NCC bars network operators from direct sale of VAS services to ensure best practices

MTN Nigeria, Glo and other mobile network operators (MNOs) have been barred from the direct sale of value-added services (VAS) to their subscribers, according to reports by Technology Times.

The Nigerian Communications Commission (NCC) says network operators will only provide final link to the subscriber for the purpose of delivering value-added service to the end user and would not be allowed to host or distribute VAS to its subscribers directly.

Mobile value added services are products/services offered via a mobile platform, like short message service (SMS) and multimedia message services.

These broad range of products/services that add value and offer mobile subscribers flexibility, convenience, assistance and other benefits from the mobile networks are also non-voice revenue streams for operators.

They had gained traction among subscribers lately over operator’s core voice services, which the NCC says it is imperative to bring such services under regulatory watch to ensure best practices and better customer user experience.

To this end, NCC plans to license a VAS aggregator that would take over the role of dealing directly with content and application developers in the VAS value chain.

The move that may also signal a win for calls to protect smaller players.

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The telecoms regulator has also has mapped out the relationship among players in the VAS value chain as follows: Content Developer ⇒ Content Service Provider ⇒ VAS Aggregator ⇒ Mobile Network Operator.

The Big Four MNOs, MTN Nigeria, Glo, Airtel Nigeria and 9Mobile (former Etisalat Nigeria) have a total of 140,350,383 active mobile connections as at the end of October.

The role of the VAS aggregator would be to provide direct and secure connection to content and application providers for access to all network operators that have the capability to transmit value-added services to end users.

“This service will be limited to the multiplexing of signals from various VAS providers and distributing same to all network operators as requested by each content and application provider,” the NCC said.

The VAS aggregator will also provide “direct link to the Internet or International Data Access service providers for content and application providers who wish to market their services globally.”

Under the regulatory regime, content and applications service providers (present VAS licensees) are the only players that will be allowed to pool, host and distribute content and applications using their own in-house software and hardware platforms.

NCC says the content and applications service providers “will have direct logical links to operators network. They will not be physically linked directly to the operators, but will have to go through aggregators.”

On the other hand, “developers are unlicensed, freelance creators of content and applications or those who have the franchise on such value-added services. They are however not licensed to distribute such services. They also do not need a license from the Commission to market their products, other than simple registration.”

The VAS space is a growing segment of the mobile telephony space that has seen over 108 licences so far issued by the NCC to companies located in Nigeria.

NCC says its plans “for the control and regulation of the VAS industry in Nigeria is developed in pursuant of the Nigerian Communications Act, 2003 which empowers the Commission to make subsidiary laws as it deems fit for the purpose of achieving the objectives of the Act.”

The Nigerian telecoms regulator also says the “framework is not totally modeled after any country’s regulatory style or practice, nor does it seek to re-invent the wheel. It was synthesized and adapted to the prevailing economic, social and regulatory conditions in Nigeria and recognized the international best practices in its formulation.