The curious case of Interconnect Clearing House

Recent debate about the Interconnect Clearing House, if not motivated by parochial interests, is necessary. Necessary, primarily because the ICH concept may not be novelty, but it is definitely transformational for our telecommunication industry. So if this debate ultimately educates the public and all stakeholders on the benefits or disadvantages of the ICH, then why not.

To appreciate the concept, there must, first be an understanding of what an Interconnect Clearing House or Interconnect Operator is; and does. Simply put, an Interconnect Clearing House is a common, independent platform for the billing and settlement of interconnect accounting traffic for all existing and future Telecom Operators in a particular country or region. In effect, the Interconnect Clearing House takes over all the functions relating to the preparation of billing information, reconciliation reports and the reconciliation process itself.

So why is it necessary to have one in Ghana? For one thing, it sanitizes the account reconciliation landscape of the telecom industry. The right minutes would be declared and known by all parties putting to rest the perception that the telecom operators have been under-declaring their minutes to the regulator and by extension the State. Secondly, it offers active “simboxing” detection because it is an independent entity and not a direct beneficiary of simboxing activity. Unlike the claim that telecom operators benefit when simboxing terminates on their network, the Clearing House aggressively pursues this illegal activity. Thirdly, the introduction of the ICH provides a much-needed platform for launching value-added products and services through third-party vendors consequently creating employment opportunities.

It would be recalled that, some Ghanaians raised concerns about the current arrangements the Ghana Revenue Authority has with Subah Infosolutions for the monitoring of the telcos for tax collection purposes. It is somewhat confusing that those who kicked against Subah’s operations because of what they believe to be lack of integrity and accountability are also at the forefront of the fight against ICH. My understanding of the ICH in its current form is actually an attempt by the NCA and government to bring more sanity and transparency into the process.

Moving forward, however, some misconceptions about ICH need to be dispelled. (1) There is no reason for consumers to harbor any fears about confidentiality because the same stringent licensing criteria and data protection laws binding telecom operators will apply to the ICH. (2) The ICH is a private finance initiative and comes at NO cost to the taxpayer. (3) The introduction of the ICH will NOT reduce quality of service but rather significantly improve it. As an independent body, it will measure ASR and ACD, report and engage defaulting parties to improve or face sanctions. (4) ICH is NOT an unnecessary level of additional bureaucracy, indeed giving an independent report on minutes usage and conducting revenue monitoring ensures that all minutes are accounted for. The ICH, in effect, is a revenue assurance unit to the regulator and state.

The concept of Interconnect Clearing House for the telecommunication industry is not dissimilar to the Financial Clearing House operated by the Bank of Ghana. Through the Clearing House, the Central Bank regulates the industry and sanitizes the financial transaction landscape. Telecom Clearing Houses exist all over Europe, adding value and quality to operators and consumers.

MTN has signed an interconnect agreement with Interconnect Clearing Nigeria Limited. Currently Celtel remain the only operator not to have signed on in Nigeria.

So yes, debate is good, especially if it is with a view to protecting the public interest.

By: Osman Issah, PMP®, PRINCE2 Pract.

Entrepreneur & Telecom Consultant

Email: info.osman@ymail.com