NEWS/ARTICLES

• Interconnect Clearinghouse Nig Ltd Establishes Content Delivery and Management System Platform for Telecoms Networks and VAS Providers
• Decision of the Commission in the Matter of Interconnect Clearinghouse and MTN
• Interconnect debts: NITEL threatens to disconnect PTOs, others
• Telecoms: MTN adopts interconnect exchange
• Why phone calls are so expensive in Africa
• Nigerian operators want debt bureau
• Interconnect Clearinghouse, MTN Sign Agreement

Decision of the Commission in the Matter of Interconnect Clearinghouse and MTN

IN THE MATTER BEFORE THE NIGERIAN COMMUNICATIONS COMMISSION  BETWEEN:  INTERCONNECT CLEARING HSE. NIG.  LIMITED...................................................COMPLAINANT AND  MTN NIGERIA COMMUNICATIONS LIMITED.........................................................RESPONDENT   PROCEEDINGS AT THE HEARING HELD AT THE NCC CONFERENCE ROOM ON 12th APRIL, 2006. INTRODUCTION This Panel was set up under Section 73 of the Nigerian Communications Act, 2003 (NCA, 2003) to resolve the dispute between Interconnect Clearing house Nig. Ltd (ICN) and MTN Nigeria Communications Ltd. based on a Complaint filed by ICN for the Commission to intervene in the matter.   ATTENDANCE PANELISTS: Engr. Ernest Ndukwe EVC (Chairman) Engr. Steven Bello  EC-E & S Dr. Gwandu Bashir EC-L & CA Steven Andzenge DLS Dr. Sylvanus Ehikioya DTRS PANEL ADVISERS: Mr Ayo Oke SA (EVC) Mrs. Akinloye Yetunde   PMLS SECRETARIES: Mr. Shola Adeyemi SML Mr. Mohammed Gwa  SML Ms June Nwachukwu  DML PARTIES: INTERCONNECT CLEARING HOUSE NIG. LIMITED Admiral Alison Madueke Executive Chairman Francis U. Chikelu Chief Operating Officer M.O.Tosin Oni  Chief Business Development Officer  Damain Udeh  Manager Legal/Regulatory MTN Mr. Goodluck Akinwale General Manager, Commercial Legal Ms Oyeronke Oyetunde Manager, Regulatory Affairs Introductions were made and the Chairman made some opening remarks after which a summary of the Complaint was read to the hearing of the Parties. RECORD OF PROCEEDINGS ICN`S SUBMISSIONS  ICN presented its case to the Commission by way of written submission received by the Commission and marked as Exhibit ICN 1. In an oral presentation in support of Exhibit ICN 1, ICN maintained that by virtue of the conditions in its license and the provisions of the Nigerian Communications Act 2003 (“the Act”) and the Telecommunications Networks Interconnection Regulations 2003, ICN must interconnect with other networks in order for it to carry on its business. ICN contended that by S. 96 and 157 of the Act, it was a proper “Networks Facilities Provider” and that other networks facilities providers therefore owed it an obligation to interconnect with it on request. Eighteen (18) operators, including one (1) Digital Mobile Licensee, were said to have interconnected with ICN. On its complaint against MTN, ICN stated that not only has MTN failed (without reason) to interconnect with them, they have also not been available to commence interconnection negotiations. ICN referred to various annexures to Exhibit ICN 1 to support its contention that it made a presentation to MTN, informed MTN of its roll out from time to time and made a formal request for interconnection to service MTEL pending when a response would be received in respect of its general presentation to MTN. Since no favourable response was received from MTN, a complaint was made to NCC which advised ICN to make another request to MTN for interconnection as a stand alone operator. Annexures F, dated October 6, 2005 and G, dated October 25, 2005 to Exhibit ICN 1 were said to be the formal request and a reminder. The above notwithstanding, MTN did not interconnect with ICN whereupon NCC intervened vide letter dated January 20, 2006 directing MTN to interconnect with ICN or face sanctions. That MTN despite several other letters from ICN to MTN and a meeting between the Executive Chairman of ICN and the Chairman of MTN, MTN has still not interconnected with ICN. Concluding its presentation, ICN reiterated its position as follows: ICN was a network facilities provider as contemplated by law.   MTN has an obligation by law to negotiate interconnection with ICN   The right of ICN to be interconnected cannot be sacrificed on the altar of the rights and obligations of MTEL.   ICN demands interconnection with MTN subject to agreed terms and conditions, and appeals for the protection of its rights to interconnection.   MTN should continue to contribute to the growth of the telecommunications sector without rendering the functions of NCC nugatory.   MTN`S SUBMISSIONS MTN made a power point/oral presentation of its case. They informed the panel that a written presentation (to be admitted as Exhibit MTN 1) would be forwarded after the hearing. The Commission confirms receipt of the written submission   MTN submitted its obligation to interconnect is mandated with public switched networks/operators only.   