Wanted: AMCON for Telecom Debts

The huge interconnect debt of N20 billion that operators owe one another may rubbish the gains of the telecoms revolution.

The increasing incidence of interconnection indebtedness in the telecommunications space is worrisome despite measures put in place by the Nigeria Communications Commission (NCC), the regulator.

Specifically, the bulk of the debts are owed by operators in the ailing code division multiple access (CDMA) and they are indebted to their global system for mobile (GSM) communication counterparts.

Waxing worriedly Dr. Eugene Juwah, executive vice chairman and CEO of the NCC, said interconnection debt has become as a major source of worry because of its potential to destabilize and rubbish 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,” Juwah said.

He lamented that operators take advantage of the provisions of the guidelines on procedure for granting of approval to disconnect telecommunications operators by deliberately refusing to promptly discharge their financial obligations towards their interconnect partners.

Having tried everything without success, an Asset Management Company may just be the only way 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.

We agree with experts that the 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.

The company being recommended will buy up current debt and create fresh slates for all operators.

Also 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.

NCC should consider this option to efficiently resolve the now seemingly intractable problems of interconnection indebtedness.