News Column

Bringing Sanity to Telecoms Vas Sector

August 18, 2014

Emmanuel Okwuke

Mobile Value Added Service (VAS) aggregation is a key component of mobile services worldwide and it represents the non-voice services offered by network operators. Experts say mobile VAS has evolved from simple text messaging (SMS), to advanced functions such as mobile entertainment caller ring back tone, push-to-talk, payments, email, instant messaging and m-Commerce, among others.

The VAS segment of the Nigeria's telecommunications industry remains loosely regulated in the past years and this development is breeding unethical practices among the VAS providers.

According to official data, about 6, 706 short codes (CS) have been activated by the telecoms networks to provide all sorts of services on their own and while also working with licensed VAS providers to provide contents for the use of the short codes. The short codes are assigned number bloc that are generated by telecoms networks to deliver various VAS services.

However, because the process of generating the codes is free to the operators, the use of the codes has become prone to abuses as some VAS operators are now operating illegally without proper licensing by the Nigerian Communications Commission (NCC), the industry regulator. Some of these VAS Operators sometimes do these with the connivance of some Mobile Network Operators (MNOs).

For instance, four telecoms and 10 VAS providers were recently fingered in a document obtained from the NCC website. As a result of these unscrupulous practices, the NCC, following compliance monitoring activities, directed all MNOs to disconnect unlicensed VAS aggregators.

Taming the unscrupulous:

According to official data, over 108 VAS providers are duly licensed by the Commission to provide VAS to telecoms consumers using mobile networks. The Commission also identified 10 unauthorised VAS providers. They include: Qrios, Pnvasl, Tvemob, Urfilez, Double U, Velti, Nu Object, SEMA, ISYS and Forget Me Not.

Recently, the NCC organised an interactive session in Lagos with the VAS aggregators and MNOs on regulatory framework for the VAS segment of the Nigerian telecoms industry.

At the event, the regulator disclosed that the volume of business activities taking place in mobile VAS segment of the Nigeria's telecommunications industry is currently valued at $200 million annually, hence the need to have an industry-driven regulatory framework on VAS provision in the country. This revenue is, however, expected to more than double to reach $500 million in the next few years with proper regulatory framework put in place.

NCC moves to sanitise the industry:

In his address at the forum, Executive Vice Chairman NCC, Dr. Eugene Juwah, who was represented by the Executive Commission, Stakeholder management, Dr. Okechuwkwu Itanyi, said the forum was aimed at presenting the Commission's findings of some unethical conducts in VAS provision and seek ways to resolve these issues.

He said the exponential growth in the Nigerian telecom industry, in the last 12 years, has given rise to the evolution of the mobile phone from a device just to support communications requirement to a smart phone with the capacity to provide a plethora of services.

Given the decreasing Average Revenue Per User (ARPU), in voice services owing to increased competition, telecoms service providers in Nigeria now see VAS as a new vista of opportunity to add a new revenue stream for the mobile network operators.

"Based on the impressive value of the market, we must seize the opportunity to ensure that right market practices by the operators in the VAS industry (prevail) to enrich consumers total quality service experience."

Juwah noted that, recently, the industry witnessed some practices and behaviours in the VAS segment, which as individuals subscribers and industry regulator gave them lots of concern.

"The Commission has received avalanche of complaints from Nigerian subscribers regarding forceful activation of various value added services by service providers without explicit consent. Worse still, these services are auto-renewed resulting to perpetual fleecing of subscribers by the VAS providers," he said.

On his part, Head, Compliance Monitoring and Enforcement, NCC, Mr. Efosa Idehen, stated that the ultimate objective of the interaction was "to ensure the provision of fair and transparent value added services to consumers and protect operators' investment for healthy competition in the Nigerian telecoms space."

NCC may tighten regulations on VAS:

The regulator also used the event to present its findings on activities of VAS aggregators in the country. In a revealing presentation on the findings of the regulator, Head, Compliance Monitoring NCC, Mr. Ephraim Nwokenneya, said the regulator was looking for a situation whereby the short codes assigned to VAS Operators are uniform across networks.

"As such, we had to collect all the short codes being used by the mobile networks to know those that are activated and those that are critical. We have done this to ensure that there is minimal disruption to the network. We demanded the list of short codes that have been assigned to the MNOs and to know those for dedicated heath services, emergency operations, customer care services and so on," he said.

Nwokenneya traced the abuse of the short codes to its free nature, hinting that though short codes generation is free, the new regulation might put premium on it. "Short code is free as at today but with every free gifts comes some challenges. So, it may not be free again," he said.

On measures to be taken by the regulator, Nwokenneya said assigned short codes must be utilised to ensure that VAS operators don't hoard short codes; all un-utilised short codes shall be recovered and retrieved; accordingly and harmonised in accordance with the Commission's short code plan while there will also be uniform short code plan for customer care services, billing, airtime recharge, balance check and so on.

Protecting indigenous VAS players:

In his submission, the National Coordinating Consultant, Wireless Application Service Providers of Nigeria, WASPAN, Mr. Simon Aderinlola, stressed the need for the NCC to look into areas of revenue sharing among MNOs and VAS providers in its proposed regulation.

He also noted that there is a need for increased collaboration among NCC and operators to set up a central database centre where unsolicited VAS messages can be screened and monitored, adding that the regulator should protect the indigenous VAS players.

Aderinlola also canvassed for a 'carrier-grade spam filter' to prevent cases of SMS spam, and spam VAS messages and all forms of unwanted SMS emanating from infiltrating into various networks.

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Source: AllAfrica

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