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Published On: Thu, Mar 15th, 2018

NCC Telecoms Corporate Governance Code: An Industry Sanitizer

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Nigerian Communications Commission (NCC)

Nigerian Communications Commission (NCC)

By Etuka Sunday

The Nigerian Telecommunications Commission (NCC)’s Code of Corporate Governance for the Telecommunications Industry is one that is expected to reposition the sector on the part of sustainable growth.
The Code is well tailored to eliminate “sharp” or unethical practices in the sector. It is meant to frustrate activities of fraudsters who are so determined in using the identified gap in the sector to defraud Nigerians.
With over 140 million subscribers as at December, 2017, out of which 98 million are internet subscribers, the Code becomes necessary to address the ethical issues in the industry.
The code is intended to present a win-win model of inter-relations, predicated on openness, accountability, transparency and integrity.
The code is currently undergoing review by the telecoms stakeholders so as to have a transition from its current voluntary state to a mandatory regime.
Executive Vice Chairman/CEO, Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta disclosed that since its inception in 2014, compliance with the provisions of the Code has been voluntary, aimed at availing sector operators’ adoption and adaptation over time.
However, after two years of adoption of the Code, it became imperative to carry out a study to ascertain the level of adoption and compliance with the provisions of the Code, and to have key elements of the Code reviewed in the light of observed peculiarities and current international best practices.
He said, the outcome of the survey revealed that there were significant deviations from the key principles contained in the Code.
There was therefore the urgent need for all operators to fully align with the principles contained in the Code in order to ensure that the industry moves on the same trajectory of institutional resilience and stability. It is against this background that it became imperative to move from a voluntary to a mandatory regime.
He said, the Commission considered the transition from a voluntary to mandatory regime a significant milestone requiring consultations with a wide spectrum of stakeholders for support, contribution and critique in order to produce a final document with industry ownership.
In this regard, he said, a stakeholders’ forum was held in June, 2016 to galvanise the views of key stakeholders for the enrichment of the code. With this development, the Commission is emboldened to develop and strengthen the mechanism for encouraging and rewarding corporate ethical behaviours, while setting out to monitor overall compliance with the key provisions of the Code.
He said, while the renewed approach is aimed at driving down overall corporate management risks and vulnerabilities, it is hoped that the revised Code of Corporate Governance would not only assist in enhancing business prosperity and corporate accountability, but help in consolidating on the gains of the telecoms sector to the nation’s economy and attract stronger stakeholders’ support.
In accordance with Principle 1.2 of the Code, compliance is mandatory for all Licensees that meet one or more of the following criteria: spread of operations of the Licensee covers a minimum of 3 geo-political zones, turnover of the licensee is in excess of one (1) billion naira, the number of staff employed is in excess of 200, and where the Licensee has a subscriber base of 500, 000 or more.
A licensee shall indicate its level of compliance with the Code in its Annual Compliance Report submitted to the Commission.
NCC said non-compliance with the Code would attract appropriate sanctions in accordance with the Enforcement Processes Regulations, and/or as may be specified in any applicable legislation or regulation.
The code would make it difficult for anyone to serve as a director in Telecommunications Company for more than 15 years.
Another benefit of the code, as it was learnt, is that the position of Chairman and Chief Executive Officer shall not be occupied by an individual concurrently in any telecom company in the country.
Industry Experts expressed satisfaction with the Principles of the code, saying that it would encourage a reasonable system of governance in the telecoms industry.
The Chairman, NCC Board of Commissioners, Sen. Olabiyi Durojaiye said, the code would eliminate “Sharp Practices” in the industry.
He said the scenario where fraudulent Nigerians would be using foreign phone numbers to defraud people, would be checked by the code.
The President of the Nigerian Bar Association (NBA), A. B. Mahmoud (SAN) said, “the code meets the basic requirements of good corporate governance, but there are clearly areas of improvement.”
The radiating joy from telecoms industry stakeholders in Kano last month was a great sign to mean that the code would be widely accepted, if made mandatory.
The Commission was in Kano to sensitise the industry stakeholders and general public of the existence of the code; efforts geared to rid the sector of existing sharp practices and reposition it.
Prof. Danbatta said in Kano that the Code will lead to improvement in the sector growth trajectory and overall contribution to the GDP.
He said NCC is committed to deliver regulatory excellence and facilitate operational efficiency, geared towards making the sector attractive to drive the level of investment and capital inflow needed.
