Business Hilights
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‘NCC restructured VAS market to end unhealthy competition with MNOs’

More facts have emerged on why the telecoms regulator, the Nigerian Communications Commission (NCC), restructured the nation’s Value Added Service (VAS) segment of Nigeria’s $70billion telecommunications sector.

Whereas the current Vas market worth put at $200million is projected to hit $500 million by 2020, the regulator said it restructured it not just for improved service delivery, but to guard against rising anti-competitive practices and other unfair sharing formula between VAS licensees and the Mobile Network Operators (MNOs).

Insights from a classified document titled: ‘Value Added Services Aggregator Framework’ by the NCC, sighted by Business Hilights Abuja Bureau chief showed that rather than one, the market had been segmented into four distinct areas.

The areas so classified include Network operators; Aggregators; Content and application service providers and Developers of content, applications and platforms.

Before now, there had been high level cold war between the two business groups and the battlefield had been infested by all kinds of tactics and unfair market patterns of engagements.

One of the key provisions of the 30 paged document is the adoption of horizontal segmentation in line with the value chain of the industry, which is consumer-centric.

The report averred that “Network operators will provide final link to the subscriber for the purpose of delivering value added service to the end user. The operators will not be allowed to host or distribute VAS to its subscribers directly.

“An aggregator will primarily provide a concentration point to limit the number of devices that will be directly connected to the operators. It will eliminate the need for a Content Service Provider to maintain multiple physical connections to each network operator.

“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.

“Developers are unlicensed, freelance creators of content and applications or those who have franchise on such value added services. They are however not licensed to distribute such services.”

Besides, the new regime provided that will be no limit to the number of content and application service providers to be licensed by it, stressing that the number of active participants in this segment will be left to market forces.

Whereas companies, which presently hold a VAS licence will not need to apply for any new one, but to operate in segment 3, as content and application service providers, they need to upgrade their facilities to meet the technical specifications stipulated in the technical framework within 12 months of the coming into effect of this framework, and will no longer have direct physical connection to the network operators.

NCC stressed further that VAS will be activated if the developer provides a legally enforceable guarantee against infringement of third party copyright, patents and intellectual property rights if required by the content service and app provider.

Also, if the VAS belonged to the class that the Commission defines as being qualified for short code allocation, it will be activated in no time.