The move to bring Value Added Service Providers under regulation by the Nigerian Communications Commission has not gone down well with the operators who voice suspicions and fears, which are reasonably not unfounded. Will the regulator shift ground? SAMSON AKINTARO reports.
At the beginning, it was an atmosphere full of conviviality. Of course, that was not unexpected, given that the regulator, Nigerian Communications Commission, in keeping with its long-standing participatory regulation policy, was meeting with its operators, the Value Added Service (VAS) providers, to deliberate on how best they can be regulated. But that was just before the business of the day proper.
The usual opening keynotes had come and gone and then the tone for the day was set with the presentation of the draft regulatory framework for VAS by Engr. Stephen Bello, a former acting EVC of the NCC and a consultant to the Commission. Interjections from the audience, which comprised mainly of VAS providers, while the presentation was on-going, had already indicated where the operators stood regarding the regulation. And when the floor was opened for comments and observations, it became clearer that the VAS operators were averse to most of the provisions of the regulation.
Background to the regulation
Over the years, there had been avalanche of complaints over the menace of unsolicited text messages that flood customers’ phones which in most cases emanated from the VAS operators through the Mobile Number Operators’ (MNOs) networks. According to the commission, this included several complaints from the public against perpetuating frauds through short codes assigned for Value Added, fake bank credit alerts, anti-competitive activities etc.
Consequent upon this and the fact that the Value Added Services industry is beginning to approach maturity, the Commission said the sector is ripe for regulation, in order to protect, balance and reconcile stakeholders’ interests. In doing this, the commission had developed a market structure with three pronged value chain which it believes will help it easily perform regulatory oversight functions. They include VAS and content developers, VAS hosting service providers and Network operators
According to the new structure as proposed by the NCC, VAS Developers are owners of a unique content or application who would also have additional responsibilities for registration of copyright for their VAS /content and its protection against copyright violations and all other related legal issues; obtaining third party authorization for their content/VAS where required and register with Corporate Affairs Commission as a corporate body because the commission would place them under a class license. The VAS service hosting providers are to be providers of software and hardware platforms for hosting VAS and providing transmission links to network operators.
Operators’ Kick
While a few of the operators had registered their displeasure with some provisions of the regulation through comments made on the regulator’s portal before the interactive forum, the meeting afforded them the opportunity to say it to the regulator’s face and they minced no words in doing that. According to them, the regulation does not does not recognise the current category of players in the sector that should benefit from the policy.
Specifically, Mr. Chika Nwobi, the Managing Director of M-Tech Nigeria Plc, noted that the objective of the regulator in coming up with the regulation in the first place, which is to address the problem of unsolicited text messages, was wrong. “Why should that leading to the creation of a new structure for the sector? Besides, the issue of unsolicited message is a technical problem that requires technical solution, not regulation” he said.
But for the National Coordinator of Wireless Application Service Providers of Nigeria (WASPAN), Mr Chijioke Ezeh, it was not about the local VAS operators but about the thousands of Nigerians that would lose their jobs if the regulation, which he described as favouring foreign players, comes into effect. “We (VAS operators) employ about 9000 people directly and about 85,000 indirectly, what we need is protection, not a regulation that will push us out of operation”. According to him, the regulation would also stifle innovation in the country. But Eze did not end his comment without making one critical request: “The draft framework should be set aside and let the stakeholders sit and brainstorm for better solutions”. Other players were also of the opinion that the regulator should put the regulation on hold and allow the players continue with their efforts at addressing the industry challenges.
ALTON Reacts
Meanwhile in a joint statement presented by its Chairman, Engr. Gbenga Adebayo, the Association of Licensed Telecom Operators of Nigeria, ALTON, which is the umbrella body of all the MNOs, also expressed concerns over the new policy framework for VAS. According to the Association, the NCC had come up with the new regulation to address the complaints from the public; prevent “service users” from using short codes to perpetuate fraud; and addressing the menace of unsolicited text messages that flood customers’ phones.
“Alton members are more severely impacted by the problems listed above than any other group of stakeholders in the industry. Why? : For us, anything that affects our customers’ satisfaction affects the sustainability of our investments. It affects our ability to attract new investments required to meet growth objectives. It affects the reputation of operators and further affects our goodwill and it affects the future of our industry. We are of full accord with the Commission that these problems must be solved as quickly and efficiently as possible. Therefore, the NCC can account on our 100% support on this.”
While listing some of the efforts already put in place to address the problem, ALTON frowned at the NCC regulation, saying, it has “made very sweeping provisions, with very severe implications for overall industry sustainability. This makes us wonder what the true objectives of the Guidelines are.” For instance, on the new structure being proposed, ALTON said: “A new industry stricture is being proposed – the Commission has however not done any comprehensive market study that we are aware of. This is necessary as mandatory first step to determine what faults there are in the market and how to intervene. In any case we find no correlation between the proposed market structure and the principal objectives of the Guidelines, which is to address issues of abuse of customer rights.”
On restriction of MNOs from providing VAS, the Association said: “Contrary to the terms of our operating licenses and the Unified Access Licensing Framework, the Guidelines proposes to bar operators from providing Value Added Services and to limit them to caller ring back tones and two other VAS! We wish to state that this is most unacceptable to our members.”
WASPAN Too
Also in a statement, the umbrella body of all the VAS providers in the country, WASPAN, categorically defended its members as legitimate business people who would not do anything to disturb or defraud Nigerian mobile users all in the name of doing business. “In addition to our Value Added Service (VAS) business expertise, we also stand for the promotion of healthy public perception of value-added services and promote individual member-firms’ interests on a level playing field. Our members have individual business agreements with all MNOs in Nigeria: MTN, Airtel, Globacom, Etisalat, etc.” the group said.
“In the spirit of promoting healthy public perception of Value Added Services, WASPAN is concerned with the barrage of complaints that Mobile Subscribers have about VAS such as Unsolicited Calls and SMS, spamming, forced activations, deduction of call credit etc. We had addressed these issues in recent past and will going forward invest more in educating mobile subscribers and help them to be better informed and become more savvy in the use of their mobile phones and services that can better enhance the quality of their lives.”
They noted that WASPAN, the Mobile Network Operators and NCC have taken active steps to arrest the situation of unsolicited calls and messages through relevant solutions with a view to protecting and educating mobile subscribers and customers. Some of the steps taken, according to WASPAN, include: No marketing SMS or Calls before 8am and after 8pm; Do-Not-Disturb (DND) option, among several others.
Discussions Continue
With the barrage of complaints and criticism trailing the draft regulation, the regulator may have no choice than to go back to the drawing board and re-strategise on the best way to bring the VAS sector under regulation. Indication for this has already emerged from the concluding remarks of the NCC’s Director of Licensing and Authorisation, Ms Funlola Akiyode, when she declared that discussions and consultations would continue on the way forward. We came up with this regulation following international best standard practices. It is not in our intention to stifle innovation. Therefore, this should not be seen as the final document, it is work in progress and consultations will continue” she said as she wrapped up the tensed session.