The term “value added services” refers to options that complement a core service from a company but are not as vital, necessary or important. Value added services are often introduced to customers after they have purchased the core services around which these ancillary services are built. This term is used in many industries, most notably the telecommunications industry. In some instances, a value added service is something extra that is provided to a customer at no additional charge. At other times, the ancillary service is offered to an existing customer for an extra fee. The actual pricing structure for a value added service usually depends on whether the provider sees the service as an amenity that is intended to create a stronger rapport with customers or as a source of additional revenue.
Value added services provide advantages for both the customers and the service providers. Customers have the opportunity to receive something above and beyond their basic needs and Providers benefit from increased revenue. These additional customer services often cost the company little extra but have the potential to significantly enhance the growth and the reputation of the company.1
Value Added Services in the Telecommunications Industry
A value-added service (VAS) is a term commonly used in the telecommunications industry. The term indicates the various services beyond the basics (mostly phone calls and fax). Examples of value added services include voice mail, ring back tone, balance checks, top up, SMS voting, SMS lotteries, recorded messages, dial back, and many others.2
Value-added services are supplied either by the mobile network operator themselves or by a third-party Value Added Service Provider (VAS Provider). VAS Providers combine the role of VAS Aggregators and Application Developers/Providers and leverage on the infrastructure of the Network Operator to provide the VAS by connecting to the Network Operators using protocols like Short message peer-to-peer protocol (SMPP), connecting either directly to the short message service centre (SMSC) or to a messaging gateway that gives the Operator better control of the content.3
Regulation of VAS Providers in the Nigerian Telecommunications Industry
VAS Providers are regulated by the Nigerian Communications Commission (NCC) which is authorised by the Nigerian Communications Act 2003 to issue Operational Licenses, Guidelines and Regulations from time to time. Pursuant to this authorisation, the NCC has published License Framework for Value Added Services (Guidelines) to establish a framework for the implementation of appropriate safeguards in relation to the use of mobile Value Added Services. The objective of the Guidelines is to ensure that:
- Customers are sufficiently informed of the nature and prices of the VAS Services at the point of sale, in advertising and while using the services.
- Consumers/Subscribers are educated about the conditions and terms of Value Added Services e.g. right to privacy of the subscriber, no unsolicited messages, right to opt in and opt out of a service, etc.
- Customers can readily access an unsubscribe mechanism for each Value Added Service, to discontinue a service and avoid incurring further charges.
- Consumers have a convenient, fair and efficient means of resolving complaints in respect of the Value Added Services.
- To encourage entry into the telecommunications industry by investors which promotes competition that would guarantee better services for subscribers and additional revenue to the operators.
Services Envisaged Under Value Added Services
Some of the services that fall under VAS license category include the following:
- Text messages, picture messages, ringtones, graphics, games, mobile internet sites, videos, multimedia, call directory and call centre services
- All services using or needing short codes
- Call Centre services/Call directory services
- Prepaid calling card
- Special numbering services
Licensed VAS Providers must adhere at all times to the following Guidelines:
- Service Subscription – Subscribers have a right of privacy. Therefore, VAS Providers are restricted from sending unsolicited message to a non-subscriber. Approval of the Consumer must be obtained prior to sending commercial SMS messages and other Value Added Services, and such approval is limited to the specific programme to which the consumer had subscribed.
- Service Providers must not send or have others send on their behalf, unsolicited, random or untargeted telecommunications messages (SPAM).
- The consumer must have the right to ‘opt-in’ or ‘opt-out’ of any promotion or program/service, whether subscription based or otherwise.
- No value added service may be promoted as being free if it involves any charges whatsoever to the consumer. No product or service may be described as free if it is obtainable only by use of a premium rate service involving a charge to the customer. There should be no hidden charges. Any associated charges for services rendered should be disclosed.
- Text messages sent and received by consumer must be stored by the service provider for a period of six months or any period determined to be reasonable by the service provider.
- Service providers must build safeguard measures to the satisfaction of the regulator to ensure that no sexually suggestive or explicit material is transmitted in the course of the service.
- Messages that must not be premium – for SMS containing help and error messages or other general information or for messages requesting for information or stopping a service, the Value Added Service provider must not charge the end user.
