Govt to intervene in telecoms sector’s N30b debt burden

• MTN is owed N13.6 billions

Indications emerged earlier in the week that the federal government may soon find a way to resolve a major challenge confronting telecommunications operators in the country, as regards the increasing interconnect debt among operators.

This became clear on Monday, when the Minister of Communications, Adebayo Shittu, paid a courtesy visit to telecommunications companies in Lagos.

Specifically, when he visited MTN, Shittu, after being inundated with the issue and the amount the telecommunications firm is being owed, said: “The government is currently looking into how the issues would be resolved “very soon.”

A competent industry source put the sector’s interconnect debt at N30 billion as at 2015, stressing that the debts are capable of threatening the stability of the Africa’s largest telecoms market, if the consequences of not settling the debts are not effectively managed by the government.

Termination or interconnection rates are the charges which one telecommunications operator charges another for terminating calls on its network.

Indeed, findings showed that, various operators have failed to settle their interconnect payment for calls initiated on their networks and terminating on competitors’ networks, a development that has increased the interconnectivity debt profile in the country.

According to the source, from less than N10 billion in the last five years, interconnectivity debt profile has increased to N30 billion, as telecoms firms -big and small players – grapple with rising capital expenditure (Capex) and operational expenditure (Opex) in the telecoms industry.

During the minister’s visit to MTN, in its power point presentation, the telecommunications firm revealed that it is being owed the lion share of the interconnect debt in the country, to the tune of N13.6 billion, representing about 40 per cent of the total debt.

However, MTN has about 63 million subscribers and as such, often receive more terminations on its network and has incurred more unsettled interconnect rates from other players.

Reacting, MTN Nigeria’s General Manager, Regulatory Affairs, Oyeronke Oyetunde, said the issue of the rising profile of interconnectivity debt is something that the industry needs to discuss and discuss urgently. “Otherwise, it may pose questions around sustainability of the industry.”

Larger portion of the debt could actually be traced to the collapse of Code Division Multiple Access (CDMA) operators, which owed bigger players such as MTN, Globacom, Airtel and Etisalat.

Already, a total of 14 licensed telecoms operators have been declared inactive by the Nigeria Communications Commission (NCC).