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Soaring Revenue Base through Value Added Services

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The traditional service that telecommunications operators are meant to provide is voice communications. However, there has been increased demand for value added service which is secondary focus of operators that has turned to be a strong source of revenue.
A value-added service (vas) is popular as a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions but, it can be used in any service industry (eg. Web 2.0) for the services providers provide for no cost to promote their main service business. In telecommunication industry on a conceptual level, value-added services add value to the standard service offering, spurring the subscriber to use their phone more and allowing the operator to drive up their average revenue per user (ARPU). For mobile phones, while technologies like SMS, MMS and GPRS are usually considered value-added services, a distinction may also be made between standard (peer-to-peer) content and premium-charged content.
There are about 4 billion mobile subscribers worldwide, out of which 67 million mobile subscribers are Nigerian. Over 350 billion text messages are exchanged across the world every month.
Value-added services are supplied either in-house by the mobile network operator themselves or by a third-party value-added service provider (VASP), also known as a content provider (CP). VASPs typically connect to the operator using protocols like Short message peer-to-peer protocol (SMPP), connecting either directly to the short message service centre (SMSC) or, increasingly, to a messaging gateway that allows the operator to control and charge of the content better.
In the mobile phone market, new models are being rolled out with features targeted at specific user groups. There are feature phones for business people, with fast email services and document editing capabilities. On the other end of the spectrum are multimedia phones, further sub divided into units with advanced imaging and/or audio capability.
VAS applications
Person to Application (P2A) these are SMS messages sent by end users for contests & for seeking other information like news &  updates;  Application  to Person (A2P) are SMS inclusive of service push by enterprise service providers; Also include calls on IVRS for all other services like astrology.
Ringtones : This is inclusive of monotunes, polytunes, truetunes and also includes Caller ring back tones (CRBT).
Entertainment VAS (jokes, Bollywood Ringtones & games); Info VAS ( Information on movie tickets, news, banking account  etc); mCommerce VAS (Transactional services such as buying railway tickets or movie tickets through the mobile phone)    The revenue generation and popularity of these types of VAS revolves around two factors which are perceived value and practical value.
Technology Enablers    
Short Code Provider: these are the companies who own a short code (e.g. 8888, 3456 among others) which is sold to a third party client for some keyword and a specific period).
In the next few years, there is likely to be further specialization as network providers offer package bundles comprising of a phone, customized content, applications and a unique pricing plan targeted for some user groups. For example, one could opt for a package with a multimedia phone with huge storage space for music, digital rights management (DRM) software for sharing music and a usage plan that allows limited free downloads of songs and video.
Markets have traditionally been viewed in terms of supply and demand, in which vendors and service providers create value for which consumers are willing to pay. But in the emerging digital world, it is just as likely to be consumers themselves that create the value. A couple of examples: SMS’s or Short Message Services are perhaps the biggest success that telephone companies have had in persuading users to create their own value. Most recently, SMS-based voting used in competitions like American Idol/Pop Idol have generated large revenues for all stakeholders within a very short time.
The powerful combination of blogging or dissemination of personal content with social networking or "communitization" will have a strong bearing on the features and services that will be provided to users. There is a discernible trend in the use of mobile phones for creating and distributing blogs and video content while on the go.
The ubiquitous nature of mobile phones is ensuring that they play a key role in every major idea of this decade. As mobile phones evolve into versatile platforms for content exchange, telecom operators will be under pressure to deliver new, exciting content to grow their revenue base.
MTN recently has signed a deal with value-added services enabler and content provider IMImobile, to provide enhanced repository of current and globally popular content to 21 markets of MTN over a single platform.
IMImobile would address the local and international content needs of the company providing different flavor of music, news, sports and local contents, bringing online contents and mobile to 130 million users of the company.
The deal will also enable MTN to launch new voice and data services in its regions of operation. IMImobile is expected to earn around $150.2 billion in 2011 from mobile content and services.
MTN, having exclusive global content rights for the 2010 Fifa World Cup, will use the deal to deliver exclusive 2010 Fifa World Cup content to the mobiles of customers.
Expanding VAS
In Nigeria the list of content providers and platforms are growing by the day, some the major providers include, MTech, Cellcast, TaviaTxt, SaveMyContacts, Textnigeria, Entegration Solutions, Cellulant, CellTrust, 3G Reality Centre and A3&O among others, which generate mobile content to deliver value-added services via the GSM network operators. The mobile operators share the revenues equally with these private VAS companies, barring M-Tel, which is yet to develop a relationship with a VAS company.
The main players in the Mobile value added service chain in Nigeria apart from the National mobile operators are the content aggregators. They provide content to mobile operators; perform in-house content development and aggregating contents from other small players. They own the short codes and they have a tie up with multiple operators to ensure subscribers of all operators can access same short codes. Revenue sharing chain percentages will either encourage more independent developers or discourage them from rolling out innovative services that will promote the 3G. As it stands today, if the operators do not radically change the present revenue sharing structures which allows them to retain chunk of the value added services revenue, development efforts might not be encouraging after all.
Growth is stifled in the vas market in Nigeria because National mobile operators are playing safe and concentrating only on mass services for which content is readily available and chances of failure less. Entertainment value added service despite the fact that its practical value is minimal, is popular because of its mass appeal especially to youth segment and it is promoted over mobile commerce and infotainment which has the capacity to create real value for subscribers. Mere deployment of the 3G Networks will not automatically incite content aggregators to start developing contents. Additional investments in supporting infrastructure like in areas of digital map for those going into location based VAS, promises to be one of the leading services in Enterprise solution VAS in Nigeria.
Prevalence of low end mobile handsets is a major factor in the uptake and penetration of advance mobile technologies. Many services are not performing to their potentials despite their usefulness and many others which cannot be introduced. As the mobile markets grows, most new entrants are the low ARPU end users as most big spenders had already been taken up and hence most mobile handset coming on board might not have the features that support advance technologies. Operators worldwide are taking initiatives to collaborate with mobile phone makers to make 3G services available to more people with less entry cost through handset development, logistics and marketing initiatives. Notable among such collaborations is the 3G for all campaign spearheaded by the GSM Association that will reduce 30% from the LG phone that has been chosen.
Emmanuel Okoegwale, mobile value added services expert, said that operators need to focus on Value added services to survive the cut throat competition they are experiencing right now, reduction in voice revenues and to achieve growth forecast. According to him, there are quite a handful of innovative value added services like the Remote mobile phone book back up, by SaveMyContacts, Vehicle tracking systems, ring tone downloads and the highly successful caller Tunes. Caller Tunes has demonstrated that subscribers are ready to adopt a service that offers them an option of personalization. Mobile users always want to carry forward their individuality to their mobile phones.
While the informational and Mobile Commerce are really struggling in the mobile VAS market in Nigeria, entertainment value added services seems to be more popular because they are designed for mass appeal and leisure time usage while mobile commerce is popular in Banking industry but with few users. Simple reason is that subscribers have not just seen or perceived a compelling reason to engage the mCommerce and others. British Broadcasting Corporation reported that Nigerians are leading visitors to its site worldwide with 61% and distantly followed by South Africa at 19%.This is a classic example of usage due to compelling reason.
In other parts of the world, sport and adult contents are the chief revenue earners in the mobile value added service industry. Entertainment VAS seems to be the leading service that is driving the VAS market in Nigeria, this is because entertainment based VAS drive the market both value and volume terms.
As telecommunications sector is bracing up to implementation Number Portability, value added services stand as a major focus and driver of competition for forward looking operators to survive.
 