By virtue of the terms and conditions of Interconnect Exchange License (a License issued to ICN), Interconnect Exchange Licensees (IEL):   1.   Lacks the requisite right to demand the interconnect of its network with that of any other operator;   2.   is only obliged to interconnect with requesting operators; and   3.   Lacks the requisite locus standi to require a mandated interconnection with non-requesting operators.    MTN has opted therefore to exercise its lawful right to decline interconnecting with Interconnect Exchange Licensee.   In the event that any operator other than MTN requires interconnection to MTN through the services of Interconnect Exchange Licensees, such an operator is free to do so. By virtue of the requesting operator's right to interconnect its network with MTN, it may then request that MTN interconnect with the requesting operator's network via ICN as its agent subject to compliance with necessary due diligence.     MTN then gave a overview of the following:   a..     MTN`s Mandated Obligation to Interconnect is contained in Condition 16 of its Digital Mobile License (DML). According to MTN the essence of the mandated obligation to interconnect was primarily to ensure that the subscribers/end user of any two public operators can communicate with each other.   b..     MTN drew the attention of the Panel to the Interconnect Exchange License Terms which specifies the scope of operations as contained in condition 22 that the core interconnect operations to transmit traffic should be at the instance of Telecommunications Service Providers only. MTN further drew attention to license limitations clause contained in Condition 33 of the Interconnect Exchange License which restricts them from rendering Public Switched Telephone Network Services. According to MTN, the primary import of the above is that Interconnect Exchange license holders are of a class of telecommunications operators that is separate and distinct from those we would classify as public operators. Therefore it cannot be assumed that the rights applicable to public operators would automatically be applicable to Interconnect Exchange Licensees     i.   ICN`s rights with respect to interconnection (if any). This  was classified into:       (a) Network Services and Facilities Provider wherein the provision of Section 96 of the NCA, 2003 and the definition of a “Network Service Provider” as contained in Section 157 of the NCA, 2003 was mentioned. According to MTN the above definitions are so wide and all encompassing in import as to include all kinds of operators, users, proprietors, landlords of telecommunications premises, infrastructure such as property owners, etc; Thus for the purpose of creating a level laying field and fairness, could it be argued that interconnection should be mandated on the premise of this provision with above mentioned categories of users in order to accommodate a mandated obligation to interconnect with interconnect Exchanges?       (b) Right to demand Interconnect: MTN submitted that unlike the DML or fixed telephony licenses issued by the Commission, the Interconnect Exchange license contains no provision giving it a right to demand mandatory interconnection with a carrier or a DML licensee and that by virtue of its license an interconnect Exchange licensee is not mandated to connect or keep connected its exchange with the network of a public operator. Instead, an Interconnect Exchange is mandated to interconnect with an operator only when it is requested by that operator to interconnect its telecommunications system with the requesting operator’s network. MTN stated that within the purview of the Interconnect Exchange license, the only interconnection that can and should take place is between the requesting operator’s network and the Interconnect Exchange system and that the transacted interconnection cannot extend to the network of a third party – Condition 15 of the Interconnect Exchange License was cited. Thus if the licensee does not receive a request for interconnection from another licensed operator, there is no obligation to interconnect MTN submitted that the above reflects the applicability of generality rights under the NCA 2003, the interconnect regulations and interconnect guidelines as regards Interconnect Exchanges       (c) Scope of Interconnection Regulations & Guidelines; MTN is of the view that for the purposes of the Telecommunications Networks Interconnection Regulations and Guidelines on Interconnection of Telecommunications Networks issued by the NCC in 2003, the mandatory obligation to interconnect arises only with respect to “telecommunications operators defined as “providers of telecommunications services duly licensed to manage and operate a public telecommunications network”. In the light of the confines of a license that expressly forbids the provision by Interconnect Exchanges of Public telecommunications services, the said regulations and guidelines clearly, exclude any application to Interconnect Exchanges. MTN further contended that NCC in furtherance of its powers to issue regulations and guidelines, duly issued regulations and guidelines to provide some guidance as to how the provisions of sections 96 to 99 of the NCA 2003 are to be interpreted.       (d) Core Activity v Mode of Execution - MTN stated that  the provision of public telecommunication services is the primary service rendered and is the core licensed activity of telecommunications operators as defined above. Interconnection is mandated for all such telecommunications operators and they should and ought to be given the choice as to the manner in which such interconnection is effected. Interconnection Exchanges are only one of such options available and serve as one of several means to an end. To mandate interconnection with interconnect Exchanges and in particular ICN, would amount to obligating the use of a particular means/mode of interconnection, and subsume and erode the choices available to operators based on which 7(seven) Interconnect Exchanges were duly licensed. To mandate interconnection with one of such choices would be to mandate interconnection with all and this would violate the essence of the significant Interconnect Exchange License provision with respect to requesting operators. This runs against the principle of laisse-faire, a liberalized market, fundamental freedom of choice and would be anti-competitive   In conclusion MTN posited that: a.     They will rely on all issues raised in their submission and in addition   b.     In MTN `s business evaluation, the current efficiencies far outweigh the additional expense in value, time and resources that outsourcing with an Interconnect Exchange would incur.   c.     The Nigerian environment should follow International trends and should be an issue for commercial consideration and evaluation on a one - on- one basis   d.       All duly licensed operators that  have approached MTN have been duly accommodated on the MTN network subject to certain prerequisites such as legal and technical documentations   e.     With reference to the issue of indebtedness, Interconnect Exchanges do not hold the panacea and should not be so promoted   f.     The duplication of mandating direct interconnection by indirect means should not be promoted as it increases the cost of bringing telecommunications services to the public   Consequently, MTN maintained that whereas it will give due consideration to the request by public operators who wish to employ the services of interconnect exchanges, it reserved the right and discretion for itself to determine the vehicle and mode of interconnection and should therefore not be forced or mandated to outsource its interconnection function.  The Panelist asked the following questions: Has MTN interconnected with all operators at the points of requests – MTN answered in the affirmative   Does MTN believe that Interconnect Exchange Licensees can resolve issues of interconnect debt – MTN said they are not entirely convinced   Does ICN provide safeguard which is usually expected of Clearing Houses – ICN said they do provide bank guarantee   Can ICN conduct selective blocking – ICN said yes they could do selective blocking   Whether the provision of Section 96 and 157 of the Act on right and obligation to interconnect apply to ICN – MTN answered that they not only apply to ICN but also to several other licenses, telecom users, property owners, etc; MTN maintained that individual licenses had however limited the scope of the provision of the Act which is too wide.   Would MTN incur additional cost for this interconnection – ICN answered that MTN does not have to pass its traffic through ICN   END OF THE HEARING  The Chairman thanked all the parties for attending the hearing and promised that the Commission would consider all the presentations objectively and resolve the matter in the best interest of the industry.     IDENTIFICATION OF ISSUES  Towards the just determination of all issues canvassed by the Parties in support of their position, the Panel has considered the submissions of Parties. Based on the review of presentations at the hearing, the following issues have been formulated for determination:   1.   Whether by the provisions of the Act and subsidiary legislations, an Interconnect Exchange Licensee is a proper licensee of the Commission that is owed an obligation to be interconnected by network services and facilities providers. 2.  