In the MobileMoney space of fledgling markets, the regulator-licensee relationship is oft mismanaged...inadvertently. This presentation recommends simple but profound steps for both parties to beneficially engage, rather than lock horns from a distance.

1. Bridging the
Regulator – Regulated
divide
A Minefield & Goldmine
The Nigerian case
Simon Aderinlola March 2013

2. Discussion Roadmap
• A decade and a half of NCC, CBN interactions
• The approach of this presentation
• A sensitive issue: General complaints about regulators
• Regulatory economics
• Useful penny-drop points to ponder
• Best next steps for the regulator
• Best next steps for the MMO/the regulated
• Parting words: Regulation and a human face
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3. Simon Aderinlola
• NCC interactions:
– Licences: Cyber café, ISP, VOIP telephony & Int’l call routing (1999-2002),
VAS license for 3wc (2011), negotiations for an Industry group formation &
advocacy for WASPA-Nigeria (2008-13)
• CBN interactions:
– 2010 MobileMoney license proposal as Transactus®
– 2011 Agent Network Director Monitise MM NGR till license acquisition
• Professional career path (Nigeria-Benin-Ghana):
– Sales >> Merchandising >> Brand support >> market research >> VOIP/Call
termination >> mobile VAS >> MobileMoney/Agency banking Consultancy

4. What this is not about
• Partisan finger-pointing
• Ego-massage & eulogies
• Bringing a solution “from Mars”
• Supplanting raw case studies in local context
• Claiming that no one knew anything near a solution until
this eureka presentation happened ☺
…Just some penny-drop reminders to adjust /position our perception of
a sensitive issue
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5. The gender wars as a metaphor
• Issue: Unwillingness of the policy apparatus to adapt to
popular outcries…then what?
– Step back & re-approach the rules
– Covey rules: avoid the circle of concern e.g. Microleverage
– Relook the business case for opportunities
– Identify the river’s current tide direction & really provide a solution
• Illustration: Gender inequalities irrespective, marriages
work, some seamlessly
– Divorce rates soar globally, but marriages work nonetheless
– With all issues said, imagined or written, regulation works. A
company under one of the most comprehensive regulation
regimes makes over 2 billion Naira daily…in Nigeria
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6. Useful penny-drop points to ponder
1. Regulation comes off clarity on the Background/context,
Purpose, Obligations of parties & the desired outcomes
2. Even the regulation we now see & work with is layered on
some other long-standing, nation-shaping rule pedestals,
rightly or wrongly sunk
3. Do regulator personnel really know anything? Sorry, they
usually do: though they may not resonate with entrepreneurs,
personnel regulating private sector concerns are usually
more knowledgeable than average government workers
4. Mobile Operators impeded from leading a MobileMoney
deployment in Nigeria: show-stopper or opportunity?
5. “The police is your friend” is often disagreed with.
But will you rather live in a state un-policed?
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7. Regulatory economics
The utopia of regulatory regimes
• Public services can encounter conflict between
commercial procedures (e.g. need to maximize profit),
the interests of the people using these services, (e.g.
pricing, QoS) as well as the interests of those not directly
involved in the transactions (externalities).
• Most governments therefore have some form of control
or regulation to manage these possible conflicts. This
regulation aims to ensure that a safe and appropriate
service is delivered, while not discouraging the effective
functioning and profitable development of businesses
• …..culled from a wiki submission
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8. Best next steps: FOR THE REGULATOR
1. Get closer to the battle in the trenches, borrow MMO goggles
2. Breath life into the documented, sustain one-on-one dialogues
3. Apply Russian proverb: “it’s not enough to be good…”
4. Keep door open to constructive criticism & don’t kick at every dog
5. Understand and respect the rights of the regulated
6. When you block a road, shine the path to the sidewalks
7. Appreciate the transitory nature of government
8. Care killed the cat: lighten the ‘red-tape’ burden & cut to the chase
9. Regulators take risks too: use the right metrics, get superior
alignment, think entrepreneurially…yes, take risks & bet on clients
10. Keep posterity in view..eyes on the future, but avoid eye service
11. Be a learning, constantly evolving machine. When unclear,
ask…even from those you regulate
12. Say/be quoted for just a few things and stick to them
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9. Best next steps: FOR LICENCED MMOS
1. Don’t wait for issues, think long term:
1. regularly hold rich content meeting sessions with decision takers/contact
points in Regulatory body, advocacy by engagement
2. identify today’s structure & relationship gaps that will impede future issue
communication, then take steps to bridge these
2. It won’t help your cause to assume regulators know nothing
3. They regulate you, but you are not the center of their universe
4. Let your case ‘pack a punch’ & deliver counter-points succinctly
5. Do not go out to shock or surprise your regulator: use press and
public media in the right order & dosage
6. Manage your image and what your name connotes well. Foul-
smelling licensees meet hurdles in process gaps where a human
face helps move things…money doesn’t open all doors
7. Regulator liaison is a job function, assign not just the CEO
8. An Industry group is important, but must not become a distraction.
Seek for policy-impacting advocacy, not noise for “nuisance value”
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10. Why regulators need a human face
(1) most of the power swings their way, and (2) a good number of
regulated independents are really startups, with a high mortality index

11. References
• Barth, James R., Gerard Caprio, Jr., and Ross Levine. 2006.
Rethinking Bank Regulation: Till Angels Govern
• Ross Levine, 2010 The Governance of Financial Regulation: Reform
Lessons from the Recent Crisis.
• ‘Regulatory Impact on Business Model Choice’, www.gsmworld.com/mmt.
• Regulatory Issues Related To Financial Innovation Stephen A.
Lumpkin, 2009
• www.microleverageng.com
• www.accendoassociates.com
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