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NAVSA: NITDA Changes Existing Reality in Agricultural  Sector

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By Lukman Oladokun

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete” —Buckminster Fuller

We live in a time of digital transformation and it is driving change in all areas. The ubiquitous nature of ICT in revolutionising every human endeavour has made its adaptation also in agriculture universally popular. Developed nations are achieving food sustainability due to early adoption of ICT in their farming processes.

In a report to the G20 Agricultural Deputies in 2017 on Information and Communication Technology in Agriculture by the Food and Agricultural Organisation, (FAO), by 2050, the world population is expected to surpass 9 billion and for the world to meet the attendant increase in food demand, agricultural production will need to increase by 60 percent from its current level in order to meet the additional global food need. Application of ICT to collect and share timely and accurate information on weather, inputs, markets and prices to the stakeholders in agricultural value chain would play a significant role to meet the global food demand.

In Nigeria, with a population of about 200 million and 48.84 percent of the population in agricultural sector which provides employment for about 30 percent of the population, the importance of adoption of ICT to farming techniques cannot be over-emphasized. It is in recognition of the importance of sustainable food systems for food security and growth and the need to provide targeted information to every farmer that necessitated the federal government of Nigeria to mandate NITDA “to improve food production and security” and also “to ensure that the entire citizenry is empowered with Information Technologies through the development of critical mass of IT proficient and globally competitive manpower”.

