Home World News Emerging Markets Glo pays up US$1.4 million to MTN Nigeria for interconnection debt fee

Glo pays up US$1.4 million to MTN Nigeria for interconnection debt fee

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Glo Ghana
Glo

MTN Nigeria has reportedly agreed to accept Globacom’s $1.4 million interest payment on its interconnect fees—an amount charged by telecom operators for calls terminating on their network.

Glo’s original debt to MTN in 2012 was about $1.1 million but due to Glo’s delayed payments, the debt accumulated interest over the years.

But on Tuesday, the two telcos reached an agreement for Glo to pay the $1.4 million accrued interest on the debts, while the $1.1 million principal debt still stands.

The Nigerian Communication Commission (NCC), on January 8, served a disconnection notice to Glo, which permitted MTN to disconnect Glo subscribers over years of unpaid interconnect fees.

However, Glo was granted a 21-day extension to reach an agreement with MTN one day before the planned disconnection.

In response to the NCC’s notice, Glo issued a statement claiming they do not owe MTN, which turned out to be a false claim.

Glo’s debts to MTN date back 15 years, with the first reports of Glo falling behind on interconnect fees emerging in 2012. In 2016, MTN reportedly threatened to disconnect Glo over the unpaid fees. In 2019, MTN disconnected Glo from its network for five days, forcing Glo to pay around $1.8 million in owed interconnect fees out of a total $3.12 million it owed at the time. Airtel also threatened to disconnect Glo during the same period.

Glo’s interconnect debt grew over the years because it often made smaller debt repayments when compared with the amounts it owed. However, the NCC appears to be tightening its leash on Glo and other telecom operators in the country. Per local media, the regulator is ensuring that Glo and other telecom operators comply with the market rules and pay their debts.

Ghana

In Ghana, almost all the telcos owed MTN interconnect fees for years. Expresso went out of the Ghanaian market owing every telco interconnect fees. Glo also checked out of the Ghanaian market at the end of general with some unpaid interconnect fees.

In June 2020, the government of Ghana declared MTN a significant market power, and part of the measures to correct the market imbalance was to reduce the amount of interconnect fees the other telcos pay to MTN by 30%. As a results, the telcos saved a total of over GHS86.6 million. But that has not reflected in anyway in their market and revenue positions.

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