Business Hilights
Tracking Nigeria's Headline Business News Online

GSM majors by-pass clearing houses, apply direct peering to kill new firms

Operators in internet retailing services are now crying out over what they describe as plans by telecoms giants to squeeze life out of the growing sub sector in internet marketing business.

According to them, most telecoms majors are now by-passing the clearings houses and are adopting direct peering option to the detriment of clearing houses as well making it difficult for emerging small operators to survive.

However, there are some divisions in the views and perception of experts in the issue of direct peering as while some say it is killing business and not part of the regulations, others say direct peering in voice interconnectivity is allowed by law and that the two options co-exist for the growth of the industry.

But a larger group argues that the development is frustrating both data centre businesses and voice clearing house with organized disruptions with interconnectivity which is the main work of clearing houses in the industry.

Taking preliminary inference from the provisions of the Nigerian Communications Commission (NCC) and allied guideline on the establishment of interconnect clearing houses, it is very clear that GSM companies, the main backbone of the industry are mandated to route at least 10% of their traffic through the clearing houses.

But indications are rife that why smaller operators are disturbed is not far from the fact that most of the telecoms are not reaching the mandated volume rather they are routing mostly through direct peering.

Experts say in order to allow the information and communications technology to flourish especially in data centre and local hosting business; cost of in-country connection must be much cheaper than international connectivity.

Pundits are of the view that if all the telecommunications operators are interconnected at the various commercial data centres in the country, the cost of connecting universities and others located outside of Lagos to the data centres for them to host their servers locally will be within reach and encouraging after all.

Chidi Nweme, a senior staff of one the service providers told Business Hilights that time has come for Nigerian content to be domiciled in-country as others have theirs in their country as well including China, India and even South Africa and Egypt.

He said the idea which is cost saving could be realized if the country is well interconnected through the various commercial data centres, telecoms majors and exchange point.”

In his further submission, Nweme advised the government and regulators to among other things urged relevant government agencies to engage GSM majors on how best to resolve interconnectivity issues and drive sharing of fibre optic links.

He said if this is done the way of mast collocation, more costs will be saved and the industry will be better for it