying smaller operators interconnection to their network as a result of debts owe to them.

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The take-off of interconnect clearing house which provided the platform for sorting out of monies due to each operator and period of settlement helped to address that indebtedness.