If Issue 1 is answered in the affirmative, whether the Commission can by virtue of the obligation, and upon consideration of the principles governing interconnection, order MTN to interconnect with ICN  and whether an order compelling MTN to interconnect ICN will not by extension also apply to the six (6) other Interconnect Exchange Licensees   3. Whether MTN `s refusal to interconnect with ICN or any other Interconnect Exchange Licensees would contravene the basis for which seven (7) Interconnect Exchanges were licensed by the Commission.   4. Whether MTN`s connection to an Interconnect Exchange Licensee would amount to outsourcing for which MTN would be required to pay the Interconnect Exchange Licensee for its services.    FINDINGS ON ISSUE ONE It is worthy of note that both parties in their submissions linked to this issue relied on the provisions of Sections 96 and 157 of the Nigerian Communications Act 2003 dealing respectively with the obligation to interconnect and definitions of terms.   Both parties agreed that going by the strict interpretation of the above provisions, ICN is proper licensee of the Commission to be interconnected.   Whereas ICN stood on the strict interpretation of the law, MTN contended that the strict interpretation was bound to work a mischief and that the conditions attached to various licenses were introduced to limit the scope of the provisions of the law.   Contrary to the submission made on behalf of MTN that MTN is only mandated to interconnect with Public Switch Telephone Networks/ Operators, the Commission finds no such provision in any law, regulation or license in Nigeria   The submission of MTN also appears to confuse a facilities provider with a network facilities provider in its interpretation of Section 96 of the Act. While indeed a facilities provider would include any provider of facilities (including landlords as contended by MTN), a network facilities provider particularly as defined in Section 157 of the Act would include licensed operators and owners of network elements(s) used principally for or in connection with the provision of telecommunication services (excluding customer equipments.)   The Commission therefore does not find any ambiguity or mischief in a strict interpretation of Section 96 of the Act, which mandates all Network Service Providers and all Facilities Service Providers and all other Network Facilities Service Providers to interconnect with all other Network Service Providers and all other Network Facilities Service Providers.   In the considered opinion of the Commission, Condition 16 of the license granted to MTN does not exclude ICN from the persons who are to be interconnected. The view of MTN that the term “licensee” should only mean other Digital Mobile Licensees cannot be supported, indeed MTN is presently interconnected to various other Operators now. Whereas the license does not define the term, the Act expressly defines “licensee” as “a person who holds an individual license or undertakes activities which are subject to a class license granted under the Act” – thus including ICN in the definition of “licensee”.   Moreover, even if there is a seeming conflict between any License Condition, Regulation or Guideline and Section 96 of the Act on the matter of interconnection obligation, it is trite that the express provisions of the Act must take precedence over provisions of either the license condition, regulation or guideline.   Consequent upon the above, the Commission finds that ICN is a proper licensee of the Commission which is owed an obligation to be interconnected by network services and facilities providers.   FINDINGS ON ISSUES TWO The law confers a right and obligation to interconnect on licensees of the Commission.   The obligation is not sacrosanct as Regulation 1 (2) of the Telecommunications Networks Interconnection Regulations (the Regulation) 2003 empowers the Commission notwithstanding that there is an established obligation to interconnect, to agree to limit the obligation to interconnect.   The power to limit obligation is subject to the reasonable discretion of the Commission where among others, the license issued to an operator does not authorize the services for which interconnection is requested.   By the nature of the service of Interconnect Exchange Licensees, they are entitled to Interconnection. Therefore, the Commission’s finding is that it cannot limit an obligation to interconnect the Interconnect Exchange Licensees.   Having held that Interconnect Exchange Licensees cannot be exempted from Interconnection, where there is a failure to discharge the obligation to interconnect, power has been conferred on the Commission under Regulation 5 (5) of the Regulations to compel parties to commence negotiations on interconnection agreement on a date prescribed by the Commission.   