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| Juwah.....NCC EVC |
By Prince Osuagwu
The Nigerian labour market may soon get massively bloated, if the Nigerian Communications Commission, NCC, does not quickly wade into the looming battle about to break out between the telecom operators in the country and their counterparts who provide value added services.
The brewing battle is following a disagreement between the operators and VAS providers on a revenue sharing formula proposed by the operators, which the VAS providers say is exploitative.
Unfair revenue formula?
Vanguard gathered that trouble started when one of the telecom operators, Airtel Nigeria, penultimate week, wrote the Value added service operators, proposing to change the running VAS revenue sharing formula of 60:40 percent to 75:25 percent between operators and VAS companies respectively.
This proposed formula had angered the umbrella body of the VAS providers, the Wireless Application Service Providers of Nigeria, WASPAN, which not only vowed to resist the move but described it as not being in the best interest of the growth of Nigerian telecom industry.
The Indian connection
The group alleged that Airtel may have come up with the alleged biassed sharing formula to tactically push them out of the agreement so it could bring in the Indian VAS providers to ensure that its economy continued to circulate within. The group cautioned that if Airtel is allowed to have its way, other operators would follow suit and the local content providers and thousands of Nigerians they employed, would be out of jobs and further stress the Nigerian labour market.
The VAS operators further argued that the plan by Airtel represented yet another strategy by mobile network operators to run down the businesses of VAS companies due to perceived weak regulation of VAS services and called on NCC to step into the matter to prevent crisis in the telecommunications sector.
Allegation is laughable — Airtel
However, when contacted, Airtel denied that it had even imagined bringing in Indian VAS operators to take over the services provided by Nigerians, describing the allegation as laughable. It stressed that the decision to review the sharing formula was strictly on business grounds, devoid of any ulterior motive, adding that the fact that top owners of the company are Indians does not make Airtel Nigeria an Indian company.
According to a senior official in Airtel Nigeria who didn’t want his name in prints, “is it not laughable that Airtel Nigeria would just ferry in Indian VAS operators to come and provide the services that the Nigerian VAS operators have been providing? This is a pure business decision and every company has a different business agreement. The business we have with the VAS operators is a business of numbers. As we keep growing, the revenue formula will keep changing. We may not have the same agreement with them like some of the operators that are bigger than us in subscriber base. Neither would our agreement with them be the same with the operators we have greater number of subscribers than.
You, see, this is business, if you like my terms you do business with me but if you don’t, you take your business elsewhere. I don’t think this is a big issue. In any case, some of their members have signed the agreement and we are doing business with them. I don’t know why a few of them are making issue of a simple business matter”
We may go to court— WASPAN
Meanwhile, Head, Business Development, WASPAN, Eunice Benjamin-Ade, had told Vanguard that companies that are affected by the proposal have already contacted their lawyers to seek possible legal redress of the matter if other steps taken to redress the matter failed.
She said, “We want to state our outright rejection of this plan by Airtel, as we believe that it is an unacceptable imposition that threatens the very existence of the businesses of VAS companies in Nigeria and it is one that is not based on any prior consultation with any member of WASPAN.
“We have already communicated our rejection of this advice by Airtel to the Nigerian Communications Commission, the regulator of the telecommunications industry and intend to do more, including going to court, if necessary. We call upon NCC to intervene in this matter urgently to forestall an unnecessary industrial dispute in the telecommunications industry.”
Benjamin- Ade said Wireless Application Service Providers are legally-registered businesses in Nigeria that operate based on laid down business laws and have helped develop various offerings in the telecommunications sector since inception until now, noting that the move by Airtel could destroy gains that have been made over the years.
She added that VAS providers have consistently allowed a change of revenue share over the years in favour of operators and will not agree to any further shift that will reduce revenue that accrue to VAS companies.
“We believe that the recent moves by various operators to continue to change the revenue sharing ratio in their favour will not only set the stage to run down businesses of many wireless providers, but one that could eventually destroy the entire industry,” she said.
The new development represents yet another twist in the battle between mobile network operators and Value Added service providers over the sharing of revenue generated in wireless application services.
WASPAN only recently dragged one of the leading GSM companies to the Nigerian communications Commission over its refusal to pay accumulated VAS revenue for over 12 months.
NCC may wade in
However, NCC told Vanguard that the report has not come to it officially and promised to take action when it is officially briefed on the issue.
Executive Vice Chairman of the commission, Dr Eugene Juwah when confronted with the matter, admitted that Value added service was part of a licensable set of services that run on mobile networks but added that NCC was yet to develop requisite regulation for such services.
He said that if settlement of disputes on this area becomes problematic, the commission could event go the extra mile to convey a stakeholder conference to trash out the dispute.
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