The Nigerian Communications Commissions (NCC) today said it has begun the implementation of Accounting Separation Framework in telecoms industry as part of an effort to deepen competition among telecom operators in Nigeria.
In a statement signed by the Director of Public Affairs at NCC, Dr. Ikechukwu Adinde, the telecom regulator stated that the framework will ensure the provision of qualitative and efficient telecoms services as stipulated in Nigerian Communications Act (NCA), 2003.
“In order to further ensure transparency and accountability in regard to effective regulation and prevention of anti-competitive behaviour, the NCC has commenced the implementation of the Accounting Separation Framework (ASF) in the Nigerian telecoms industry effective from July 15, 2020,” the statement announced.
The policy document, “Determination on the Implementation of an Accounting Separation Framework for the Nigerian Telecoms Industry”, which was developed via a consultative process in 2015, has undergone a comprehensive review by the regulator in collaboration with telecoms licensees and other critical industry stakeholders.
With the commencement of the implementation of the framework, telecoms licensees are, henceforth, obligated to submit their Regulatory Financial Statement (RFS) to the Commission in line with the new ASF, within seven months after the end of the licensees’ financial year.
Commenting, Prof. Umar Danbatta, the Executive Vice Chairman of the NCC expressed optimism about the framework noting that the new ASF will promote an industry environment that fosters open and transparent financial reporting while ensuring that charges for telecom services are cost-based and non-discriminatory.
Meanwhile, the Accounting Separation Framework is currently limited to and mandatory for only six telecom licensees and will subsist for an initial period of two years after which the regulator may review the list to include other operators.
The six licensees include Airtel Nigeria, MTN Nigeria, Emerging Markets Telecommunications Services Limited (9Mobile), Globacom Nigeria, Main One Cable Company Limited and IHS Nigeria.
The decision to limit the Accounting Separation Framework to six licensees, according to Danbatta is to ensure the necessary structure is in place for reviewing and analysing the accounts before applying the new framework to all licensees in the industry.
He, however, stated that any other licensee willing to prepare its financial statements in line with the new framework is allowed to voluntarily do so, just as he said the Commission may exercise its discretion to demand that a licensee prepare and submit separated account where it is determined that the activities of such a service provider are deemed critical to the overall well-being of the Nigerian telecoms industry.
Therefore, for full and effective implementation of the Framework, every operator under the ambit of accounting separation is required to prepare an Operator-specific Accounting Separation Manual (OASM) containing policies, principles, methodologies and procedures for accounting and cost allocation, which must be submitted to the Commission on or before October 30, 2020, for regulatory approval.
Licensees shall also be required to prepare their financial and non-financial reports in line with the Guidelines for the ASF while reports shall be furnished by the licensees for every accounting year beginning from the 2020 financial year-end.
Also, as part of operators’ licensing conditions, the Commission requires licensees to prepare, in respect of each complete financial year or of such lesser periods as may be specified, separated accounting statements for all their activities.