2. INTRODUCTION
Wireless Application Service Providers’ Association of Ghana (WASPAG) is an independent,
non-profit, self-regulatory organization with a remit to represent wireless application
service providers (WASPs) interchangeably referred to as value added services providers
(VASPs). The Association aims to provide a neutral forum for members to address issues of
common interest and interact with industry stakeholders, network operators and
government bodies.
WASPAG Objectives are to
Ensure that members of the public use mobile services with confidence, and
assurance that they will be provided with accurate information about all services and
the pricing associated with those services.
Provide a platform for addressing the concerns and complaints of the public relating
to services provided by WASPAG members.
WASPAG operates by a Code of Business Conduct and Business Ethics, endorsed by the NCA,
which all members are bound to and aims to ensure that end-users receive world-class
services whiles ensuring industry participants earn a fair return on their investments.
The association was officially founded in December 2012 with a membership of six WASPS.
4. Reference to an NCA press release in graphiconline ,the NCA
will establish an interconnect clearing house by the mid
2015.
The clearing house is expected to provide a common,
independent mechanism for the billing and settlement of
interconnect accounting traffic for all the existing and
future telecom operators in the country.
It will also, among other things, take over all the functions
relating to the preparation of billing information,
reconciliation reports and the reconciliation process itself
within one of the country’s most vibrant and competitive
industries.
THE INTERCONNECT CLEARING HOUSE
5. The NCA indicate that there have been many issues relating to auditing
of the charges and reiterates that the clearing house will prevent the
occurrence of such problems and ensure greater transparency.
The clearing house will take advantage of the opportunities of a
centralised national platform in addressing other industry challenges
such as the lack of technical redress to the issues of stolen phones,
uncertain subscriber identity, traffic volume monitoring as well as
facilitate connectivity to other platforms.
The clearing house could lead to a reduction of up to 40 per cent in the
interconnect charges, a move that would also impact on the tariffs paid
by consumers in the country.
The NCA has stated that there will also be a lower cost of setup for new
service providers.
RATIONALE FOR INTERCONNECT CLEARING HOUSE
6. We believe that the NCA is making efforts to improve the regulatory
framework of the industry and to ensure that Ghanaian companies are able
to participate in telecommunications on a fair and even playing field
To this end we applaud their efforts. However, we believe that an early
engagement with WASPAG would have provided insight into the challenges
faced by the Ghanaian companies and the possible interventions that would
be far less complicated and much more favourable to the WASPAG
membership
Not having had the opportunity to engage with the NCA till 28th November,
2014, at which point the call for bids had already gone out, and also not
having received reaction to our concerns and observations, we are doubtful
that our views will be factored into the process.
The current offering, as presented by the NCA document, is not inspired by
or consistent with the communicated concerns or interests of the local VAS
industry
WASPAG POSITION [1/2]
7. We believe connectivity through the ICH should not be mandatory but
should only be used to the extent that a service provider finds value in
doing so
If at all, there should be multiple clearinghouses so that service
providers who choose to use them have options and the typical benefits
of market competition
Inserting a monopoly into an industry that has been so heavily
liberalised, leading to the growth we have seen to date, seems to run
contrary to both the government and the regulator’s specified aims
Any potential comparison with Porting XS is fleeting at best as in that
scenario there was no existing porting service and existing industry
operators then funded its creation
WASPAG POSITION [2/2]
8. Interconnection is the linking of the networks of two or
more service providers, thus enabling the subscribers on
one network to access the subscribers of the other
networks.
An inter connect clearing house is an independent entity
that provides a common platform of inter connectivity for
the exchange of traffic or data amongst multiple telecom
operators in a jurisdiction or locality.
WHAT IS THE ICH?
9. Value Added Services (VAS) are non traditional telecommunication services
beyond the regular voice and fax services.
Examples of these include:
Premium SMS services e.g. News alerts, entertainment services, SMS
voting, SMS Look up services,
Premium Voice Services e.g. Voice SMS, Voice Mail, IVR services, Call
Centre
Mobile Applications
Unstructured Supplementary Service Data (USSD)
Currently in the Ghanaian Telecommunication landscape, VASP and
ISP services are the only segments Ghanaian entrepreneurs
participate in.
WHAT ARE VALUE ADDED SERVICES ?
10. VAS service providers currently have individual commercial agreements
with the separate Telco's which include:
1. Voice and Data Traffic transmission for services offered.
2. Billing
3. Reconciliation
4. Payments
All these are done under a commercial revenue sharing arrangement
after relevant taxes i.e. CST, withholding taxes are deducted.
RELATIONSHIP BETWEEN VASPs & TELCOs
12. Regulatory: The regulator considers our relationship with Telco's as
solely commercial and thus outside their regulatory control; at variance
with comparable regulators e.g. Kenya, South Africa, etc.
Competition: - Telco's concurrently act as platform suppliers to VASPs
whilst competing for the same consumer base with similar services.
Revenue Share: – Telco’s unilaterally dictate revenue share regimes for
VASPs. Current average Telco share of revenue is 70% though the VASPs
solely innovate, implement, and market these revenue generating services.
