Exclusive interview with Medallion Communications CEO: How delay in payment of interconnect charges is undermining QoS in Nigeria

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Ikechukwu Nnamani,Medallion Communications, Interconnect
Ikechukwu Nnamani, CEO of Medallion Communications Limited

 

The chief executive officer of Medallion Communications, MR. IKECHUKWU NNAMANI shares in this exclusive interview with ITPulse’s MARTIN EKPEKE why the ICT industry needs interconnect settlement scheme to address the challenges of delay in payment of interconnect charges.  He also shares his experiences why companies should host their servers locally.

What has Medallion Communications been doing since the beginning of this year? What are the plans for the remaining part of the year?

We have been focused on providing efficient services for the industry and growing our subscriber base in terms of clients. We are also making sure we provide the necessary infrastructure that will allow customers to operate in a more cost effective way. So, in the last one year, we have seen our customer base increased, especially from new licensees who are patronizing our services. To us, this has been a good situation. We are trying to expand to additional cities; it is our hope, that will be done before the year end so we can offer similar type benefits in Lagos to at least additional five cities. We are currently trying to deploy infrastructure to Port-Harcourt, Ibadan, Kano and then improve our existing infrastructure in Lagos and Abuja. We hope that by the time we conclude the expansion plan, the industry will be better off. We are promoting convergence, being a carrier neutral and ensuring that new operators are able to get into the market as quickly as possible. That is our goal.

 

There are still cases of Interconnect Indebtedness in the industry. As a player in that sector, what are the issues and what are the ways forward?

We have to separate traditional interconnect which is where operators directly exchange traffic among themselves versus when they come through an operator like us which an Interconnect clearing house. If you have two operators directly exchanging traffic, you could have disagreements on the call records. Unfortunately, in such cases, there’s always almost no solution to resolve the issue because each operator has their own record which they can insist is accurate. But if the calls are channeled through an Interconnect exchange point, you have a third party independent record that can be used for verification because the sum of what the operator is sending to any carrier is the sum of the totality of what is received from the interconnect partner less of whatever that’s dropped on the switch for whatever reason. So, you can’t have a case where if you aggregate the traffic every carrier sent to you, and it is 100 million and you ended up passing 150 million to your terminating partner, then the question will be where is the additional 50 million coming from? So as a result of that the independent interconnect operator is in a better position to resolve any dispute that may arise as a result of call record differentials  because you are an independent operator generating independent records that could sum up the totality of what is happening across the various networks interconnected. So, from a reconciliatory point of view, we don’t really have a problem with any operator, because we can always sum up everything. The traditional problem operators have, we don’t experience as an interconnect operator. Yes! There could be issues with payment, usually because there is no settlement scheme in the industry. Everybody pays you when they are able, but we are trying to do something about how it can be resolved or how a better settlement scheme can be developed for the industry as soon as possible.

Don’t you think the delay in payment can undermine quality of network in the industry?

Yes, it does. The biggest problem we have seen in terms of quality of service is when operators denying access to their network and dropping calls because of commercial reasons; when that happens, the subscriber is the one that suffers. As far as the subscriber is concerned, he has already paid his bill before he starts making the call, so for whatever reason the operator is blocking their circuit or dropping calls, the subscriber is the one suffering. We have always been of the opinion that the last resort should be dropping of calls. There should be other ways to resolve it. It is a challenge, some of the operator defaults are simply dropping any call, but after sometime it becomes very difficult to say if they are dropping that call because of commercial issues or purely because of anti-competitive tendency that they don’t want the other operator to gain market shares. Sometimes, it’s difficult to balance why they do such act, but the official reasons they give some of the time is we got a commercial dispute going on. This is where the regulator has to come in strong and firm to look at some of these issues.

What does the building of Data Centre mean for the Nigerian economy?  Why is it that some companies do not host their data locally, could it be that Data Centre owners in Nigeria are charging more than their foreign counterparts or it has to do with security?

The issue is multifaceted. But the biggest challenge I have seen which is unfortunate is a situation we initially promoted the .ng domain name from NIRA as a way of moving the country forward and achieve some specify goals. Many companies have signed for the domain name but what we still see is that though a company may have their website with the .ng domain name, the server is hosted outside the country. When you ask them, they will tell you it is cheaper to host outside than within the country. What they don’t realize is that it may appear cheaper purely from the standpoint of view that those are established market; they are markets that have been built over several years and the subscriber base there is much higher. For instance, you have an ISP that has over a million subscribers; such an ISP can afford to give discounts in terms of bandwidth and other stuffs. But in the Nigerian market where the subscriber base is still growing, you can’t afford to give that level of discount without running below your operating cost, in which case you may be able to remain in business. So, what we are advocating for is for stakeholders to critically address this. I also think that the government will have to step in with some form of subventions to help bridge the cost differential between what operators can conveniently charge and what the market can support. These are areas that should be addressed as soon as possible because we can’t continue losing the fund that keeps going to foreign hosted companies while good infrastructure exist within the country. Even at Medallion, all the international companies putting infrastructure in Nigeria are all hosted with us. So, for them to have confidence to host their infrastructure within Medallion is an indication that we are offering global best practice service here in line with what they expect in any part of the world. So, I don’t think it is a problem with infrastructure or security, but a pricing issue that is making people not to host locally.

What are your expectations of the new federal government for the ICT industry? Which of the policies do you think should be sustained and improved on?

Good steps that have been made must be sustained. For instance the former minister of Communication Technology was extremely huge on promoting broadband. We can’t run away from that, it is bound to happen. So, it will be unfair to abandon those initiatives and start something entirely different because there is a change in government. I will advise the current government to look at a project like the broadband initiative and ensure that it is implemented. Of course quality of service is still suffering; the truth of the matter is that if an effort is put toward ensuring there is a higher quality of service in the industry, it will definitely require investment. If people do not have the required resources to make the investment, what can government do to assist? Because it does appears the operators are saying from what we can afford, this is the best quality we can give. So, there is a need for government to look at quality of service. From what I know as an industry player, a lot of the infrastructure that the telecom operators are running on have challenges, and some of these challenges go beyond the telecom operators. We still have challenges with the right of way, vandalism and power supply. If these challenges are worked on, quality of service will be higher.

Do you think with the licensing of Infracos, Nigeria can meet the 30 percent broadband target by 2018? It appears ATCON is already doubting the prospect.

ATCON is probably doubting the prospect, maybe because the Infracos have not come out clearly with their business plan and how they want to achieve what they want to achieve.  I am sure if they come out with a clear idea of what they want to do, they will create a better visibility into the prospect and maybe such doubts will no longer be there. The concept of the Infracos was met to be something that would promote broadband infrastructure and make people have access to it, which is a good thing. The rate of penetration and where they cover is a different ball game altogether. For me, I have a challenge from the beginning of the Infracos licensing, when one of the top priorities was Lagos. Lagos is probably the most connected cities in the country. There are a lot of underserved regions that I thought should have been the top priority. The NCC has more information than I do, so they know why they considered Lagos as one of the first two. And they try to balance it by giving the second license to an underserved region. I know Lagos is definitely a well connected city in terms of infrastructure that is on ground.

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