Ike Nnamani, CEO of Lagos based Medallion Communications Ltd, an interconnectivity clearinghouse and data center operator, talks about the industry challenges, recent issues with the telecoms regulator, and the future of interconnectivity in Nigeria in the face of convergence. Nnamani shares industry insights with IT Edge News, Anthony Nwosu, Oluwatobi Opusunju and Chinedu James.
How will you assess your position in the area of market leadership?
As an interconnect company, we are always looking at carrier neutral solutions. We have been in this space for over a decade. Based on the fact that over the last 12 – 13 years, we have focused on carrier neutral solutions in the area of interconnect between networks. Now we are also playing in the area of data centre services. We have been active in the Nigerian ICT space and we are glad we have impacted the market positively in the sector we play in.
Call masking came up some months ago and interconnectivity firms like yours were fingered as culprits by the regulator. What is your take on this?
As a company we have never been involved in call masking, this I would want to make clear. We are happy the temporary suspension that was placed on our interconnect license has been lifted by the regulator but at the same time we have maintained our innocence. No evidence was presented showing that we were involved in call masking. We followed due process in appealing the suspension and upon review it was lifted. That is what the Telecom Act stipulated when there is a disagreement with any decision taken by the regulator. What we were told when we followed the due procedure to appeal was that we had administrative infractions that needed to be fixed. For instance some of the operators connected on our network had licenses that had expired. We believe those infractions should at most have merited a warning letter. But we are happy it has been resolved and we are now able to do our interconnect business. Medallion is a law abiding organization and we have always handled operators’ traffic based on the guidelines for interconnectivity of networks and the operating conditions in our license.
“We, in Medallion are a law abiding organization and we also believe that the regulator did the needful by bringing the issue of call masking to the forefront.”
Is the regulator supportive or you think there’s regulatory high-handedness?
I can say the regulator has very been supportive. We have always maintained a good relationship with the regulator. When some of the dominant operators were trying to frustrate the function of clearinghouses, the regulator stepped in and ensured we all remained in business. We have a direct line of communication with the regulator and that was why we vehemently rebutted the report by one of the media houses that we had attacked the regulator over its handling of the call masking issue. Even if we feel the matter was not handled right by the regulator we have the proper channels to handle that with the regulator and not in the print media.
What are the negative impacts of call masking to the economy?
Call masking is an economic issue and it causes revenue loss to the country. Call masking results from the difference between international and local calls termination rates. When international calls are masked, local call rates apply because the calls are sent into the receiving network with local numbering plan by the originating network. It is an economic issue and people want to make money by presenting calls as local calls instead of international calls and we in Medallion do not support this.
A lot of subscribers prefer making international calls with Calling Cards and various VoIP platforms. These calls are normally cheaper than calls routed through traditional circuits. Quality of the calls or the calling ID displayed at the receiving end is less important to these callers compared with the price of the call. There are diverse categories of international calls and we expect the regulator to categorize these calls and set different termination rates for each category. It is not a one cap fit all pricing. Properly categorizing the various international calls with the appropriate pricing will help resolve the economic incentive that leads to call masking.
“When international calls are masked, local call rates apply because the calls are delivered to the terminating network with local numbering plan by the originating network…..the regulator can address this from an economic perspective or by the use of technologies available to stop this issue of call masking.”
In the absence of finding an economic solution, then technology will have to be used to stop call masking. There are technologies available to stop this issue of call masking. What we should do is to get the solutions or the technology that is needed to stop call masking. The real culprits are still out there. If you receive a lot of international calls you will confirm that call masking is still going on. Ironically the fact that call masking continued when we were suspended was one of the vindications that Medallion was not the one masking calls. I would advise the regulator to deploy the latest technologies that would be used to checkmate the issue of call masking.
Convergence of Industry is here. OTTs are taking over. Will VAS and interconnecting firms like yours still be relevant in the next decade?
