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Infrastructure leasing debts push telecom debts to N165 billion

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Telecoms industry.

Contrary to widely perceived belief that interconnect debts in the telecommunications sector account for greater percentage of telecom industry indebtedness, Nigeria CommunicationsWeek’s investigations have revealed that infrastructure leasing debts is the biggest and threating service delivering.

It was gathered that of the N165billion telecom debts profile as at the end of 2018, interconnect debts account for N25billion while N140billion is owe to infrastructure providers.

Infrastructure leasing debts arises from renting of space by telecom service providers from infrastructure providers such as IHS, ATC among others at their towers as well as trunk ducts and circuits for long distance traffic transmission.

Confirming the figures, Ike Nnamani, managing director, Medallion Communications, interconnect clearing house operator, said: “People talk of telecom debts as interconnect, interconnect debts are actually less than 10 per cent of the debts. Out of the N165Billion debts in the industry, interconnect debts is about N25Billion, and N140Billion is actually owe to infrastructure service providers by operators for cell sites rent age and others.”

More so, a staff of Helios Towers who does not want his name in print corroborated the figures but added that it was against the high debt profile owe to infrastructure leasing companies that NCC granted them permission to disconnect the affected service providers since the industry rules does not allow infrastructure companies to disconnect service providers unilaterally.

He identified 9mobile and Smile Communications as the highest indebted service providers and noted that the situation is affecting their operations as they are owing tower maintenance contractors as well as to honour their loan repayment agreements which are mostly foreign and that they access foreign exchange from parallel market which is expensive.

Engr. Gbenga Adebayo, managing director, Communications Network Support Service Ltd (CNSSL) said that though telecom industry debts have not been brought to stakeholders for discussion and that the discussions have been at different clusters.

According to him, “cost of leasing trunk circuits for carrying traffic for long distance services should be looked into in relation to the revenue service providers get from the service.

Today, some operators lease trunk circuit from owners who are also service providers at high cost and also completing with them to deliver the same service at the end of the day loose revenue.

“Why would transmission of bandwidth between Lagos and Abuja be more expensive than from London to Lagos? My take is that people should pay what they owe and open discussion with their creditors for review so that the industry can move forward.”

He urged Nigerian Communications Commission (NCC) to look at the obligations of her National Carriers license which comes with responsibility of providing service providers transmission infrastructure especially in the interest of smaller operators that does not have enough subscribers to meet up with the cost of trunk circuit in the market.

“On the tower debts, this is willing buyer, willing seller arrangement and should not witness huge debts, surprisingly, that sector is deregulated with many operators. Parties should sit down and discuss on how to pay their debts,” he said.


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