- Customer support – The VAS Provider is obliged to maintain adequate support on all services. Complaints should be dealt with within a reasonable time frame. Where a complaint is not being approved, reasons and decision must be conveyed to the complainant within a reasonable time.
- VAS Providers must adhere to Quality of Service Regulations and other Regulations issued by the NCC.
Penalties for breach of the above by VAS Providers could include payment of fine and withdrawal of operational licenses.
In line with global practice and NCC’s objective of promoting self regulation in the industry, NCC may request stakeholder in the industry to develop a Code of Practice for all forms of VAS Provisioning in Nigeria, which must be approved/ratified by the Commission and binding on Network Operators if they choose to provide the VAS directly.
The Issue of Unsolicited SMS, Telemarketing (Spam SMS), & the Right of the Nigerian Citizen
The NCC has introduced a Toll-free Line (622) to enable aggrieved Users seek redress for any unfair practices of Mobile Network Providers or VAS Providers, hiccups in services, receipt of any unsolicited text messages and voice calls and for any other complaints that Users may have regarding their services. It recently noted that it had received series of complaints from Users who receive unsolicited text messages from VAS Providers without an option to opt-out and that it would take the necessary steps to ensure that such erring Network Providers are sanctioned, which sanction could include payment of fine or withdrawal of operational license.
Subscribers have also complained that most of the SMS that are sent to subscribers are not necessarily from the operators as people now buy bulk SMS for telemarketing which they send to as many people as possible. The Director-General, National Lottery and Regulatory Commission (NLRC), Peter Igho, had earlier called on the National Assembly to enact a law that will criminalise telemarketing in the country. He argued that apart from the fact that such calls have been associated with various scams and fraud, they are often considered as provocative, especially when they occur during dinner hours, early in the morning during family devotion, at the peak of important meetings, late in the evenings or in the middle of the night. In some countries, telemarketing is subject to regulatory and legislative controls related to consumers’ privacy and protection. Unfortunately, such legislations are yet to be enacted in Nigeria.
Responding, the NCC observed that whilst telemarketing is a global phenomenon and not limited to the country, Operators ought to give subscribers the opportunity to choose not to receive these calls and SMS by providing a code for opting out.
According to the NCC, it is impossible to ban telemarketing or stop unsolicited text messages totally in the country but instead, it ought to be regulated. It has therefore restricted these telemarketing activities between 8am and 8pm and that number of SMSs reduced to avoid discomfort to customers in line with the existing guidelines. It also challenged subscribers who are still being inundated with unsolicited text messages at odd hours of the day to sue telecoms operators involved for invasion of their privacy.
It is expedient to note that the US telecom consumer protection law requires operators to maintain a company-specific “do-not-call” (DNC) list of consumers who have requested not to be called or sent sms and the DNC request must be honoured for 5 years. They are also required to honour apart from the company-specific, the National Do-Not-Call Registry. Once a telecom subscriber have placed his or her phone number or numbers on the national Do-Not-Call list, providers are prohibited from telemarketing to those number(s) and that number or numbers will remain on the list until the subscriber removes them or discontinues subscription for that service.
It is important to state therefore that unsolicited and spam SMS is not a global practice, rather, consumer protection is. The incidence of widespread consumer abuse and exploitation through different deceptive and untruthful advertisements and spam SMS ought to be prevented by the regulatory bodies. We call on the NCC to take the issue of telecom consumer protection more seriously and find proactive ways to curb the excesses of value added service providers and address the issues, not only of consumer disturbance but consumer exploitation and abuse.
We also call on all telecom subscribers in Nigeria to rise to the challenge and demand for and assert their rights. Telecom subscribers have the right to engage in peaceful protests and demand as a matter of urgency, the review of existing consumer protection law to conform with international recognized and acceptable standard and ultimately engage telecom providers in the court of law to address and demand their right.
Every provider has or should have a contractual obligation to provide good and quality services and to protect its customers from value added service providers who bombard subscribers with all kinds of exploitative SMS and adverts just because one is on their network. Telecom subscribers have the right to choose whether or not they want to continue to receive any of such SMS.