Time for NCC to grow a spine

By Charles Ibekwe

Nigeria’s telecom subscribers are being ripped off daily and the only organisation empowered to stop it, the Nigeria Communications Commission (NCC) is set to allow that continue into the foreseeable future except something gives. The network operators are the ones regulating NCC. It is their puppet that jerks in whatever direction they pull the strings to.

NCC did not leave anyone in doubt that this is what is happening as it recently cemented its position as a collaborator with the network operators as opposed to that of a regulator that the public expect it to be. The shambolic outing at a forum couple of weeks ago in Lagos to explore the draft regulatory framework on Value Added Service (VAS) prepared by the NCC confirmed what has always been known by subscribers, the regulator answers to the operators it was meant to oversight.

What happened at the consultative forum, paradoxically organised by the NCC, was nothing short of the big telecom companies (telcos) giving the commission the middle finger and they were not remorseful about doing so openly for all Nigerians to see. Reduced to layman terms, the telcos are adamant in their resolve to continue holding Nigerians hostage with their exploitative offerings while at the same time holding back the growth of the industry and preventing its expansion to create jobs for Nigerians and revenue for the government.

At the core of what transpired at the consultative forum was the Value Added Service (VAS) which the draft regulations described as “…any telecom network-based service that offers more value than the ordinary voice conversation service, usually at a higher price than normal voice charges OR a service offered over the public voice or data network which by using computer-based processing allows the caller to access, download or modify information stored in remote locations.”

So all those information services and content such like news, updates, data, quiz, games, ringtones, video streaming, alerts, product information, call centre and database access etc. are what constitute VAS since these are not the functionalities that the telecom providers were originally licenced to serve. These services are currently unregulated and the draft framework is meant to provide regulation that includes licencing those that provide them, different from the telecom operators. The lack of regulation is of course responsible for those annoyingly irritating intrusion into one’s privacy and quiet moments by constant harassment from unsolicited SMS, robot call and offers for caller tunes. Those that have approached NCC to stop the bombardment from these services will understand the degree of helplessness the Commission currently faces since it does not have the framework in place to regulate them as it were.

It must be noted that all subsisting directives to bring the telecos to heel have only been minimally successful because as things stand the big companies are the accused, judge and jury. They will continue to exploit subscribers for as long as the current arrangement continues.

But if citizens and subscribers think unwanted services are irritating – and they are irritating to the extent that those currently shunting them to the public have no competence to deliver in ways that truly make them Value Added Services – the greater import of the telecos holding unto VAS should get every single person massing at the NCC national headquarters demanding that the right thing be done.

First, the jobs that were widely promised to come with growth in the sectors have been stolen or killed because the diversity that should come with different firms handling different components of VAS has not been allowed to blossom. The VAS value chain, as envisaged should include service and content developers, service hosting and service providers – the aggregators, as well as the network operators. Network operators at the moment hijacked the three tiers. Because they have a kind of monopoly of these services, which they should not be offering in the first place, they are also involved in what amounts to price fixing that allows them to charge exorbitantly. For instance, have you ever imagined that SMS are supposed to be free of charge (or part of the package for subscribing and paying to a particular telco); yet Nigerians were once paying N15 per SMS? How was it possible for the network operators to offer promos in which they can give 1000 free SMS and then go back to continue charging for the same service they should have offered for free? We don’t have to delve into the extortion by the banks in charging for every activity on customers’ accounts through sending frivolous and often unnecessary SMS.

Secondly, the owners of the content deployed on VAS platform, especially the intellectual property owners – musicians, comedians, authors and owners of various literary works, etc. are recklessly short-changed by the big telcos. Without a formally licensed aggregator or middleman, the telcos have become something akin to record label or movie producers/companies. They can decide to, for instance, offer any artiste a paltry percentage of the total profit derivable from his/her intellectual property. Since this segment of the business is not regulated or liberalised, it is a zero-some, winner-takes-all market space for the telcos.  This stifles creative energy and has contributed immensely to the inability of the creative and entertainment industry to grow above sustenance level.

Thirdly, on the government (revenue) side, the network operators are engaged in systematic taxes evasion as they do not pay additional or commensurate taxes for the revenues derived from the activities of the other segments they have hijacked. The VAS platform is reported to be worth at least over N300billion yearly but there is no record of government making corresponding benefit from it by way of additional tax remittances. Let us not forget that the additional thousands of employments that VAS would generate will translate into more PAYE tax for the government to finance public infrastructure. This was the way the telecommunications sector was envisaged when the industry was liberalised. So why has the NCC allowed a few big wigs to revert it into a patently manifest inefficient monopoly?

Furthermore, the refusal of the telecom operators to stick to their mandate areas – voice and data – is impacting the quality of service they deliver. This is happening because they spread their available resources so thin instead of allowing competent firms to be properly licenced by the NCC to take over VAS as applicable in other markets. Their insistence on operating on the current model is particularly baffling since they will still make money from the other segments providing VAS. To the extent that their economic interests would not be hurt in any way, one must thus ask why the NCC is resolute on remaining the protectionist regime for the network operators instead of stepping up to its functions as provided in the extant law.

It is common knowledge that the telcos have their own aggregators – which they actually control to short-change both the consumers and the government in terms of quality and value-added services and tax evasion respectively as itemised above. They have no business owning aggregators, whether as subsidiaries or as affiliates. The industry is not structured to function that way and it is only an anomaly birthed from the unholy alliance between the NCC and the network operators. Each subscriber must therefore pose the relevant question to the NCC to explain why it has over the years stayed hands akimbo while the operators generate or control the generation of content and sell to the people in clear violation of the class of licence issued to them.

There is a reason the industry has diverse roles for developers, aggregators, and network providers. The network providers are already doing their job and compromising, if not brazenly hijacking a chunk of business that are beyond their patent functions as provided by the law. If the industry is allowed to thrive the way is meant to be, content and service developers will for instance ensure they are pushing out standard services that are relevant to their customers as opposed to the junk-ware that now dominates the mobile platform. A properly licensed aggregator would ensure that the relevant content are screened, deemed appropriate and delivered only to those subscribed to them and not infuriate our lives as is the case presently.

The NCC must tell us why it is allowing the on-going criminality of telecom companies to go on under its watch as the regulator. We continue to receive all manners of shorts code messages and oftentimes ring back tones we never subscribed to but still charged for even when they have no reflection whatsoever on our taste and choices.

****Ibekwe is a public affairs commentator writing from Enugu State