Other forms of challenges include but are not limited to service
implementation delays, arbitrary revocation of services, unilateral
unsubscription of consumers, payments delays, reconciliation differences
etc.
OPERATIONAL CHALLENGES
13. Reference to Page 14 of public consultation paper on interconnect
clearing house from the NCA, the proposed role of the ICH in VAS
states:
“Introducing Interconnect clearinghouse would improve the third
party value added service provision, mobile aggregation services
as well as reduce the issue of non-transparent revenue share
agreements which exist between content providers and mobile
network operators.
Content providers would have a single point of connection to the
other Service Providers for service delivery. It would positively
impact the issuance and allocation of short numbers and other
special numbering resources which is undergoing development. “
THE PROPOSED ROLE OF ICH IN VAS
14. Practically, there is no relationship between interconnectivity and Value
Added Services (VAS). This is because VAS has always been an intra
operator / network functionality i.e. VAS is always within a particular
network operator and not trans operator. VAS is offered on targeted
basis, and within the context of non traditional telecommunication
services provision.
Modalities with which VAS services are offered and delivered to
customers of a particular MNO is always intra network or peer to peer.
WHAT IS THE RELATIONSHIP
BETWEEN INTERCONNECT & VAS
15. The Proposed Role of the ICH seeks to solve the following:
1. Improved third party value added service provision
2. Improved mobile aggregation services
3. Reduce the issue of non-transparent revenue share
agreements.
4. Single point of connection for service delivery.
5. Positively impact the issuance and allocation of short
numbers and other special numbering resources
THE PROPOSED ROLE OF ICH IN VAS
17. Improved third party value added service provision
1. Additional bureaucracy arising from the introduction of a new
administrative layer with unclear financial or time saving benefits for
existing VASPs
2. For new VASPs, the benefits remain unclear as there may still be a
requirement to negotiate commercial and implementation terms
3. Introduces a potential catastrophic point of failure – resulting in revenue
loss across all operators for VAS
The additional bureaucracy is more likely than not to increase
costs and time to deployment of services to the Local VASP
and the consumer. This will only serve to further hurt local
demand and local content growth agenda.
OUR CONCERNS [1/5]
18. Improved mobile aggregation
services
Inefficient data flow
Inefficient resolution of issues
Increased operational costs
(creation of new links, without
compensation for existing links)
Increased financial risks vis-à-vis
reconciliation and payments
OUR CONCERNS [2/5]
The cost of this inefficiency will have
to be borne by the local VASPs which
will further retard the development of Local participation in the
telecommunication sector.
19. Reduce the issue of non-transparent revenue share agreements
It is unclear whether an interconnect fee for VAS will be introduced to
replace current revenue share regime
Risk of overbilling VASP’s using interconnect fees due to differences in
successful billing for VAS services at the MNO
Revenue share challenges are not rooted in transparency
There is a great risk of additional revenue audit complexity as instead of a
single bilateral discussion, there will likely be 2 or potentially 3 bilateral
discussions to address any discrepancy. This risk will lead to delayed
income acquisition and threaten the collapse of the local industry. This will
be a complete reversal of any local content gains made thus far in the
telecommunications industry.
OUR CONCERNS [3/5]
20. Single point of connection for service delivery
Refer to Slides “OUR CONCERNS” [1/5] & [2/5]
OUR CONCERNS [4/5]
21. Positively impact the issuance and allocation of short numbers
and other special numbering resources
Its unclear if ICH will issue and monitor SNR resources on behalf of NCA
Its unclear the benefits the ICH will deliver here as the NCA SNR initiative
already addresses this issue.
SNR’s are used within a network and not across networks
SNR’s are used as identifiers for billing which happens on individual
networks. The document doesn’t demonstrate how ICH will play a role in
the billing of VAS services via SNR’s
It is unclear the what the benefit of the additional administrative layer will
be considering that each MNO still has to implement and authorize the SNR
on each individual network.
OUR CONCERNS [5/5]
22. Regulatory: The NCA could take regulatory control of contracts and
service level agreements between MNOs and VASPs
Competition: The Regulator could mandate that MNO’s cannot offer
commercial Value Added Services except through a local VASP as is
done in several comparable jurisdictions e.g. South Africa
Revenue Share: The Regulator could consider VASPs as mini
operators and regulate an interconnect regime or bulk messaging rate
for VAS traffic
None of these require the intervention of an ICH but simply
the will of the regulator to support Local Content
development.
SIMPLE SOLUTIONS TO OUR CHALLENGES
23. VAS INDUSTRY IN GHANA
WASPAG has a current membership of 27 local Ghanaian VASPs. Within this
membership are 7 of the largest local VASPs. Together WASPAG members serve
about 20 Million Mobile subscribers and employ about 1000 Ghanaians at
middle income wage levels.
However the WASPAG membership receives less than 10% of the total VAS
revenue generated in Ghana. The bulk of the revenue goes to Telco's and foreign
non licensed third parties.
We humbly suggest that any intervention should be focused at enhancing the
growth opportunities for local content via these Ghanaian companies, to create
jobs and wealth for our citizens rather than risk curtailing their success by
introducing additional bureaucracy (time and cost).
