Nigerian telcos owe each other US$129 million in interconnection fees

Telecoms operators in Nigeria owe each other over N20 billion (US$129 million), according to the Nigerian Communications Commission (NCC), an amount that could jeopardise the gains made in the industry over the past decade.

Dr Eugene Juwah, Executive Vice Chairman and CEO at the NCC, explained that the largest debtors are the operators in the Code Division Multiple Access (CDMA), who owe their counterparts in the Global System for Mobile (GSM).

“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.

The huge debts are attributed to the operators’ abuse of the provisions of the guidelines on procedures for granting authorisation to disconnect telecommunications operators.

These operators simply refuse to pay up the amounts they owe their counterparts, hence the enormous debt, NCC said.

Reports further suggest that a number of operators refused to settle their debts, arguing that their counterparts inflated the figures, contributing to the 60 percent of the debt.

Abimbola Akeredolu of Banwo & Ighodalo, a leading law firm in Nigeria, commented that with the current state of the market, GSM operators are more favoured by the difference in revenue sharing ratios between them and others in CDMS.

“In practice, the revenue sharing ratio between mobile and fixed network is 14 to 6 and 12 to 8, depending on which network is terminating or originating the call,” Akeredolu said.

She added that as long as there is the feeling within the industry that GSM companies are favoured, the interconnectivity issue will persist.

Interconnection fees, the amount of money operators charge each other for calls terminated on their networks, has been heavily contested in many African countries, including Kenya, where until recently the smaller market players complained that the previous rates favoured market leader Safaricom.

Posted in: Telecoms

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