The Agency has swung into action to actualize these mandates through many initiatives. As far back as the beginning of the millennium, the Agency entered into partnership with the United Nations Economic Commission for Africa, (UNECA) to produce the Nigeria ICT4D document which details the roles ICT could play in rejuvenating 12 critical sectors of the economy, with agriculture taking a prime of place.

As part of the efforts to help farmers in Nigeria adopt more efficient and sustainable production methods and reduce the burden of labour-intensive tasks and manage their farms better to help build a more resilient, sustainable and productive food system, the Agency in 2019 initiated a value addition process for agriculture named National Adopted Village for Smart Agriculture (NAVSA), an ecosystem-driven digital platform envisioned for the transformation of the agricultural sector in Nigeria. It is envisaged that the programme would assist the farmers and other stakeholders in agricultural ecosystem to navigate the journey across sector value-chain which involves farm production and management of their produce.

The main thrust of the programme is the integration of digital technologies and innovations to improve productivity and income of farmers and other ecosystem players in a bid to reposition agriculture as a viable business that has the potential of attracting the youthful population in the country.

At the launch of the pilot phase of the program in Jigawa State, one of the states that have comparative advantage in agriculture, the Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami observed that “the way agriculture is practiced needs to be modernised and transformed in such a manner as to encourage young talents to set up agriculture enterprises and position agriculture as a major means of economic diversification and growth, thereby increasing its contributions to the nation’s GDP.“

An in-depth analysis of the programme reveals it is aimed at helping the administration of President MuhammaduBuhari achieve  two of the three cardinal objectives of the administration by transforming the economy and fighting insecurity.

The pilot started with 130 farmers who were “adopted” into the programme. Expectedly, the initiative would give rise to new agricultural business models and opportunities that would stimulate huge potential in job and wealth creations with attendant effect of playing a major role in the diversification and shift from monolithic economy the nation is known for.

Arguably, previous government’s initiatives aimed at putting the agricultural sector on a pedestal to ensure food sufficiency could not be said to have been successful largely due to dispassionate mind-set of Nigerian youths who do not see a viable future in venturing into agricultural businesses.

This is occasioned by the retention of the old-fashion agricultural practices; inadequate provision of credit facilities, market to sell farm produce and other challenges.

Nowadays, with digital technologies making incursion into every human endeavour, coupled with relatively-large technological-savvy youths, a good articulated programme like NAVSA would proffer solutions to those challenges.

In his remarks at the closing of the two weeks long training on how the youths can use digital tools for agricultural purposes, the DG NITDA Mallam Kashifu InuwaAbdullahi maintained that the agricultural sector remains one of the critical sectors of the economy that can leverage digital innovations to create jobs, wealth and build a vibrant digital economy for Nigerians.

He however, decried the position of the sector in the usage of technological tools as dismal, adding that “agriculture remains one of the least digitised sectors in Nigeria despite its potential as one of the most veritable sectors for economic diversification.”

The twin challenge of meeting the domestic food requirement for attainment of a food sufficient nation and production of quality produce required for domestic and international market which are occasioned by inadequate access to appropriate information almost in real-time; inadequate entrepreneurship ideas and poor knowledge of agricultural value chain opportunities for existing and emerging Agricprenuers would eventually be  things of the past with the proper implementation and adoption of the programme. These will be achieved by providing information to stakeholders through the introduction of digital technologies and innovation across agriculture value chain in transformative manner.

In mitigating these challenges, the project focuses on adoption of “radical rethink” and collaborative approach between the public and private sectors that operate across the value chain. To achieve this, a proposed strategy which requires consensus building and connecting ecosystem players towards a shared vision has been identified.  NITDA, using NAVSA, intends to collaborate with 22 industry players, with each player entering into agreement or signing a Memorandum of Understanding (MoU) on expected roles it will perform.

The ecosystem includes farmers; Federal, State and Local Governments; input suppliers and produce off-takers; mobile/telecommunications service providers; Banks; FinTech; smart solutions service providers; renewable energy service providers; investors; development partners; agriculture platforms; startup businesses, agriculture experts and extension workers among others. The values these partners would bring to the success of the programme is alluded to at the closing ceremony of the training at Dutse,Jigawa State by the State Governor, His Excellency Mohammed Badaru. He confirmed that NITDA has partnered with telecoms operator, (MTN) and has developed a special package for smart farmers which comes with 4G SIM cards with a one year internet data subscription. Other add-ons to the digital tools include certified seeds, smart water pumps machines, fertilizers and other items.