Where however the conditions cannot be agreed upon, and notwithstanding that the determination of interconnection terms and conditions is primarily the responsibility of parties, the Commission may intervene to impose conditions under Regulation 13 (2) (a), (4) and (5) of the Regulations.   There are ample records indicating that MTN has failed to discharge the obligation to interconnect with ICN preferring in the alternative to continue direct interconnection links both with its existing interconnect partners and other operators requiring interconnection.   By law, the failure of MTN to discharge this obligation can be visited with an order compelling the commencement of interconnection negotiations   FINDINGS ON ISSUES THREE In regulating the telecommunications industry, the NCA, 2003 confers on the Commission powers to license various operators under Sections 31 and 32. In exercise of such powers, the Commission as at now has licensed seven (7) Interconnect Exchange Licensees. The Commission is of the view that licensing Interconnect Exchange Licensees with in built Inter-Carrier Billing Clearing House will facilitate solutions to the major problems being encountered by Network/Service Operators such as: 1.     Inter-carrier Billing 2.     Waiting time for Interconnection Capacities 3.     Quality of Service 4.     Sharing of Network Resources Licensees of the Commission by law have a right and obligation to interconnect.  Denial of interconnection to the Interconnect Exchange Licensees would render nugatory the purpose for which the Commission licensed this category of Licensees.  Under Regulation 5 (5) of the Regulations, the Commission can compel parties to commence negotiations on interconnection agreement on a date prescribed by the Commission where there is a failure to discharge the obligation to interconnect.   FINDINGS ON ISSUES FOUR  In page 8 paragraph iii of the submissions made by MTN, it canvases the right to make its own business decisions based on its evaluation with its right to decide whether or not to outsource a particular aspect of its operations.  It appears that MTN assumes that its obligation to interconnect with an Interconnect Exchange Licensee means it’s interconnect operations would be automatically outsourced to the Interconnect Exchange Licensee a cost.  The assumption is incorrect and must be clarified by the Commission. Interconnection traffic/connection may either be unidirectional or bi-directional and any operator may request interconnection in order to pass traffic in one direction or the other or in both directions as illustrated in the diagram below: OPTION A REQUESTING OPERATOR ---------->   IEL  ----------->       REQUESTED OPERATOR    OPTION B REQUESTING OPERATOR ---------->  IEL  ----------->        REQUESTED OPERATOR    OPTION C REQUESTING OPERATOR  -------->  IEL  ---------->           REQUESTED OPERATOR The requesting operator may choose any of the above options on its own or jointly with the requested operator. If it makes the choice on its own it would have to bear the cost. The reason for making such a choice and its willingness to pay for it may be in order to require any of the following services or facilities of an Interconnect Exchange Licensee:  1.     Switching facilities 2.     Interconnect Billing facilities 3.     CDR production 4.     Reconciliation services 5.     Physical/technical interconnection services  A requested operator may still maintain a direct connection with the requesting operator if neither of them is willing to pay for the cost of passing traffic from the requested operator to the requesting operator.  The Commission therefore holds that, interconnecting with an Interconnect Exchange Licensee does not amount to outsourcing by MTN such that it would be required to pay the Interconnect Exchange Licensee for its services.   DECISIONS Having carefully considered the relevant facts of this matter based on the submissions by both parties, and in line with the provisions of Section 73 and 96 of the NCA, 2003, the Telecommunications Network Interconnection Regulations, the Commission hereby makes the following decisions: 1.    The Commission finds that MTN has failed to discharge its obligation to interconnect with ICN by virtue of the provisions of Section 96 and 157 of the Act. Consequent upon the powers conferred on the Commission under Regulation 5(5) of the Regulations, Parties are hereby directed to commence negotiations on interconnection agreement on or before May 15, 2006   2. The Commission may intervene to impose conditions under Regulation 13 (2) (a), (4) and (5) of the Regulations where the Parties cannot agree upon the conditions for the Interconnect Agreement.     Dated this 9TH Day of May, 2006. BY ORDER NIGERIAN COMMUNICATIONS COMMISSION

