Debts Mount as Telcos Shun Clearing Houses

Telecommunications operators in the country have reverted to the old system of passing traffic directly without going through clearing houses, a development that has led to the current high incidences of interconnection indebtedness, Nigeria CommunicationWeek has learnt.

At the moment over 90 percent of traffic exchanged by operators in the industry are routed among operators directly without the use of any clearing house.

And without the use of a clearing house, operators are always at loggerheads over the volume of traffic routed among them.

Clearing Houses including Integrated Wireless Technologies Nigeria Ltd, Medallion, Interconnect Clearinghouse, were established in 2005 to address problems of indebtedness arising from improper documentation of traffic routed among operators.

When they began operation and most operators connected to them the problem of indebtedness was reduce  as they were keeping record of traffic routed to different operators thereby making bill reconciliation easier.

Nigeria CommunicationsWeek investigations revealed some operators have opted out of the clearing house system preferring to deal directly with each other on individual basis.

This has however come with some problems including rising debts as well as disputes over the volume of traffic routed among them.

Uche Onwudiwe, chief operating officer, Interconnect Clearinghouse Nigeria, one of the Nigerian Communications Commission (NCC) licensed clearing house, said that the reappearance of high indebtedness in the telecom sector in spite of establishment of Clearing Houses is as a result of decision of most operators to route their traffic among themselves.

Onwudiwe, said that such operators are claiming that making use of clearing house in routing their traffic is additional cost compared to direct routing of traffic.

A clearinghouse is a company or association that transfers billing records and/or performs financial clearing functions between carriers that allow their customers to use each other's networks.

The clearinghouse receives, validates and accounts for telephone bills for several telephone service providers.

Clearinghouses are particularly important for international billing because they convert different data record formats that may be used by some service providers and convert for the currency exchange rate.

Clearinghouses provide a variety of services, including processing proprietary records (e.g. switch records) into formats understandable by the member carriers' billing systems, validating charges from carriers with intersystem agreements, and extracting unauthorized or un-billable billing records.