Experts Recommend AMCON to Mop up Telcos Debts

Nigerian Communications Commission (NCC) has been urged to establish an asset management company to take up the toxic debts of operators, in a bid to arrest the increasing incidence of interconnection indebtedness in the telecommunications space.

An Asset Management Company is an investment management firm that invests the pooled funds of retail investors in securities in line with the stated investment objectives.

With the rising interconnection indebtedness which is already causing rifts among operators, people who should know said that an Asset Management Company is the only way out.

Abimbola Akeredolu, partner, Banwo and Ighodalo Legal practitioners said: “Establishment of an asset management company will solve the problem of interconnection indebtedness by buying up the debts of any telecom operator that is not able to pay or refuses to pay its debts to other interconnection partners.”

Akeredolu, stated that this option at the moment may be the best way out as it will buy up current debt and create a fresh slate to all operators and suggested that the asset management company may be employed to take over the management of defaulting operators and operate them until they become profitable and can meet their financial commitments.

Nodding in agreement, Olasupo Shashore, San, partner, Ajumogobia & Okeke said there was no alternative legal methods to debt recovery except ‘juju’ (black magic).

Aside this, he said the other alternative was to employ the services of an arbitrator to act as intermediary among the concern parties.

Interconnection indebtedness remains a major source of conflict especially in relation to interconnect charges which has resulted to bad debts, despite measures put in place by the regulator .

According to Akeredolu,  “The large volume of the interconnect debts in the Nigerian telecommunications sector is often linked to the sharp difference in revenue sharing ratios between mobile operators and other operators such as landline network owners and fixed wireless operators.”

She noted that aside from the allegations of stifling interconnectivity, the issue of the correct amount owed by telecoms operators to themselves has remained a burning topic which continues to remain largely unresolved.

“As a natural consequence of the failure to resolve the issue of the quantum of indebtedness among the telecoms operators, the level of indebtedness continues to mount and has reached a situation where industry watchers perceive a sense of danger,” she said.

According to the legal practitioner, Interconnect indebtedness in the Nigerian telecommunications sector is currently put at a modest estimate of N20 billion, adding that approximately 60% of these debts are disputed as many operators allege that the figures are inflated while they ascribe the blame to their competitors’ faulty billing systems.

Akeredolu stated that: “The determination of the Nigeria Communications Commission to mitigate the crisis of interconnect debt now plaguing the telecom industry with the licensing of Interconnect Exchanges has suffered a setback as operators refuse to sign up to them more than one year after the Exchanges were licensed.”