With emerging technologies, I think that this is the more reason that the clearinghouses would be needed. These technologies are better managed at the clearinghouses and in a transparent manner. The clearinghouses can manage the technical and commercial side. As a clearinghouse, we ought to be protocol independent and also manage all forms of technologies. Infrastructures of clearinghouse should be robust enough and this would make carriers to come to a clearinghouse. We have invested in the right technology over the years and so Medallion is not worried about future developments in the industry as we are going to remain relevant.
Is Medallion looking at data warehousing in its service portfolio?
Irrespective of what classification people use; be it Tier I or Tier III, Medallion facility is one of the most interconnected facilities in the sub-region. This I can confidently say. We have taken time to create a carrier neutral infrastructure, strictly for the purpose of infrastructure sharing. We have consistently said over the years, we need to spread across the six geo political zones and this is our goal. We are looking at a world class infrastructure that would be spread across the country and this is our goal. We want a situation where operators can peer and connect. As a carrier neutral provider, we don’t compete with operators. That is our level of involvement and we want to remain that way. We currently have a number of operators offering data warehousing services out of the Medallion facility. We will continue to support them without getting into competition with them.
Poor customer service is a problem in Nigeria. What is Medallion doing to change this notion?
We have some of the biggest international players using Medallion facility. This tells you the kind of service we offer. If we can serve them efficiently, there is no local ICT firm that we cannot support. What happened in the past is that there is misconception that we (local firms) can’t get it right when it comes to customer support, but Medallion have changed that perception.
I would say the facilities and infrastructures are here in the country for efficient service delivery so why go overseas? The need to host locally has gone past whether to do it or not, a lot has changed and most organizations are becoming aware that there is high importance to have their data hosted locally. Due to reasons such as cyber security, and some of the laws coming up in international markets, very soon it would be impossible to have your data outside the country. Another reason promoting local hosting is pricing. Exchange rates have made it unprofitable to host overseas. Apart from the capital flight, it would be impacting negatively on your business. Why host overseas when you have a reliable infrastructure here.
Quality of service and the issue of latency also come into place. The closer the content is to the subscriber, the better the quality of the end user experience. Why would you have to go thousands miles to access data and information instead of doing this locally.
From a security perspective, what assurance is on ground for local clients that data warehoused in your facility meet global best practices?
Well, the issue of security is a multilayer thing. First is physical security and we have about 4-layers of physical security in place. We ensure that it’s only authorized personnel that can access the data center. In the area of virtual security, we have in place multiple layers that protect client’s data within our data center. In our data center we have a policy that ensures that only authorized people have access to any information and there are procedures in place going international standard.
There appears to be a disconnection between regulators and operators, how do we close this gap?
It’s a straightforward thing, it is all about engagement. All that is required is interactions to take place. There is need for more interactions between the regulator and the operators. Sometimes, amongst the operators and stakeholders there is no consensus on specific issues so it becomes difficult to engage the regulator from a common front. But there is need for more engagement.
Can the national broadband plan of 30 percent penetration for 2018 be achieved?
There is no clear and accurate data to show the level of broadband penetration in the country or where we are as a country in the area of broadband penetration. But the issue of right of way and its high cost pose a big problem for last mile efforts. If the states lower their right of way cost, that would also increase the broadband penetration. We have encouraged the regulator to intervene in this. The issue of funding is important, it takes a lot of money to roll out these infrastructures and as I said earlier, if the economy is great we can get the funding but the local banks seem not to be interested in this area. All these are impediments to achieving the 30% goal. The conversation is shifting from what the government can do to achieve the broadband penetration to what is the private sector doing. But unfortunately most people are only looking at this from the government side so we are saying that government should provide an enabling environment for this to happen.
“We have some of the biggest international players using Medallion facility. This tells you the kind of service we offer. If we can serve them efficiently, there is no local ICT firm that we cannot support. What happened in the past is that there is misconception that we (local firms) can’t get it right when it comes to customer support, but Medallion have changed that perception….The facilities and infrastructures are here in the country so why go overseas?”