In a bold move that could disrupt Nigeria’s telecom landscape, the Nigerian Communications Commission (NCC) has ordered MTN Nigeria to sever ties with Exchange Telecommunications Limited due to unpaid interconnect charges. This unprecedented action follows months of unresolved debts that could shake up how international calls are routed from Nigeria to the rest of the world.
The decision was officially communicated through a statement issued by the NCC’s Director of Public Affairs, Reuben Mouka, on December 27, 2024. According to the statement, the disconnection will take effect after five days unless Exchange resolves its outstanding debt. This means that MTN Nigeria will be forced to find alternative means of interconnecting with international networks to carry both voice and data traffic.
“This disconnection is a necessary action to enforce the financial agreements between the two companies,” Mouka said in the statement. “Despite several notifications, Exchange Telecommunications has failed to settle its interconnect charges. This is a clear violation of the Nigerian Communications Act, 2003.”
The root of this issue lies in interconnect charges, a standard fee that telecom companies pay each other for exchanging calls or data across networks. MTN, one of Nigeria’s largest mobile network operators, has relied on Exchange Telecommunications to transmit international calls originating from mobile users in Nigeria. Exchange has been a crucial link in the telecom supply chain, managing the flow of international calls to and from various mobile networks in the country.
However, the relationship between the two telecom giants has soured over unpaid dues, with Exchange failing to meet its obligations. Despite being given ample time to resolve the debt, the company has reportedly failed to provide a satisfactory explanation or payment.
A Vital Link to the World
Exchange Telecommunications is not just another player in Nigeria’s telecom sector. The company is vital to the international call infrastructure of the country. It is the sole carrier that transits calls from all mobile network operators (MNOs) in Nigeria to international destinations. The company plays a pivotal role, handling a significant portion of Nigeria’s outgoing international voice and data traffic.
“Exchange is the only company handling international calls for all the major Mobile Network Operators in Nigeria. This disconnection could have significant implications for the flow of international communications,” said an industry insider who requested anonymity. “MTN will now have to rely on other service providers, which could lead to service disruptions and increased costs.”
This sudden disruption comes at a time when Nigeria’s telecom industry is grappling with various challenges, including rising operational costs, regulatory pressures, and mounting competition among mobile network operators. For MTN, which has a large customer base, the move to disconnect from Exchange Telecoms may lead to operational delays and affect their international call services.
Impact on Users and Other Operators
MTN’s customers may see disruptions in the quality of their international calls and data services if alternative interconnection methods are not swiftly put in place. The disconnection could lead to higher costs for MTN, which will now have to rely on other network service providers to transmit its international traffic.
“We are in the middle of a digital revolution, and such disruptions can affect user experience and satisfaction. The real impact will be felt by the consumers who may face poor call quality or even outright service interruptions,” said a senior telecommunications analyst, Dr. Joseph Nwankwo. “If MTN doesn’t find a reliable alternative quickly, it could hurt their reputation in the competitive telecom market.”
For other mobile operators, the disconnection could present both opportunities and challenges. Some smaller telecom companies might seize the opportunity to expand their interconnect services, while others may struggle to meet the sudden demand for international routing.
NCC’s Tough Stance
The NCC’s intervention is not the first time it has had to step in to regulate the telecom industry. In recent years, the commission has been active in ensuring that telecom companies adhere to financial obligations, especially in cases of interconnect charges. The NCC has a long history of using its authority to enforce financial discipline within the sector.
The Nigerian Communications Act, 2003, provides the legal framework for regulating interconnection disputes, and the NCC has the authority to disconnect telecom operators who fail to honor their interconnection agreements. This new move signals the commission’s growing assertiveness in regulating the industry and ensuring that telecom operators adhere to financial commitments.
“The NCC will not hesitate to take decisive actions against any operator that fails to comply with the established financial guidelines,” Mouka stressed. “This decision follows a thorough investigation and ensures that no operator is allowed to act irresponsibly at the expense of others in the industry.”
