ICT Africa Headline News

NCC Plans Regulatory Framework for $200 Million Vas Market

10 August, 2014

Source: The Guardian

By Adeyemi Adepetun and Faith Oparaugo:

THE Nigerian Communications Commission (NCC) has expressed readiness to create an industry driven regulatory framework that will see to the sanitization the country's Value Added Service sector (VAS), estimated to worth $200 million.

The Nigeria's VAS market is expected to hit $500 million in few years time. VAS is a popular telecommunications industry term for non-core services, or in short, all services beyond standard voice calls and faxes transmissions.

However, it can be used in any service industry, for services available at little or no cost to promote their primary business. In the telecommunication industry, on a conceptual level, value-added services add value to the standard service offering, spurring the subscriber to use their phone more and allowing the operator to drive up their Average Revenue Per User (ARPU). For mobile phones, technologies like SMS, MMS and data access were historically usually considered value-added services, but in recent years SMS, MMS and data access have more and more become core services, and VAS therefore has begun to exclude those services.

According to the Executive Vice Chairman of the NCC, Dr. Eugene Juwah, who disclosed the potential in the country's VAS market during an interactive session with operators and mobile network operators (MNOs), on the regulatory framework for the VAS segment of the industry in Lagos, said the segment needed to be regulated for it to attain its full potential.

Represented by the Executive Commission, Stakeholder management at NCC, Dr. Okechuwkwu Itanyi, Juwah said the forum was aimed at presenting the commission's findings of some unethical conducts in VAS provision and chart a way forward in the VAS segment of the Nigerian telecoms industry.

"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."

The NCC boss said noted that given the decreasing ARPU, in the voice services owing to increased competition, telecoms service providers in Nigeria now see value added services as a new vista of opportunity to add a new revenue stream for the mobile network operators.

"According industry experts, mobile VAS is currently worth over $200 million annually with huge potential to accelerate to $500 million in the next few years," he said.

Juwah, however, said based on the impressive value of the market, "we must seize the opportunity to ensure the right market practices by the operators in the VAS segment of the telecoms industry to enrich the consumers total quality service experience."

He noted that, recently, the industry has witnessed some practices and behaviors in the VAS segment, which a, as individuals subscribers and as industry regulator have given us lot 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 look-in of subscribers by the VAS providers," he said.

In his submission, the National Coordinating Consultant, Wireless Application Service Providers of Nigeria, WASPAN, Simon Aderinlola, harped on the need for the NCC to look into the area 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.

Meanwhile, the Head, Compliance Monitoring and Enforcement at NCC, Efosa Idehen, has stated that the ultimate objective of the interaction was not top witch hunt any mobile VAS providers or MNOs but "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.

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