“The Commission is determined to provide needed regulatory interventions to ensure that the sector plays effectively the enabling role it is mandated to create by the Act, the NCA 2003. It is currently rejigging its regulatory oversights in the areas of ensuring that consumers get cost effective value for money spent on telecommunication services; and that service delivery by providers are qualitative and efficient,” he said.
The NCC boss said, “towards empowering the consumer, the Commission initiated the Do Not Disturb (DND) facility and the short code 2442 as toll free portal to moderate incidences of unsolicited messages. It also hyped its second level consumer complaint toll-free line short code 622 towards addressing unresolved consumer complaints on service failures.
“Issues of Quality of Service and factors affecting it are being aggressively tackled including by means of engagement with the tiers of government to address issues of Security, Right of Way, Multiple Taxation and Multiple Regulation, etc.
“In pursuit of its defined goal of regulatory operational efficiency, it has initiated international consultancies for the review of the Mobile Termination Rate (MTR) and International Termination Rate (ITR); and also for the determination of cost based pricing for retail broadband and data services.
Just recently, the Commission sanctioned some Telecoms Operators involved in fraudulent practices. This was due to complaints received from service providers and consumers regarding the high incidence of call-masking, call-refiling and SIM-Boxing.
It said, generally, the practice complained of involves disguising international calls as local calls in order to profit from price differentials between international and local calls.
The Regulator said, apart from the resultant loss of revenue by service providers, the practice also has some negative security implications.
It said, following a painstaking investigation process which included collaboration with the Office of the National Security Adviser (NSA) and the Department of State Services, the Commission has imposed a range of sanctions on licensees involved in the fraudulent practice. These include the following sanctions:
Suspension of the Interconnect Clearinghouse License issued to Medallion Communications Limited for a period of 90 (ninety) days, in the first instance;
Issuance of a strong warning to Interconnect Clearinghouse Nigeria Limited;
Disconnection of Information Connectivity Solutions Limited (ICSL) and Solid Interconnectivity Services Limited from all networks, until they regularize their operations;
Issuance of letters to Exchange Telecoms Limited, NiconnX Limited and Breeze Micro Limited, cautioning them against engaging in the fraudulent practice; and
Barring of over 750,000 numbers assigned to several Private Network Links (PNL) and Local Exchange Operator (LEO) licensees, which number ranges were found to have been utilized for the practice.
The sanctioned entities were found to be directly and indirectly complicit in several infractions, including, covertly allowing organisations with expired licences to transit calls, failure to undertake due diligence on parties seeking to interconnect, deliberately turning a blind eye to masking infractions by interconnect partners, and using a licence issued to another organisation to bring-in and terminate international calls which were masked as local calls to other operators.
Regarding the barring of numbers, over 750,000 individual numbers across the nation, made up of about 31 number ranges have been barred.
The licensees whose numbers have been barred are: Vezeti Communications Services Limited, Voix Networks Limited, Mobitel Limited, Peace Global Satellite Communications Limited, ABG Communications Limited, Vodacom Business Africa (Nigeria) Limited, Swift Telephone Networks Limited, QVODA Telecoms Limited, Wireless Telecoms Limited and Emcatel Networks Limited.
The Commission found that some of these were terminating millions of minutes, whereas they only have very few active customers.
The Commission is pleased to note that the incidence of call masking has significantly reduced since it commenced a multi-faceted approach to address the menace.
The Commission hereby informs all stakeholders that the actions so far taken are just the first stage of the exercise. The second stage which has now commenced will focus on the Mobile Network Operators and other persons involved in SIM-Boxing.
The aim of the Commission is to completely stamp out the fraudulent practice in the overall interest of all Nigerians. Accordingly, every service provider that has been sanctioned still has an opportunity to correct the identified anomalies and satisfy the Commission that it should be allowed to continue to operate in Nigeria.
The Commission reserves the right to revoke the licence of such service providers where they fail to take the necessary corrective measures.
It said, in pursuit of the same objective and to encourage sector compliance, the Commission has instituted an annual reward scheme which is an Award of Good Corporate Governance to the most compliant licensee.
NCC is optimistic that the Code of Corporate Governance would ensure that the highest standards of industry transparency, due process, data integrity, disclosure requirements, accountability, and ethics are maintained without impeding enterprise and innovation.

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