Interconnect indebtedness: stakeholders make case for automated settlement scheme

Interconnect Indebtedness, MTN, Globacom,


By Martin Ekpeke

Stakeholders in the Nigeria’s telecom sector have called for the full implementation of an automated settlement scheme for the telecom industry, saying it is the only way out of the interconnect indebtedness quagmire in the industry.


The call follows the recent publication of notices by the Nigerian Communication Commission (NCC) to have some networks disconnected for inability to settle interconnect and infrastructure debts.

Speaking on the issue, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Engr. Olusola Teniola noted that disconnection of networks is not the best solution available to the regulator to resolve the indebtedness crisis.

He argues that the issue of indebtedness has built over the past 15 years and previous attempts to use disconnection of networks as the solution have not worked. “We believe that the full implementation of an automated settlement scheme for the telecom industry in Nigeria is the way out of this situation,” he stated.

He explained that under an automated settlement scheme, which ATCON had endorsed when it was called upon by the NCC to proffer a solution to the rising debt profile in the telecom space some months ago, all operators will be made to set aside a percentage of the their daily recharge card sales into a settlement account to be used every month to handle their interconnect and facility obligations.

The ATCON’s President believe the scheme, when implemented will ensure that every month there is an automated payment of all interconnect and facility charges that are due. “For operators with legacy debts, they will be made to put aside a higher percentage to deal with the legacy debts until paid off. This way within a period of no more than 12 months all legacy debts are cleared with no new debts being added. This represents the sure way to get the industry out of this predicament. This is possible because 98 percent of the services taken by subscribers are prepaid. The originating network should have the money before the service is used. They have the means to pay using the current and future earnings on the network,” he emphasised.

Meanwhile, an industry expert who would not want to be named given the sensitive nature of the issue at stake wondered why NCC is using what would be tantamount to bandaging the wound versus actually applying real medication.

The expert, who should know stated that the issue of interconnect indebtedness has plagued the industry for too long and going by the past experience, disconnection of networks only ended up reducing the number of service providers in the country while not guaranteeing that the operators being owed will get their money. “These operators are still in business so they have the means to pay if a proper framework to collect the payments is in place. That is what the industry efforts should be centered around,” he advised.

One of the interconnect exchange operators affected by the NCC publication wondered why the Commission would list them for disconnection when there is no evidence to show they have been paid by the network operators that passed the traffic. He stated that the interconnect operators don’t collect money from subscribers and it is only when they have been paid by the originating network, that payment can be made to the terminating network.

In his words: “We have explained and presented evidence to the NCC that we have not been paid by the originating networks. We are also being owed our portion of the transit fee. We are being owed hundreds of millions of naira by the telecom operators. All we have been told by the NCC is to also initiate a disconnection process to have operators owing us disconnected also. However this does not solve our problem since it does not guarantee we will ever be paid. We are simply being punished by the NCC for doing our job and now it appears they want us not to be paid at all. This is a sad development for the telecom industry in Nigeria,” the visibly sad operator explained.

A Newspaper reports had indicated that the Nigerian Communications Commission (NCC) has granted disconnection approval to mobile network operators (MNOs) to disconnect owing colleagues over rise in interconnect debt and failure of the affected operators to pay.

Those to be affected, according to the Guardian Newspaper are Globacom, Ntel (MNOs) and interconnect exchange points, including Breeze, Exchange, Solid, Medallion and Niconnx.

The Newspaper said it sighted a document with the title: ‘Pre-Disconnection Notice’, where NCC quoted Section 100 of the Nigerian Communications Act 2003 and the Guidelines on Procedure of Granting Approval to Disconnect Telecommunications Operators.


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