Nigeria’s VAS providers ‘on brink of extinction’

Simon Aderinlola, National Coordinating Consultant, Wireless Application Service Providers Association of Nigeria (WASPAN) says big operators are exploiting his members by paying them peanuts. He says if the regulator fails to intervene, it may not have anything to regulate after the harsh operating environment must have forced his members to close shop. He spoke on the menace of unsolicited text messages in the country on the sideline of a stakeholders’ meeting convened by the NCC in Lagos. Biztechafrica.com was there.

What is WASPAN?

A self-regulatory body of firms licensed by the NCC that have at least connection with one mobile phone operator in Nigeria providing value added service (VAS)

There are allegations that your members dump unsolicited text messages of the subscribers and even extort money for services not rendered. What is your reaction to this?

These are clear evident problems in the industry today. We believe that some of these problems can actually be solved if we pay attention to what we call following the money. If sit down, we can actually track down how these messages actually come in, it will actually help us. There has been some progress and I must say that speaking for the members of WASPAN and please note that when we say WASPAN, we are talking about 20 of the 100 licensed VAS firms in the country. These are individual companies in Nigeria that are duely registered and pay their taxes and do all the necessary things a company should do and they run legitimate business. They have a self-regulating arrangement and we urge the NCC to help us to regulate that part of the system that is made to work but the beautiful thing however is that this small group of companies have a way we check ourselves, so if there is any reason or any complain that these companies have done anything wrong, we have that understanding among us to …..but moving forward on this, it doesn’t have to be done manually, there has to be automated way it will be done.

For example in South Africa, it worked very well. Those are part of the recommendations we are making to the Nigeria Communications Commission (NCC) that we don’t need to have manual processes to solve these problems and if the customers are complaining about an issues, we should have fast turn-around time and we have made some recommendations both in writing, in presentation of position papers and in our various engagement with the operators and with the regulator and we believe that there will be some progress. I am privileged also to be a part of the Industry Working Group and the mandate also includes trying to fashion out what kind of consumer protection element can be brought into the rules that govern VAS generally in Nigeria.

So, in answering that other aspect of your question about messages getting to people may be at night, they are rogue VAS services. By rogue VAS services, the Commission has tried immensely, there is a framework for licensing but it is gathering momentum, there are some who actually open business to do wrong things. The more the right regulation is put in place such that you are not killing innovation, but ensuring that the customer is protected and the rule are clear and transparent, the better for all of us and I must say this is the first of its kind forum of this nature where you have the operators, the VAS providers and the NCC all giving their own ideas on how things can work and I am sure the more we have session of this nature, the more we will be able to drive things forward.

What dangers does the incursion of foreign players, many unlicensed, pose to the sub-sector of the telecoms industry?

That is a real problem. Sometime last year or there about, the NCC released publicly an advertorial that anyone who does not have a VAS license is not permitted to run VAS within the Nigerian space and the NCC was, within its ambit doing the right thing and the operators were also advised adequately anybody within this period of time who does not show evidence of doing the right should be yanked off, his code switched off and so on but we have some porous opportunities that allow people to circumvent rules. And so, let me say here that I am company X, I come maybe from Eastern Europe and I landed in Nigeria and have spoken nicely to an operator and the operator likes my business plans and allowed me to launch without doing the necessary checks. Let’s say that happened. Now you hear the NCC say don’t you know you need to have a VAS licence and the guy says what are the requirements to have a VAS licence? And you give him and he looks at it ok: CAC registration, I must have an office, I should be able to show this or that. Some of them just decided to quickly employ a local staff. So they look at the rules and suddenly set up something, so you have a satellite office, a pipe internationally, doing all sorts of things.

What they would have done from outside, they will just employ a person like me bearing Segun and I own a small office somewhere and doing all sorts of things. The Commission has been informed about this kind of activities, sometimes we identify them and pass it on to them and we are really trusting that some work has been done. Like I said, this type of session will go a long way to addressing the challenges.

You spoke about rogue operators. What is the modus operandi and if you like, modus Vivendi of this people?

That’s a good question. I am not holding brief for any operator here. But all operators have their rule of engagement, standard operating principles and they all have their interesting retail governance but I do not believe that an operator will intentionally sign on somebody who comes with such intent to defraud Nigerians but however, there are people who actually resume in their offices for fraud. So a person who decides to deceive the customer you represent will come in a way that his CV and other documents say something nice about what wonderful business is. What we are saying is some are caught while others scale through the filters that are available those filters are part of the recommendations that we say must be tightened and they should look a little closer at what really are the requirement when we say a company is a VAS company in Nigeria, what does it mean?

Does it mean I have a CAC document? Is that all because we have noted that quite a number of licensed companies that got VAS license from the NCC were just about four five years ago sitting abroad and having their services deployed by Nigerian VAS companies, so now, because they found out that there is a licensing regime, what have they done? They have also landed here, pushed aside the Nigerian companies and they are running their services themselves and these are big companies that we were filtering what they were giving us before and now coming directly.

So we are alerting the Commission about these kinds of services and sometimes they come in claiming they are only bringing in infrastructure. I am a mast provider for example, but when I come to the operator that I am providing mast, I will also say I provide wire, I provide digital service and there are people who that is what they feed their families with before and you are so big outside and because you do everything, you are the Jack of all trades, so it works for you where you are coming from. So when they land here, they eventually push aside the smaller companies that are recruiting our young boys coming from the universities that read computer science and writing codes. So these are some of the things we are bringing to the awareness of the Commission and we are optimistic that they will do something about it.

There are allegations of the big players trampling on small players such as your members. Can you share your experience in this respect?

Essentially, in that one, there is no hard and fast rule as regards the commercials. As was noted by the NCC, it is the regulator’s position that it doesn’t dabble into commercial agreements. We are however asking them tio look at things from the moral angle which is just reasonable which means that if I am the one that actually created the service, I did the research for the service, I designed and tested the service, I have workers that I am paying to be able to make the service work, then eventually I launch the service and market the service and may be am selling each download for N100, now why should I after that work begin to earn N20? We are just saying: put yourself in our shoes, does that make sense? Remember when this business s started like 10 year or there about, we were on 60 per cent and we were even saying this is not good enough.

Today, we are being pushed down towards 20 or 15 per cent. So, we are simply saying ok, you are looking at certain aspects of regulating us, what about this aspect? What if we die, who is the NCC going to regulate? That is what we are saying.

source: BizTech Africa