Monday , October 18 2021

NCC to implement Accounting Separation Framework for transparency, healthy competition



The Nigerian Communications Commission (NCC) has announced plans to commence implementation of Accounting Separation Framework for the Nigerian Communications industry.

The NCC’s Director, Policy, Competition and Economic Analysis, Ms. Josephine Amuwa who represented the EVC, Prof. Umar Danbatta disclosed that the Commission’s key objectives in implementing the Accounting Separation Framework are to provide an environment that will foster open and transparent financial reporting within the industry.

The telecom regulator stressed this at a Workshop on Operators Capacity Building on the Framework For Accounting Separation For The Nigerian Communications Industry, holding at the Colonades Hotel, Ikoyi Lagos.

Accounting Separation is a well-established practice followed by national telecom regulators across the world and it is considered to be an effective, least invasive and less costly solution to implement to meet regulatory objectives. It outlines the key principle and guidelines required for the preparation and submission of RFS telecoms licensees.

NCC Accounting Separation Framework

According to Danbatta, 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.

“The framework will identify and prevent any undue discrimination or practices that substantially lessen competition such as cross-subsidization, margin squeezes and ultimately, avert probable instances of regulatory overlap arising from the convergence in technology and service offerings,” he added.,” she noted.

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Amuwa added that the framework 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.

Speaking further, Amuwa noted 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.

“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.

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.

She defined Accounting Separation as a well-established practice followed by national telecom regulators across the world. It is considered to be an effective, least invasive and less costly solution to implement to meet regulatory objectives.

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.


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