PARTS OF NIGERIAN TELECOMS SECTOR LOOK SET TO GO INTO MELTDOWN OVER UNPAID INTERCONNECT CHARGES

Telecoms

What is often euphemistically referred to as Africa's "payment culture" looks set to threaten a number of Nigerian telcos with extinction. According to the Nigerian regulator, the NCC there is a mounting level of unpaid interconnect charges and that some operators were seeking approval to disconnect firms that had failed to defray their accumulated interconnection charges from the national network.

Disconnections of this kind have a severe impact on their operations and would probably drive some companies out of business. The NCC has has appointed inspectors to look into the finances of the unnamed defaulting companies, in order to assess their ability to pay.

"The commission is aware that the issue of interconnect indebtedness has become prevalent in the industry and has noted that if the situation is not brought under control it would have a negative impact on the integrity and stability of the industry," the regulator said in statement.

"In the system that we have in the country where a higher percentage of subscribers are on the prepaid payment platform, the question of inability to pay interconnect charges by any operator should not arise as the money is already taken upfront," the NCC said.

Non-payment of bills is a particularly acute problem in the Nigerian telecoms sector as exemplified by three recent high profile cases. Earlier this year, Nigeria's number two mobile network Globacom threatened to drag some fixed wireless operators before the financial crimes agency for allegedly issuing it a dud cheque.

Last October, Nigeria's number three cellphone operator Vmobile, filed court papers seeking to liquidate the troubled national carrier Nitel over a debt of more than three billion naira (USD224 million).Nigeria's leading mobile network, a unit of South Africa's MTN Group , had also said the state carrier owed it huge unpaid interconnect charges. Nitel's response has been that its debt to private operators including Vmobile was a fraction of what they it. The disputes were resolved by the NCC.