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Interconnect debts: NITEL threatens to disconnect PTOs, others

By Everest Amaefule, Abuja
Published: Wednesday, 2 Aug 2006

The Nigerian Telecommunications Limited will soon begin a massive disconnection of Private Telecommunications Operators and prepaid operators over interconnect debts estimated at over N5billion owed by the operators.

NITEL, which has been battling to settle arrears of salaries owed to its workers, issued the final notice of demand for payment on the 13 PTOs and 42 prepaid card operators indebted to it last week.

The Ministry of Labour, the management of NITEL, officials of the Bureau of Public Enterprises, the Ministry of Finance as well as labour leaders also met on Monday over the severance package of those to be affected by the rationalisation of staff preparatory to the take over of the first national carrier by private investors.

NITEL’s management also on Monday decided to yield to the pressure by trade unions in the company to publish the names of the debtors in national newspapers.

PTOs, which may be disconnected by NITEL include Cell Communications Limited, MTS First Wireless, Reliance Telecommunications Nigeria Limited and Startech Connection Limited.

Others are Intercellular Nigeria Limited, Mobitel Nigeria Limited, Disc Communications Limited, Independent Telephone Network and Monarch Communications Limited.

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Telecoms: MTN adopts interconnect exchange

By Everest Amaefule, and Jonah Iboma
Published: Monday, 7 Aug 2006

Following the regulatory intervention by the Nigerian Communications Commission, MTN Nigeria has joined the list of firms using interconnect exchanges.

MTN’s External Relations Manager, Mr. Andrew Okeleke, told our correspondents on Friday that his firm and Interconnect Clearinghouse Nigeria Limited had formally been interconnected as a result of the intervention by the telecommunications regulatory body.

ICN is one of the companies licensed by the NCC to provide interconnect services to operators to minimise interconnect dispute among them.

At the inauguration of the policy, the Executive Vice Chairman of the NCC, Mr. Ernest Ndukwe, said that the use of the exchanges was not necessary for any operator to help bring an end to the frequent dispute over interconnect debts. According to him, the NCC expects that once an operator goes to an interconnect exchange service provider, others will meet it there.

Even though interconnect exchanges had been licensed for over two years now, operators, especially GSM, networks have generally avoided using them.

But the failure of telecommunications firms to fully use independent interconnect facilities was recently felt during the strike embarked upon by staff of the Nigerian Telecommunications Limited as there were a lot of interconnect hiccups during the period due to the location of interconnection points in NITEL premises.

Besides ICN, other interconnect exchanges licensed by NCC include Integrated Wireless Technologies Nigeria Limited, Exchange Telecom Limited, Telexchange Services Limited, Medallion Communications Limited and Niconnx Communications Limited.

Before now, with several firms operating in the country, each was involved in signing interconnect agreements with the other. This led to some problems and, in some instances, some bigger operators rejected interconnection with smaller ones.

The situation forced Glo Mobile to unilaterally disconnect some PTOs for which it was fined by the NCC.

With the MTN’s decision, Nigerian telecommunications industry is set to experience a major boost since MTN is responsible for a majority of traffic in the telecoms sector.

This is expected to translate to greater tasks for clearing houses as other operators would be expected to interconnect with MTN at the interconnect exchanges.

MTN had been locked in an interconnect dispute with ICN following the refusal of the digital mobile operator to link with ICN.

While bringing complaints against MTN, ICN stated that not only had MTN failed without reason to interconnect with it, but that it also refused to commence interconnection negotiations with it.

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Why phone calls are so expensive in Africa

afrol News

It is estimated that African telecom operators are cheated for revenues totalling more than US$ 1 billion from their northern counterparts, who are not properly billed when international calls are made to Africa. These losses are a major reason behind the stiff pricing of international calls for Africans. The lack of up-to-date billing systems between telecoms is held responsible.

