Telecoms VAS Operators Raise the Alarm over Market Decline

Value Added Service (VAS) operators, who are responsible for content generation in the telecoms business, have expressed concern over sharp market decline in content generation, which they attributed to market monopoly.

They are therefore calling on the industry regulator, the Nigerian Communications Commission (NCC) to quickly intervene in order to save the telecoms market from total collapse.

According to the operators, Nigerian government, along with other African countries, has been lauded for its information and communications technology (ICT) liberilisation policy and for creating competitive environment for the players in the telecommunications sector.

They attributed the tremendous growth of mobile telephony in Nigeria, to the investment drive and collaboration of private mobile operators in the country, especially the contribution of VAS operators in providing relevant content for the growth of the telecoms industry.

Citing a recent paper delivered by the Managing Director of GTS-Infotel Nigeria, Dr. Ing Pierre-François, which observed that in spite of the high growth of mobile subscribers in the country, the specific market of mobile VAS services is not still well structured for a sustainable development of the market segment, as it is still running under a ‘tolerance regime’, the VAS operators have called on the NCC, to take a closer look at some of its policies that are still not favourable to VAS operators in Nigeria.

From our own market analysis, we observe that despite the increasing number of licenced VAS/Shortcodes providers, the market is on perpetual decline. This is mainly due to the fact that the premium SMS shortcodes business which is mainly dedicated for the commercialisation of mobile content, is completely under control of mobile network operators (MNOs), who impose their technical and commercial terms to licenced VAS/SMS shortcode providers, and especially with regard to the unfair revenue share for the service provision, the VAS operators said.

According to them “moreover, we also noticed an increasing demand for longcodes from various kinds of businesses especially in the domain of the cloud unified communication and multichannel call centre, to mention a few. While about six companies have been licensed to provide special numbering services in the past two years, none has been allocated with a range of VAS long numbers except the first licensee who is operating the 0700 and 0800 ranges since 2005 under a monopoly situation.”

This undue delay of NCC to allocate VAS long numbers to new licencees have serious negative impact on their business and leave them bewildered

as to what to do with their licenses in addition to the loss of investors confidence already being experienced. In addition, these unnecessary delays further create the fear of a deliberate creation of a monopoly without giving any room for competitiveness and creativity. The questions in the mind of many are: What is actually causing the delay in the allocation of the numbering plan to these licensees? If there are grey areas to sought out why are the Licensees kept in the dark, instead of seeking their opinion on resolving any of such issues whether apparent or real. Will the License duration be extended to cover these periods that have elapsed, and when actually will the numbers be made available to the Licensees? These are some of the questions that VAS operators are asking the NCC, while seeking clarification on the matter.