NCC Blames Exchanges, Others for High Indebtedness

Nigerian Communications Commission (NCC) has attributed the high incidence of interconnection indebtedness in the telecommunications industry to inability of Interconnect exchanges to pay operators interconnect charges, as well as guidelines on disconnect of owing operators.

The commission has also approved the new ``Guidelines on Procedure for Granting of Approval to Disconnect Telecommunication Operators'' which it said was necessary because the current one approved since 2004 has outlived its usefulness.

Dr. Eugene Juwah, executive vice chairman, NCC who stated this at the regulatory forum on the high incidence of interconnection indebtedness in the telecommunications industry held yesterday in Lagos said that interconnection indebtedness has become a major source of conflict and challenge which has the potential of destabilizing the success recorded in the industry.

“The issue of interconnection indebtedness is peculiar to Nigeria as it has been observed that this problem does not exist in other jurisdictions,” he noted.

He said that it had been observed that some operators took advantage of the provisions of the old guidelines to deliberately refuse to promptly discharge their financial obligations to their interconnect partners.

The NCC chief noted that this was possible because of the processes that had to be followed before the Commission could authorise the disconnection of an operator.

He said that several operators had also noted that Interconnect Exchanges had also become a major part of the problem.

''They now owe other operators interconnection charges, thus compounding the problem they were meant to alleviate. The problem has continued to escalate and the current cumulative debt profile in the industry is worrisome; if the continued high interconnection indebtedness is left unchecked, it will impact negatively on the industry,'' Juwah said.

According to him, the provisions of the new guidelines have taken into consideration the disconnection of all operators, including interconnect exchanges, and shortened the process for granting approval for disconnection.

''This is a measure to ensure that interconnection indebtedness is not detrimental to the effective administration of viable telecommunication businesses,'' the EVC said.

Yetunde Akinloye, assistant director, Legal and Regulatory Services, NCC, said that interconnection was critical as it enabled subscribers to communicate across and within networks.

Akinloye said that the new guidelines would promote public confidence and ensure stability, transparency, competition, innovation and growth in the telecoms industry.

It would be recalled that Nigeria CommunicationWeek last week reported that telecommunications operators in the country have reverted to the old system of passing traffic directly without going through clearing houses.

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.

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 or interconnect exchange 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.