Value Added Services: Who Uses Them?

Following the launch of several value-added services by telecom operators, Tayo Ajakaye asks who uses these service.

Value-added services are those service outside the core services provided by service providers. Just as the name implies, a value-added service is supposed to add value to the subscribers’ use of an operator’s network. These services have unique characteristics and they relate to other services in a completely different way. They also provide benefits that core services can not.

But accordidng to Mr. Calixthus Okoruwa, the CEO XLR8, who organised a VAS expo, e-NNOVATE early this year, value added services are now generically defined to refer to all other uses to which technological gadgets can be put, outside of the use for which they were primarily designed. He said the mobile phone is the prime example here as it was primarily designed for voice communication. If it now enables a user to link up with his e-mail or enables him to conduct banking transactions even while on the move, then of course these are certainly value added services.

Value-added services continue to be developed by the day. The more popular ones include call holding, call waiting, call barring, call divert, voice mail, SMS, fax messaging, Calling Line Identification, call conferencing, cell information, and all those services involved in mobile VAS. These include non-voice advanced messaging services such as SMS, MMS, Mobile Instant Messaging, and Unified Messaging. There are also wireless data such as GPRS, WAP, mobile gaming and Push To Talk.

Some characteristics of a VAS which experts have mentioned include that it is not a form of basic service but rather adds value total service offering. It could stand alone in terms of profitability and where properly offered, it could stimulates incremental demand for core service. A value-added service could stand alone operationally. It does not cannibalize basic service unless clearly favourable. It can be an add-on to basic service, and as such, may be sold at a premium price, and it may provide operational and/or administrative synergy between or among other services.

Basically, experts point to two types of VAS. The first service type are those value-added services that stand alone from the core service of the operator. These are often provided as an optional service along with voice services, although they could be offered and used by themselves without the voice service. A good exapmle of this is the SMS.

The licencing authority in many cases licence the operator to provide the basic voice services. The operator adds such other services that may attract subscribers to his network.

During the early stages of its operation in Nigeria, MTN in collaboration with a IT solution provider launched the Wireless Application Protocol (WAP). The service did not really fly. Not many people could perform the smallest task online, like checking e-mail, through the system. The fault might not be that of the telecom operator.

In recent times, virtually all the operators in the Nigerian telecom industry has come to town with one value-added service or the other. The GSM operators had been introducing one value-added service after the other. The competition, observers have noted, is in the launching the services, not in effectiveness. For example, one of the operators who offer GPRS could keep a subscriber waiting for more than 30 days before he is connected. After the acknowledgment by the network that your request had been received and was been processed, the operator goes to sleep till the following month. Yet before you could finish pronoucing GPRS, the same operator could come out launching another value-added service.

The PTOs are not left behind in this craze to launch value-added service. Many PTOs have launched Internet service, but subscribers cannot point to more than two that are working well. How many of those are working well? Some of them promised SMS, but they could only send that within their individual networks.

Although there was the culture of promise without delivery by operators, Okoruwa believes that “this area is a potentially exciting aspect of the technology industry – not just telecoms, but the entire technology industry – which operators are currently only just scratching. I say it promises to be very exciting because of its immense potential to add real value to the lives of consumers and in so doing, in helping to create new revenue streams for technology players – telecom companies, but also content providers, web developers, banks and financial institutions, sundry retailers and service companies and entrepreneurs of different hues.”

What’s more Okoruwa says, is that that for a country like Nigeria, an additional benefit would be that value added services in a very subtle yet potent manner, encourage Nigerians to embrace technology in their every day lives. Children who have had to enroll for WAEC or JAMB online or check their results in the same manner, come back home to regal their parents and older ones of tales of the new fangled technology.

Admitting that Nigerians might not be utilising these services to the utmost as yet, Okoruwa says the reason is that voice telephony is the primary driver telecommunications and after a prolonged scarcity of basic telephone amenities with attendant huge unmet need for telecoms, telecom companies have understandably and to resounded commercial success, focused attention on voice.Also, voice has also been the predominant concern of the consumers.

What Okoruwa did not include is that the problem might be with the inefficent way these VAS are offered in Nigeria. And after trying one out with money gone and no results found, Nigerian subscribers are learning to restrict themselves to just the basic use of the phone as much as they could. Many subscribers have had their money deducted for SMS that was not delivered. If this could happen to simple SMS, they wonder what would happen to GPRS and other high-sounding service.

It would seem the NCC has no standard on the quality of these value-added services. The regulator did not licence them to offer anything than basic voice telephony. So, it would be difficult to start grading them for a service your licence did not require them to provide. At the last published report on network quality in Nigeria, NCC concentrated just on the voice aspect. Which is just as well, analysts argue, because for an operator finding it difficult to provide quality voice service, adding several value-added services is an unnecssary distraction.

A telecom consultant who spoke with THISDAY on phone Tuesday night said “I cannot immediately think of one that has added value to what service.” It is a view shared by most subscribers, all the noise aside.

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