NCC Assures Of Telecoms Environment That Fosters Open And Transparent Financial Reporting
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By Rommy IMAH
The Nigerian Communications Commission (NCC) has said that it is committed to creating an enabling environment for competition among operators in the industry in its bid at ensuring the provision of qualitative and efficient telecommunications service across the country.
The Nigerian Communications Act 2003 provides the Commission with the powers to implement an Accounting Separation Framework which outlines the key principle and guidelines required for the preparation and submission of Regulatory Financial Statements (RFS).
Speaking Tuesday at a workshop on Operators’ capacity building on the framework for Accounting Separation for the Nigerian Communications Industry which held in Lagos, Ms. Josephine Amuwa, Director, Policy, Competition and Economic Analysis at the NCC listed some of the Commission’s key objectives in implementing the Accounting Separation framework.
According to her, the objectives include the provision of an environment which fosters open and transparent financial reporting within the industry in addition to assisting in ensuring that changes for telecoms services are cost-based, transparent and non-discriminatory.
The implementation of the Accounting Separation framework is also expected to assist the Commission in the monitoring of Operators’ compliance with other regulatory obligations. This is in addition to identifying and preventing any undue discrimination or practices that substantially lessen competition such as cross-subsidization, margin squeezes, etc.
She further stated that the need to avert probable issues of regulatory overlap arising from the convergence in technology and service offerings that may extend to the statutory space of other regulators explained why the Accounting Separation framework is being implemented.
digitaltimesng.com understands that Operators will also reap strategic benefits of gaining a better understanding of unit costs, cost drivers and profitability of different services from the preparation of Regulatory Financial Statements (RFS).
But explaining further the rationale for the workshop on operators’ capacity building on the framework for accounting separation for the country’s communication industry, Amuwa noted: “While we understand that Operators within the telecoms industry already prepare and file financial statements as required by the law, reporting at the corporate level presents aggregate information which may not provide sufficient detail for the regulator for analyzing the performance and competitiveness of the markets within the industry.
“The Accounting Separation Framework issued by the NCC provides a comprehensive set of policies and guidelines for generating detailed Regulatory Financial Statements. The statement will enable us independently analyse revenues, costs and capital employed across different businesses, products and services of Operators. These will further provide the Commission with a basis for judging the success or otherwise of its existing regulations such as interconnect obligations, tariff regulations, etc.”
Amuwa said Accounting Separation is a well-established practice adopted by telecom regulators across the world, and considered to be an effective, least invasive and less costly solution to implement in order to meet regulatory challenges.
“The NCC has recognized the importance of mandating Accounting Separation within the Nigerian Communications industry given the changing dynamics and increasing complexity of the operations within the industry and to ward off anti-competitive behavior amongst industry operators.
“Following the tradition of the Commission to adopt global best practices on all regulatory initiatives, we engaged KPMG Professional Services to assist in the development of an Accounting Separation Framework. The Framework was presented at a public forum of industry stakeholders in March, 2015 to obtain inputs regarding the appropriateness of the framework for industry operators,” she said.
digitaltimesng.com understands that the capacity building event was in line with the implementation roadmap, which commenced early in the year with the refinement and update to the Framework to ensure alignment with contemporary realities in the industry.