Charges to carriers for using the networks of others - also known as interconnect - is a challenge for many African operators. Complete interconnection between networks is crucial in a competitive environment, but this is easier said than done. The problem is twofold: firstly a regulatory issue - usually about the level of interconnect costs - and secondly a practical issue of installing equipment for allowing interconnect and billing for this traffic.

Billing is the heart of every successful telecoms company, the glue that holds the business model together and finances future investment. In an age of steady deregulation and increasing foreign investment, one form of settlement payment - known within the industry as interconnect billing - plays a critical role in generating revenue streams. This is the process whereby one operator charges another for using its network to support a call.

The concept of interconnection has been around since the 1920s but it is only recently that telecommunications companies have become able to accurately invoice each other as a result of advanced billing software and comprehensive interconnect agreements.

In the Western World, interconnect billing has become the first or second source of income for most telecommunications players. For major incumbent operators, this adds up to hundreds of millions of dollars worth of revenue each year.

In Africa, the concept of interconnect billing is still relatively new for most operators, but the opportunity to make money through this method of payment are too great to ignore. So are the losses. For example, it is estimated that first world telecommunications operators are consistently underpaying their African counterparts by up to a third of the annual US$ 4 billion in fees for international calls as many African operators have no means of checking the invoicing.

Since most international calls are too expensive for Africans to make, there is a net number of incoming calls from various parts of the world to the continent and this brings in a fair amount of money. Unfortunately, African telecoms operators have little proof to ensure their invoicing of foreign telecommunications operators are accurate or even the means to prove that the calls crossed their lines. If these invoicing issues could be sorted out, African operators could easily receive another US$ 1 billion annually in revenue.

Effective interconnect settlement is not only about dealing with international partners but with local operators as well. As the markets become more liberalised, incumbent operators are faced with new competition within their own borders - especially with the increase of GSM players.

Without the right billing equipment, calls can not be accurately billed for across the network. Nor can interconnect partnerships be established without effective interconnect agreements in place. The result is poor services and increasingly frustrated customers.

Consequently, not a week goes by without some African interconnect issue being in the news.

Operators in countries such as Nigeria, for example, are consistently facing major interconnection issues since the launch of rival GSM services. Part of the problem is the cost of the actual interconnection charges, which has a profound effect on the development of wholesale or retail markets in Nigeria, as well as on decisions to invest in infrastructure.

In the past companies such as Nigeria's national telecom operator NITEL have argued that their GSM tariff of naira 21 per minute can barely support the prevailing interconnect tariff of naira 18. Furthermore, most companies do not have the network technology to ensure that their future inter-carrier partners are not going to overcharge for their services.

Nigeria's Communications Commission (NCC) - the country's telecoms watchdog - has met regularly with operators to smooth out this issue as well as other interconnection disputes between NITEL, the National carrier and GSM operators. The NCC warned operators that 60 days after physical interconnection, an agreement would have be executed by the parties to the interconnect partner. Otherwise, the NCC would step in to enforce the new policy.

NCC's pressure has yielded some results, with companies such as MTN Nigeria signing an interconnect agreement with the second national operator and fourth GSM operator, Globacom last year. But there is clearly still more work to be done. Services are still poor, particularly between mobile operators who have not ratified partnership agreements.

As a result the NCC is considering the possibility of imposing sanctions on any major operator whose quality of service falls below its published minimum grade of service thresholds. For their part, operators have pledged to take urgent steps to improve service delivery and consider the option of per-second billing.

But improvements have not taken place soon enough for the disgruntled Nigerian population, who in the past have even resorted to nationwide boycotts of mobile services. In one recent incident, millions of customers switched off their phone en masse in the hope of forcing operators to lower tariffs and raise standards.

The issue of lower customer tariffs and successful call transfers between networks brings us back to the issue of interconnect billing systems. Flexible interconnect software is designed to help operators evaluate a call and its network details from beginning to end to prevent any form of settlement errors from occurring, such as overpaying operators for network usage and not accurately charging partners for its own services.

