Telecoms Sub-sector Lost N221bn in Two Years


Emma Okonji

Value Added Service (VAS) operators, a sub-sector in the telecoms industry, operating under the aegis of Wireless Application Service Providers Association of Nigeria (WASPAN), has decried the heavy loss it incurred in the last two years, amounting to N221 billion.

WASPAN National Coordinator, Mr. Chijioke Ezeh, who raised the concern at the First Annual Nigeria Value Added Service Stakeholders’ Forum, organised by the Nigerian Communications Commission (NCC) in Lagos recently, said as at 2017, the VAS industry was valued at N300 billion, but that today the value has depreciated to N79 billion, which is between 75 per cent to 78 per cent loss in revenue within a space of two years.

Confirming the huge financial loss, NCC Director, Technical Standards and Network Integrity, Bako Wakil, said the commission was already working hard to revamp the sub-sector.

Wakil, who attributed the loss to the introduction of Do Not Disturb (DND) through the 2442 short code by the NCC in 2017, said NCC’s intention for introducing DND was not to kill the VAS industry, but to protect telecoms subscribers from getting unsolicited text messages and advertisement from VAS providers, who were busy deducting money from millions of telecoms subscribers as soon as they forcefully push the unsolicited messages to them, without their consent.

According to him, “Two years ago, the VAS industry worth over N300 billion, but the figure we got today shows it has dropped to N79 billion, which shows it is declining in value, but this is because of the introduction of the DND.

“The intention was not to bring down the market or the performance of this sector of the economy, but to regulate it as an industry regulator. Our concern is more on the consumers and Nigerian consumers were crying about the kind of money they were losing to DND without their consent. So, we have to address the needs of the consumer, even though this has affected investment in that sector, but then at the end of the day, the consumer is the king.

“NCC had to introduce the DND short code to stop the messages. If the subscriber does not want such messages, all the subscriber need do, is to subscribe to the short code, and the messages will automatically stop.”

But in a quick response, Ezeh said: “The decline in value is not just as a result of the introduction of DND, but a combination of factors. The embargo on the marketing, and then the introduction of DND, were the factors responsible for the decline in the value of the VAS sector from N300 billion in 2017 to N79 billion in 2019.”

He explained that cutting off bulk of subscribers from subscribing to messages from VAS providers through the introduction of DND short code and also the clamping down on VAS marketing by the NCC, were the key factors that led to the decline in value of VAS in the last two years.

“There was zero marketing for VAS providers for a year, which means we cannot get new subscribers to get on to our different services. And then in some cases, some networks wiped off everything that we had accumulated over the last 12 years. It took us 12 years to develop to N300 billion, and suddenly our value was brought down to N79 billion. So what took all of us 12 years to develop from a non-existence sub-sector to N300 billion value, was wiped out completely, and the action returned us to zero level.

“We were wiped out last year September 15, and from that time till now, we have not been able to come back to gain even up to one per cent of what we used to be in terms of new subscriptions. So, the N79 billion that we are left with today, is the residue of all the networks put together. That is what you are seeing now, leaving us to a huge loss of between 75 per cent and 78 per cent in revenue generation,” he said.

Both the NCC and the VAS officials present at the meeting agreed to collaborate in order to re-bounce the VAS sector.

“The collaboration is something that should be ongoing on an annual basis. So, we will continue to engage ourselves and to also analyse all the new solutions we will be throwing up as we go on, in order to ensure customer satisfaction, and to also ensure that those who are investing in the VAS business, have a way to recoup their investments and sustain their business,“  Ezeh added.

Wakil, however, said as the Information and Communications Technology (ICT) ecosystem was being transformed daily, VAS content developers and providers would have to collaborate and partner other stakeholders in the telecom ecosystem.

This, he added, would drive the development and proliferation of applications that would meet the needs of consumers.

 “It is in this regard that the NCC organises the stakeholder’s forum, intended to create more awareness, guide participants in understanding the social and economic benefits of VAS, assist the different stakeholders in the value chain to understand the importance of collaboration and partnership in the new ICT world where content is king,” Wakil said.