October 10, 2018

N79 billion market begging for rebirth

N79 billion market begging for rebirth

…NCCmullsharmonisation of short codes

By Prince Osuagwu (Hi-Tech Editor)

The Nigerian Value Added Services, VAS, market is valued at about N79 billion. Yet, it is dangerously going in comatose.

The business which until recently, appeared the most innovative segment of the Nigerian technology ecosystem, has lost its glory due to continued allegations and counter-allegations.

There are allegations of sharp and underhand practices against the VAS providers, particularly on their billing method.

Another dangerous factor sounding the death knell for the market is the revenue sharing dispute between the VAS providers and the telecom operators, whose platforms, the providers use.

There is also the alleged high handed regulatory methods, which the providers complain stiffle their operations and revenue base.

In all of these factors,  the VAS operators, under the aegis of Wireless Application Services Providers of Nigeria, WASPAN,Nigerian telecom operators and the Nigerian Communications Commission,NCC are  locked into argument of who is at fault.

However, all, ironically, agree there is urgent need of VAS market rebirth.

Value added services, are regarded as all services beyond voice calls and fax transmissions but non-core offerings used to promote primary or core telecom businesses.

They include; contest and voting messages, devotional applications, live streaming, location-based services, miss call alert and voicemail box, mobile advertising, mobile money and m-commerce services among others.

The market, according to NCC, is estimated to grow beyond N200 billion by year end, 2021.

It was imported from saturated technology markets in developed economies, 17 years ago.

The earliest challenge of the services was patronage but the ingenuity of the earliest service providers opened up interests. Two services, monotones and short message services, SMS, among all others,made sense to Nigerian users and the earliest service providers capitalised on them to provide the razzmatazz that was to rapidly grow the industry and eventually fizzled out due to revenue sharing disputes and alleged regulatory incapacitations.

The Nokia push email compliant phones and ringtone facilities of providers like Mtech, helped to build the market.

The services evolved from the earliest two, to Enhanced Messaging Services, EMS, to Multi-Media Services, MMS, and spread to what are today considered Over The Top, OTT Services like WhatsApp, facebook, netflix and all.

Apparently trying to take  the bull by the horn, the Nigerian Communications Commission engaged stakeholders in a town hall meeting, meant to stimulate a reawakening of the VAS segment of the Nigerian telecom sector.

At the meeting in Lagos, NCC announced that despite challenges, there were still over 200 VAS providers in the country, a signal that the segment holds great potential to the country’s economic reawakening.

Making the announcement, Executive Commissioner, Technical Services, Engr. Ubale Maska, said that growth of VAS in Nigeria, despite challenges, indicated the growing interest in VAS provision and how innovative Nigerians are becoming in using technology to solve problems affecting the sector and Nigeria generally.

Maska, represented by Deputy Director, Technical Standards, Engr. Bako Wakil, said: “As the ICT ecosystem develops daily, there are bound to be challenges and stakeholders in the sector have to collaborate to proffer solutions together in order to get full benefits of the innovation that VAS can bring. That is the essence of this stakeholders’  forum.”

He averred that the forum makes it all the more interesting because it will go a long way in harmonising ideas and strengthening VAS operations and services for the benefit of all.

Also, presenting a short code harmonisation project by the commission, Head, Fixed Networks and Wireless Services, Engr. Tony Ikemefula, said that one of the problems encountered in VAS operations in the country is the proliferation and duplication of short code numbers amongst operators.

He revealed that the Commission had decided to harmonise short codes including those used in air time top ups among operators to make it easier for subscribers to memorise.

He, however, allowed the VAS operators the opportunity to carry out internal harmonisation amongst their members, aligning with the new short code plans and report back results to the NCC.

Representing the VAS operators, National Coordinator, Wireless Application Services Providers of Nigeria, WASPN, Mr. Chijioke Ezeh, said that most of the problems in the VAS space are not new but  induced by its own evolution.

He, however, said they would have been contained if the regulator that was supposed to be the intercessor between the VAS operators and telecom operators had a good knowledge and full grasp of VAS operations.

According to him, “As our market began to evolve, revenue imbalance, share imbalance among stakeholders, imbalance in demographics, wide imbalance in purchasing power among subscribers, imbalance of tech standards and offerings and imbalance in licence offerings, set in.

“In 2011, the regulator stepped in, to provide licensing which will balance the market. But unfortunately, it yielded the exact opposite result, apparently because it lacked the understanding of VAS operations.

“Today, it appears the industry, despite the huge financial numbers, is dying.”

He advised that for the rebirth of VAS operation, there should be strategic rethinking of the VAS value chain, strategic rethinking of the stakeholders, regulatory modifications, repect for local content and realignment of consumer engagement.