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NCC resolves Etisalat, IHS N13b debt imbroglio

By Adeyemi Adepetun   |   04 October 2016   |   4:18 am
Garba Danbatta

Garba Danbatta

• Prevents MTN from disconnecting 30 million Globacom subscribers
• Operators lament negative impact of forex regime on sector

A major crisis that could have resulted in the breakdown of service between Etisalat and IHS over a protracted N13 billion debt owed the latter by the former has been amicably resolved by the Nigerian Communications Commission (NCC).

Besides, the commission said its intervention also prevented MTN from disconnecting 30 million Globacom customers in the country recently.

These were revealed by the Executive Vice Chairman of NCC, Prof. Umaru Danbatta, in Lagos at the weekend, during a reception in his honour organised the Association of Telecommunications Companies of Nigeria (ATCON).

Danbatta, who was silent about the particular issue between Etisalat and IHS said, the UAE headquarter based firm has paid N4 billion of the debt.

However, industry sources claimed that the issue could not have been outside sales and lease of towers between the two firms. Etisalat is a telecommunications service provider, while IHS is an infrastructure provider in the ICT industry.

Around this period last year, Etisalat completed the transfer of 555 telecommunications towers to IHS Plc. Though, then, reports had it that the transaction for which no financial value was given was part of Etisalat’s strategy to improve the quality of its network and to accelerate the roll-out of 2G, 3G and 4G coverage in Nigeria.

In the deal, IHS was to own and manage more than 15,500 of the installations in Nigeria, and more than 23,100 in Africa as a whole.

A year before the last, Etisalat also sold 2,136 of its towers to privately-held IHS and lease them back as part of plans to expand its coverage in Nigeria.

The Guardian also gathered that the issue between MTN and Globacom had to do with interconnection charges.

An interconnection charge is a fee levied by a network operator on another service provider for terminating calls on its network.

Last year, The Guardian had reported how N30 billion interconnect debt threatened the harmonious relationship among service providers in the country.

It was gathered that MTN, the nation’s largest operator, with about 60 million subscribers, was being owed a cumulative figure of N13.6 billion.

The former General Manager of MTN, Funmi Onajide, had said that “If the trend is not curbed, industry sustainability is at risk, most especially from the imbalanced equation of higher CAPEX/higher OPEX versus lower revenues.”

Speaking at a high-powered stakeholders’ forum in Lagos last year, Abimbola Akeredolu, partner in the law firm of Banwo and Ighodalo, pointed out that approximately 60 per cent of these debts are disputed, as many telecoms operators alleged that the figures are inflated.

Akeredolu further explained that the large volume of interconnect debts was often linked to sharp difference in revenue sharing ratios between mobile operators and other landline network owners and fixed wireless operators.

Meanwhile, at the ATCON’s event, the Chief Executive Officer (CEO) of Airtel Nigeria, Segun Ogunsanya, lamented the current harsh business climate in Nigeria, stressing that the foreign exchange regime has affected operators, especially in the procurement of equipment.

He called on government to consider the plight of investors and relax the regime.

Joining Ogunsanya on the issue was the CEO of VDT Communications, Abiodun Omoniyi, who also stressed the need for players in the industry to have access to foreign exchange without hiccups.

Omoniyi, who stressed that FOREX access was critical to the industry, noted that the problem around it has become quite worrisome and “getting out of hand.”

Danbatta however, assured that the President Muhammad Buhari led regime was doing everything possible to revive the economy so as to be able to encourage local investors and at the same time attract foreign players to the sector and the economy as a whole.

  • real

    Everyone complaining about forex. They fail to understand that we have a limited supply of forex because the country is not earning enough, yet we are spending massive amount of it on importation. it is time all this corporations and businesses start to focus on reducing their forex demand by sourcing raw material locally, producing what they need locally or investing in companies that can produce what they need.

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