Published on : Nov 14, 2013
The worried discrepancies in the international trade transactions among several telecommunication operators (Telcos) stirred the Nigerian Communications Commission (NCC) to propose a three-year plan to reduce Foreign Exchange (FOREX) remittances among the Telco operators in Nigeria.
Mrs. Lolia Emakpore, the Director, Policy and Competition at NCC disclosed this proposal at a recent stakeholder forum in Lagos – on the ‘Confirmation of Reasonableness of Service Fees.’
Furthermore, most of the discrepancies are based on the international roaming traffic service for Short Message Services (SMS), voice services, and bandwidth service for interconnection, internet, and data traffic services. Some of the other discrepancies also include software license renewal, software purchases for system upgrades, network expansion, Blackberry services, and network integrity maintenance.
According to Mrs. Emakpore, since 2002, the Central Bank of Nigeria (CBN) had appealed for regulatory support and collaboration from the NCC for the Confirmation of Reasonableness of Services (CRS) on transactions related to telecoms. However, to this issue, she insisted that NCC had catered expert advice to CBN on CRS Transactions remittances.
The CRS is completely based on the CBN Regulations on International trade transactions.
Furthermore, Emakpore also said that, NCC has developed the primary guidelines for CRS application processing 2003, further highlighting all the expectations from the vendors, bankers, and the operators in respect of CRS invoices. NCC also superseded the regulatory notice in order to support the Central Bank of Nigeria (CBN).
It was imperative to carry out the CRS function which included checking capital flights, ensuring substantial utilization of foreign exchange (FOREX) by the telecoms companies, encouraging development of local contents and telecoms software skills in Nigeria, control the Forex round ripping, and bridge the gap between CRS remittances and telecoms Foreign Direct Investments (FDI), added Emakpore. She also said that NCC processed the CRS invoice applications into millions of pounds sterling, billions of dollars and Euro currencies. This was due to the increase in software purchase mainly for network expansion. The software remittances accounts for more than 40 percent of the overall cost of CRS processed over the last three years.
According to statistical data, in between the years 2010 and 2013, NCC approved and processed more than 5,580 invoices in the telecoms industry. And more than 745 applications were rejected due to issues such as duplications of invoices, ranging from over-invoicing, integrity tests, and expired contract agreements, said Emakpore.
She also listed a few challenges faced in this industry. The CRS invoices processing brought up issues like over-due invoices dating over six months from the date of issue, lumping invoices for software and the related hardware elements, expired contract agreements, submission of invoices with the job completion date that is over two or three years, the distribution of the same set of CRS invoice applications to two or more banks for processing, bankers request for approvals from NCC regarding the agreements between the vendors and operators.
Emakpore addressed all these issues and announced that henceforth, the invoices submitted to the NCC must not be dated more than six months from the initial date of job completion. Secondly, she also added that the basic operating software with associated hardware components would no longer meet the criteria for CRS processing. And lastly, the initial 14 days processing cycle would be extended to 15 working days.