Nigeria: VAS license application ends as Nigeria sanitises estimated US$200m industry

The extended deadline for the application of a Value Added Service (VAS) Aggregator License in Nigeria has elapsed.

The one-week extension by the Nigerian Communications Commission (NCC) ended on Tuesday 3 April. It closes a crucial phase in the license issuance process since the Commission developed a framework in December.

The framework is a part of efforts to sanitise the country’s estimated US$200 million VAS industry – forecast to grow to US$500 million.

Many consumers have complained of excessive unsolicited VAS and charges. Billing-related complaints account for about 58% of complaints to the NCC. There are also cases of interconnect disputes in the country’s telecom industry.

VAS interconnect clearing houses fault the existing revenue sharing formula with telecoms operators.

They blame it, among others, for the huge indebtedness of up to N25bln.

According to the NCC, the framework is not fully modelled after any country’s regulatory style or practice. It was crafted to correct the imbalance in the VAS chain. It was adapted to fit Nigeria’s prevailing economic, social and regulatory conditions.

VAS aggregators

The new arrangement will allow present VAS licensees to be content and applications service providers. Present VAS licensees issued by the Commission will not need to apply for any new license. Rather, they are expected to upgrade later to meet stipulated technical specifications.

They will be the only players allowed to pool, host and distribute content and applications using in-house software and hardware platforms. They will not be physically linked to the operators, but will have to go through aggregators.

Developers are freelance creators of content and applications or VAS franchise owners. They need no license to distribute or market their services/products but a simple registration.

The NCC describes licensed aggregators service providers as those providing physical connections to networks. They are not allowed to host or distribute VAS to its subscribers directly. They will provide subscribers with access via SMS, IVR, downloadable app and portal.

They will also provide account management, credit balance enquiry and SMS log report.

Aggregators will provide a concentration point to limit the number of devices to be connected to the operators. This will eliminate the need for Content Service Providers to maintain multiple physical connections to each network.

They will neither be allowed to host or distribute contents and applications nor have access to the information passing through them.

Telcos, VAS Content (using Short Code) and VAS (Special Numbering Service) licensees cannot apply to be VAS aggregators.

Prepaid accounts of subscribers for voice and SMS services are to be separated from that of data and VAS. Stakeholders have six months to implement the framework’s guidelines to ensure seamless transition.

Those offering unlicensed services have to wind down within the period.

Source: IT Web Africa