Why Nigeria’s N165Bn Interconnect debts challenge persist

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Interconnection, Telecom, Medallion Communications

 

BY Martin Ekpeke

The absence of an Interconnect settlement scheme, lack of monitoring mechanism for traffic exchange by operators and the fact that there is no service fee for clearinghouse services, have been identified as parts of the reason there is the rising interconnect debts of N165 billion in Nigeria’s telecom space. 

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This was the conclusion of a telecommunications expert, Mr. Ikechukwu Nnamani, while making a presentation at the 2018 NIGERIA ICT IMPACT CEO FORUM, in Lagos last week.

According to Nnamani, a situation where there is no Interconnect settlement scheme that will clearly define how traffic can be interconnected, the telecom operators who are presently exchangng 95 percent traffic peer-to-peer will continue to decide what goes to the ClearingHouses.

Nnamani, who should know because he anchors Medallion Communications Limited, one of the Interconnect ClearingHouses in Nigeria, argues that leaving 95 percent of interconnect traffic to the operators has undermined the essence of the Interconnect Exchange license, which were issued by the Nigerian Communications Commission 15 years. This, he believes, has amounted to the increase in Interconnect debt/dispute, network congestion and poor quality of service.

He, however, advocated that the patronage of an independent Clearing House by the telecom operators is the standard approach that would ultimately address the persistent interconnect debt imbroglio in the Nigeria’s telecom space.

For him, an Interconnect Clearing House brings network simplicity, optimization of the number of Interconnect links and saving in network deployment and maintenance costs, which many industry experts have seen as the issues leading to the Interconnect debts.

“For me, the best way out of the Interconnect indebtedness is for the industry to have a structured settlement scheme that will coerce the telecom operators to pass their traffic through a licensed Interconnect ClearingHouse,” he said.

He stated that the ClearingHouses bring in efficient handling of new and traditional interconnects, independent data for call reconciliations, timely settlement of interconnect charges, fewer disputes and interconnect agreements and most importantly more points of interconnect.

Even with the meager 5 percent of traffic been independently handled by the ClearingHouses, there is a visible timeline of two weeks for new network interconnection, unlike in the past when it takes months and some cases years.

The independent ClearingHouses have also created a more transparent interconnect relationship and ultimately bringing down the cost of establishing and maintaining interconnection in the country.

The Nigerian Communications Commission (NCC), had in 2003/2004 established the Interconnect Exchange license in Nigeria. The aims and objectives of the license include addressing the persistent poor quality of service to the subscribers, provide adequate interconnect capacity to the industry, resolve the problem of anti-competitive practices in the interconnect relationship amongst telecom  operators in Nigeria and enhance the growth of telecommunications services to the rural and underserved areas of the country.

Others are to enhance the introduction of new services in the industry, including number portability, emergency communications services, value added services and to resolve interconnect debts or disputes amongst operators and arbitrary disconnection of subscribers.

Interconnection is the establishment of a physical communication link between two or more operators that allows subscribers on one network to have access to subscribers on the other networks

It is ideal for a multi-operator telecom market like Nigeria as it helps to promote competition, defines revenue source for all operators, ensures high quality of service as more calls are terminated and leads to higher subscriber base, better quality of life to citizens.

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