Business News of Monday, 12 January 2015
Parliament has ordered the National Communication Authority (NCA) to re-engage telecom companies in negotiations toward issuance of the controversial interconnect clearing house licence, B&FT has gathered.
The decision of the Parliamentary Select Committee on Communication is expected to be communicated to the NCA this week. This follows a petition by Ghana Telecoms Chamber over establishment of the clearing house.
Several meetings between the telecom operators and the regulator on the proposed establishment have ended inconclusively.
The NCA is close to awarding the country’s first interconnect clearing house licence by February 7 this year, to provide a common independent mechanism that accounts for billing and settlement of interconnected traffic for all existing and future operators in the country. The clearing house will take over all the functions relating to preparation of billing information and reconciliation reports, and the reconciliation process itself.
The NCA is convinced introduction of clearing house operations into the country’s telecom space will help to address some of the discrepancies in interconnect charges among operators.
However, telecom sector operators have kicked against the decision to award the clearing house licence, which will be granted for a term of 10 years subject to renewal — describing it as an “imposition and interference in their operations”.
At a recently held forum on the subject, Obafemi Banigbe — Chief Operations Officer of Millicom Ghana Limited, operator of tiGO — explained that mobile network operators are in sync with the Authority on the idea of a clearing house, adding: “Routing traffic through a clearing house should be a business decision and not a regulatory one”.
Mr. Kweku Sakyi-Addo, CEO of Ghana Telecommunication Chamber — the lobbyist arm of the network operators — said the NCA has had minimal consultations with network operators on the clearing house concept, advising the Authority to be cautious in licencing the clearing house operator; especially as few countries across the world have bought into the concept being pushed through by the ITU.
Local mobile content providers who work in tandem with the mobile operators have also expressed their displeasure with the intended interconnect clearing house.
Director, Corporate and Regulatory Affairs for Wireless Application Services Providers Association of Ghana (WASPAG), Conrad Nyur, told the B&FT the move could rather be detrimental to the fortunes of the value added service providers — a position contrary to assertions by the regulator that the interconnect clearing house will boost local content in the telecoms sector.
He said the coming of the ICH will increase VAS operators’ cost of doing business, which is likely to wipe out the entire sector should ICH become a reality.
“NCA should make it clear that VAS is not part of it. No legal action can be taken against them when their action does not affect us; but if it should, then we will. The court of public opinion will also deal with them,” Mr. Nyur added.
But the Director, Legal of the NCA, Abena Asafu-Adjei has said that the Authority is resolved to authorise a clearing house operation in the interest of consumers, saying: “NCA is doing this for the betterment of the consumer, so they should not be made to feel that the Authority is imposing this so that consumers will be made to pay more”.
In the existing interconnection scheme adopted by telecom operators, peer-to-peer (p2p), each service provider has directly connected some of its switching centres to that of other service providers within the same geographic location.
For instance, in a geographical location like Accra there are about 32 links between operators due to multiple switch locations of some operators. The NCA plan of a clearinghouse will eliminate all these links as all calls will be routed through the ICH, onward to their destination.
But the Telecoms Chamber in its response to the NCA said the establishment of the ICH will create a single point of failure for all interconnect traffic in the country, with huge revenue loss implications.
The Chamber’s response to the NCA sighted by the B&FT said all interconnection traffic for all subscribers in Ghana and those connecting to and from Ghana can at any point be lost completely should there be a failure of the clearing house network.
The single point of failure, the telecom operators said, may occur as a result of transmission links or power to the clearing house going down, software and hardware failure, scheduled outages, and inability of the clearing house to operate.
According to the NCA, the current interconnect system (peer-2-peer) “is complex to manage, expensive to implement by new entrants, and prone to link-failure as it has caused major network outages over the last years”.
But the telcos also argue that the present p2p system was a requirement of the regulator, and as such was very costly in building. The Chamber argues that scrapping the p2p will cost the telcos millions of dollars worth of investment.