Nigerian operators want debt bureau

AAs mounting debts threatened to eliminate many telecom players from Nigeria’s boisterous telecom sector, some operators are canvassing for the establishment of a debt management bureau.

Part of the task of the bureau would be to help telcos reconcile interconnect bill in dispute. Over 15 billion (about $125 million) interconnect debts hang over Nigeria’s motley crowd of telcos.

Close to 60% of these debts are in dispute with some telcos alleging inflation of the figures. They are blaming competitors’ faulty billing machines [Related Story: Haunted by Debts in IT Edge print edition June 2005].

Incumbent carrier Nitel which was asked to declare bankruptcy last year by Vmobile for failing to pay interconnect debt owed it (Vmobile), has published a list of over 30 companies allegedly owing it to the tune of over N8 billion (about $73 million).

The carrier said its inability to pay its own debts is a result of the billions owed it. More than half of the operators on Nitel’s list have since gone under raising questions over Nitel’s ability to ever pay up its debts.

The Nigerian Communications Commission (NCC) which had expressed concern over the debt ‘miasma’ and its potential to erase confidence in the sector had met with operators privately in Lagos some days back.

At the meeting, operators mooted the idea of a bureau to assist operators in a mutual settlement of debts and differences.

Nigeria’s interconnect debts is often blamed on the sharp difference in breakage between mobile operators and other operators such as landline network owners and fixed wireless operators.
“The NCC has succeeded in making us employees of GSM operators and all we do is work for them,” one fixed wireless operator complained bitterly in Lagos during phone interview with IT Edge in late June. “A situation whereby GSM companies are better favoured than the fixed and wireless operators will continue to lead to interconnectivity debt, or breakage,” he added. Breakage is the telecom parlance for the situation when a telco fails to pay its outstanding debts for calls carried by other telecom providers.

In practice, the revenue sharing ratio between mobile and fixed network is 14/6 and 12/8 depending on which network is termination or originating the call. Fixed and landline operators are asking that parity be introduced with growing argument that all network face equal challenges.

Beside with the call mix indicating that more than 60% of calls on mobile networks are intra-network calls, non-mobile operators are asking that the regulator remove the cushion that tilts interconnect revenue sharing regime in favour of mobile operators.

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