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Wednesday, March 18, 2009

Interconnect rates review: NCC appoints Detecon, PriceWater advisors

Telecommunications regulator in the country, Nigerian Communications Commission (NCC), has appointed two firms, Detecon International and PriceWaterHouseCoopers, as consultants and advisors to the Commission for the review of current interconnection rates among the Nigerian telecom service providers.

Acting Head, Public Affairs at NCC, Mr. Reuben Muoka, told ITRealms Online that the two consulting firms are to conduct cost study as well as international benchmarking studies as a follow up to the one conducted in Nigeria in 2006, which led to the enactment of the existing fixed and mobile termination rates in the country.

He explained that the consultants would be having sessions with the operating companies during the months of March through April 2009, while their reports would be submitted to the Commission before end of April, 2009.

The Commission said that with the growth of the nation’s subscriber base, and changes experienced in the operating environment, it has become necessary to review the interconnect rates so as to be in tune with current realities.

Commenting on the development, the Chief Executive Officer and Executive Vice Chairman of the NCC, Dr. Ernest Ndukwe said they were happy for the emergence of the two internationally reputed firms.

“We are happy that the two well respected international firms are involved in the study and we expect the operating companies to give the consultants full cooperation,” he said, soliciting the support of operators.

Interconnect rates are the rates which service providers pay to each other for terminating calls on their fixed or mobile networks.

This is one of the steps by NCC to enshrine its independence drawn as the national regulatory authority for the telecommunications industry in Nigeria.

The Commission is responsible for creating an enabling environment for competition among operators in the industry as well as ensuring the provision of qualitative and efficient telecommunications services throughout the country.

The mission of NCC, he further said, is to support a market driven telecommunications industry and promote universal access.

Meanwhile, a one-day Information and Communication Technologies (ICT) stakeholders forum recently held at Abuja, ended with participants affirming that the sector in Nigeria has advantage over the current recession.

A communiqué issued at the end of the session concluded that the Nigerian telecom industry would not be a casualty to the global economic recession as so long as operators continue to expand their services and creatively providing the Nigerian public with the quality and innovative services that would meet their demands.

Experts who spoke at the forum, noted that this is because the recession is not likely to affect the demand for people to make calls, but rather people would prefer to make more calls than travel.

It was a consensus at the forum hosted by the Nigerian Communications Commission (NCC), with chief executives of the key operating companies and economic experts in attendance, that the sector would indeed provide a lever upon which other sectors of the economy could hold-on to mitigate the impact of the economic meltdown.

But the emphasis was that government must keep an eye on industry because of its potentials to improve the national Gross Domestic Product (GDP), in a nation where the telecom revolution had energized the economy in the past seven years.

There were also submissions from the operators regarding what the government and the regulator would need to do to ensure that the sector is not affected.  In effect, even if the recession affects the industry, it is not because the stakeholders were unable to foresee the situation.

Speaking at the forum on his return from the recently held Mob0ile World Congress in Barcelona, Spain, the Executive Vice Chairman (EVC), NCC, Dr. Ernest Ndukwe, said that the Commission is being proactive by examining the impact or otherwise of the on-going recession.

“What we are trying to do is to be proactive and look at possible actions that will help mitigate this recession in the other sectors of the economy rather than wait and take no action,” he said.

The Abuja forum further accept the fact that the telecom industry is very vital to the Nigerian economy, government must continue to closely monitor the industry, while the operators must not slow down on the investments required to meet the expanding demands of the Nigerian ICT industry.

Reiterating the need to attend to the provisioning of policy and regulatory challenges and needs for the industry, Ndukwe pointed out that it not a surprise that Nigeria is currently feeling the effects of this global crunch as the  global oil and gas sectors have been severely hit and as a result, the Federal Government revenue earnings have sharply declined as the oil and gas sector, as we all know, remains the largest revenue source for the nation and that decline in government revenue and tax receipts will no doubt result in ripple effects on various sectors of the economy.

“The ICT sector by its nature is critical to development of any modern nation.  I wish to stress that in this period of global crisis, the continued success of the Nigerian ICT industry is critical to the nation’s ability to ameliorate the effect of the global economic crisis on Nigeria. Not surprising, there have been concerns voiced within Nigeria, on the impact that the global economic downturn is having or will have, on the continued expansion and growth of the ICT industry in Nigeria,” he said.

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