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Nigeria: Regulator Champions Cost-based, Transparent Accounting Framework For Telecom Industry

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Nigerian Communications Commission (NCC) is championing implementation of Accounting Separation Framework for the nation’s telecoms industry to ensure that services are cost-based, transparent and non-discriminatory.

The apex regulator revealed this Tuesday at a Workshop on ‘Operators Capacity Building on the Framework For Accounting Separation For The Nigerian Communications Industry,’ at the Colonades Hotel, Ikoyi Lagos.This is in exercise of its regulatory functions as provided for under the Nigerian Communications Act (NCA), 2003, which the Commission considered the need for the implementing an Accounting Separation Framework that outlines the key principle and guidelines required for the preparation and submission of Regulatory Financial Statements (RFS).

Speaking at the Workshop, the Commission’s Director, Policy, Competition and Economic Analysis, Ms. Josephine Amuwa, said  the framework will outline the key principle and guidelines required for the preparation and submission of Regulatory Financial Statements (RFS) for telecom operators.

 “We believe that Accounting Separation Framework will assist in ensuring that charges for telecommunication services are cost-based, transparent and non-discriminatory. It will also assist the commission in the monitoring of operators’ compliance with other regulatory obligations,” she said.

Amuwa added that the operators are expected to reap the strategic benefits of gaining a better understanding of unit costs, cost drivers and profitability of different services from the preparation of Regulatory Financial Statements.

The framework, she explained,  will identify and prevent any undue discrimination or practices that substantially lessen competition such as cross-subsidization, margin squeezes and ultimately, avert probable issues of regulatory overlap arising from the convergence in technology and service offerings that may extend.

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She explained that the Accountıng Separation Framework issued by the NCC provides a comprehensive set of policies and guidelines for generating detailed regulatory financial statements, which will enable NCC to independently analyze revenues, costs and capital employed across different businesses, products and services of the operators.

The Nigerian Communications Commission recognizes the importance of mandating Accounting Separation within the Nigerian Communications industry and engaged KPMG Professional Services to assist in the development of an Accounting Separation Framework.

“While we understand that operators within the telecommunications industry are already preparing and filing 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,” she said.

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