The new Value Added Service (VAS) license issued by the Nigerian Communications Commission (NCC) confirming its plans to regulate the VAS industry has generated worries and fears among indigenous players in the sector who see the likelihood of foreign invasion.
BusinessDay investigations on professionals in the indigenous VAS telecommunication businesses can now reveal that these players are of the view that the new license seems unfavourable to the Nigerian economy.
“The NCC needs to tilt its regulation towards the protection of local businesses in the sector, otherwise foreigners will swoop in and hijack the industry. It is illogical to bring up a new document or license that is detrimental to the society at large. Any license at all, should have a good local content policy. Why create a license that prioritises foreign players,” our sources said.
However the NCC has said that the traditional network-centric and facilities-based business model is fast being overtaken by over-the-top, OTT services in terms of volume and turnover and therefore, it was time to coordinate its activities with regulation. According to the commission, it deliberately allowed the value added services industry to develop without any encumbrance or significant regulatory interference.
Nonetheless, it believes that although the VAS industry in Nigeria has grown to a multi-billion Naira industry, as well as also becoming an enabling tool for facilitating efficient operations in other sectors of the economy, it can also be a menace to the society as in the case of constant complaints over fraud carried out through short codes assigned for Value Added Services, unsolicited text messages and calls, fake bank credit alerts and others.
Adebayo Shittu, Minister of Communications said a few weeks ago at a reception held for him by the Association of Telecommunications Companies of Nigeria (ATCON) that he has had enough of spam messages and charged unsolicited services.
“Even as minister of communication, I receive unsolicited messages for which I am charged and it is very worrying and annoying. Within the next few weeks, another meeting will be held to resolve these issues,” he said.
Consequent upon this and the fact that the Value Added Services industry is beginning to approach maturity, the Commission says the sector is ripe for regulation, in order to protect, balance and reconcile stakeholders’ interests.
The commission has therefore 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.
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 authorisation 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.
They will also need to acquire software platform for receiving and processing requests for service via SMS messages and other methods, traffic metering, message logs, transaction accounting, traffic and security management; obtain operating license from NCC; acquire and pay for block allocation of short codes from NCC; manage the assignment of short codes to content/ VAS products being hosted on behalf of developers, among other responsibilities.
Some stakeholders, who will be affected by this new order, have said that the NCC’s action would impoverish their economy if modalities to the licensing did not take some progressive steps. Of particular concern to them is the licensing of a VAS service-hosting provider, who with the new license, will now act as a middleman between the VAS operators and the network operators.
It should be recalled that the VAS operators are currently battling with the network operators to have the current revenue sharing formula reviewed upwards to better their lot, therefore, in their own estimation, unless the project is being sponsored by enemies of local content, the license currently in use by VAS operators is in order, to stimulate more growth in the industry.
In its view, the Wireless Application Service Provider’s Association (WASPAN), which is the industry body for value added services says that a VAS developer does not need a license to function effectively.
“WASPAN is in no support of VAS Developers, businesses and individuals, who strictly create, develop and provide content and applications to be licensed by the NCC. A good number of them have procured licences for their respective areas of primary business. Licensing those who are core technical service providers will ultimately stifle innovation from that part of the value chain and consequently, their growth,” the association said in a statement.
“In the long run, WASPAN is open to positive change especially such that drives in the same direction as their objectives, but then, they see this development as a discrepancy and a contradiction. Undoubtedly, this new license is being fostered by those who want to undermine the local players to gain off foreigners,” it added.
Jumoke Akiyode