Money earned from effective billing practices agreements can be redirected to new product launches and competitive pricing for new services- essential business strategies for keeping ahead of competition.

As a marketing tool, interconnect billing systems are also extremely useful to operators as they can provide online reporting capabilities to give companies the possibility to analyse and forecast usage for products and services, such as directory enquiries and toll free numbers. This helps to understand trends in the marketplace and to determine what types of new services could potentially increase the company's revenues even further.

Investment for interconnect systems are gaining momentum, with countries as diverse as Senegal, Egypt and South Africa installing new equipment. Best of all, there is fast return on these investments (ROI). It is estimated that installing a flexible interconnect platform can allow companies to increase their revenue stream by 30 percent- money that African operators can reinvest into their infrastructure.

The good news is that now is the time for telecoms players to buy their software. Billing vendors have had to slash their prices in a bid to win customers as a result of a slowdown in the telecoms sector.

According to the industry association Telemanagement Forum, today's prices have fallen so much that OSS vendors are even losing money just to win business. Margins have been cut slim, and some vendors are selling at below cost. Ten years ago, carriers were spending anything up to US$ 20 million on massive systems, but now prices around US$ 1 million, and even below that, are common.

Africa's booming telecom market
Interconnect systems are becoming crucial for Africa's telecoms markets, which are growing at a remarkable pace, especially in the area of wireless communications. A recent survey by the International Telecommunications Union (ITU) has found that Africa has become the first continent to have more mobile users than fixed line customers.

At the end of 2003, there were more than 52 million mobile subscribers in the continent, 13 million of which were added during that year, compared to around 24 million landline customers. The report also revealed that the continent’s mobile phone usage has increased at an annual rate of 65 percent; double the global average.

Managing this level of growth - and the intercarrier partnerships that go with it - will be a challenge, but with the right billing systems in place there is no reason why Africa's telecoms operators cannot enjoy a future of incredible financial growth and prosperity. All it takes is a little bit of an investment up front and, of course, the right legislation.

Christian Ciupek is the regional Director in Africa for Intec Telecom Systems, a leading South Africa-based billing software provider.

By Christian Ciupek

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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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Interconnect Clearinghouse, MTN Sign Agreement

In continuation of its plans of easing bottleneck often associated with interconnectivity among telecomm operators, Interconnect Clearinghouse Nigeria Limited (ICNL) has added MTN to its services.

Speaking at the ceremony marking the signing of the Memorandum of Understanding (MoU) between the two outfits, Admiral Alison Madueke, ICNL Chairman, stated that with the coming on stream of clearing house system in the sub-sector, the era of subscribers having poor services would soon be over.

He said: " With the type of technology adopted by ICNL and with the high level of manpower and technical competence, MTN Nigeria should be rest assured that ICNL will add value and quality to their network".

Madueke added that the licensing by Nigerian Communications Commission (NCC) of interconnect exchanges would make MTN one of the focus in providing quality service to its direct subscribers, since ICNL exchanges are to handle their transit calls.

The chairman said his firm would "make full use of interconnect exchanges to fulfil its obligations to telecom operators in Nigeria, who desire to make full use of the clearinghouses".

In his remarks, Ahmad Farouk, the chief executive officer for MTN, said his company has continued to make its services available and affordable in all parts of the country in line with the government policy of even spread of GSM and its value-added products.

With the signing of the agreement, ICNL has entered into business understanding with a number of the operators including, NITEL.

It had earlier signed interconnect agreements with other Private Telecommunications Operators (PTOs) in Lagos including Multilinks, Starcomms, Intercellular, MTS 1st Wireless, 21st Century, VGC communications, Reltel, CellCom, ITN, GTE, Topcom, Peace Global, Webcom, Imperial Telecoms and Allied Bond. Oduatel in Ibadan and Rainbownet in Enugu, two PTOs outside Lagos, have also signed on with ICNL.

Also included among the major GSM services operators to have partnered with the clearinghouse system are Mtel and Globacom.

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