He stated further that “NAVSA created a wallet scheme with seed capital of N200,000 for each smart farmer. Both the state government and NITDA contributed half of the amount each. The wallet scheme is designed to domicile money for proper projects execution whereas JASCO will serve as farm inputs service provider.

In ensuring that funds for the project are not used for other purposes rather than what it meant for, the project is designed in a way that all transactions are required to go through the platform with the aid of the digital wallet. Funds are not allowed to exchange hands and the only way a farmer could access the fund is through request on the platform to a NAVSA-registered input supplier.  In making it a self-sustaining venture, it is also designed in such a manner that allows smart farmers to plough 75 percent of their profits back to the open wallet where it can be cashed out and the remaining balance of 25 percent goes into a restricted wallet to increase the investment capital.

This laudable initiative intends to create 6 million jobs in the next 10 years. This may look so ambitious but the strategies put in place to accomplish the aspiration are well tailored with articulated Key Performance Indicators that provide clear guidelines for it. The strategy is targeted at adopting farmers in all 36 States and 774 LGAs in the country, support and equip them with skills and resources that will make Nigeria one of the leading nations in food sufficiency, security and exportation.

It has now become imperative more than ever before to adopt the use of technology to combat hunger and promote sustainable agricultural practices that are attractive to youths. Digital technologies and innovations are at the heart of managing agriculture value chain from seedling to off-take. And these are that targets of NAVSA going forward.

 


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Huawei’s Investment in Nigeria Reaches $76m

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Huawei Technologies Company Nigeria Limited, a leading information communication technology (ICT) solution supplier in the Nigeria telecoms market said it has made a total investment of $76 million in the country.

Huawei’s Investment in Nigeria Reaches $76m

Mr Trevor Liu, managing director of Huawei Technologies Company Nigeria Limited, made this known when he visited Mrs Zainab Ahmed, minister of Finance, Budget and National Planning, last week in Abuja.

He said apart from that, his company made procurements worth $630 million with a tax revenue of $103 million between 2016 and 2019.

According to him, Huawei has created over 400 direct job opportunities in which 70 per cent are Nigerians. This, he stated, is in addition to over 60,000 indirect job opportunities and over 470 Nigeria sub-contractors and partners.

The company has in the country established international training centre in Abuja, with Innovation and Experience Centre and Regional Network Operation Centre (RNOC) in Lagos, he said.

Mr Liu also stated that in the company’s ICT job creation efforts, there is over 54 Huawei ICT Academy in universities and polytechnics and has certified over 880 students and teachers each year.

Over 13,600 Nigerian students participated in Huawei ICT Competition for 2018-2019 and won third prize in the global final, the company’s chief informed the Minister.

According to him, Huawei has provided ICT training for its Nigerian partners, customers, converging over 900 engineers each year, while over 400 engineers have got the company’s authorised ICT certification.

In its programme for government officers, Huawei trained 1000 government officers in ICT technology in 2019 apart from training 2000 youth in ICT in 2016, and training 1000 girls in 2014-2015 basic ICT, he said.

In her remarks, Mrs Ahmed commended Huawei for its investment in Nigeria, assuring the company of the federal government support.

However, she appealed to the firm to assist the Nigerian education system with affordable solutions that would guarantee digital value additions and accessibility to the rural communities so as to expand the country’s rural telephony.

The Minister said the education system has been most impacted by COVID-19 and only students and children in the cities have been able to have access to digital learning.

“A lot of our kids and students in the rural communities are not fortunate enough to plug into such platform,” she said.

She also appealed to Huawei to bring into Nigeria assembly plants and repair workshops that could help create jobs and expand the value chain for the Nigerian citizenry, noting that the country is a big market.


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Heritage Bank’s MD Calls for More Impactful Role in Banking to Aid Speedy Economic Recovery

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In the quest to aid speedy economic recovery and impactful service delivery to stakeholders caused by macro-economic headwinds and Covid-19, banking sector’s players have been charged to maximize the opportunities by re-strategizing its roles that will address emerging risks.

Ifie Sekibo, managing director/CEO of Heritage Bank Plc, made the call during the 47th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) with the theme “Elevating Internal Audit’s Role in the Face of Emerging Risks and Opportunities” held virtually on Microsoft Team’s platform, which was organized and hosted by the Heritage Bank, at the weekend.

Sekibo who was represented by Jude Monye, executive director, Heritage Bank Plc, whilst addressing internal auditors of banks, inquired from the bankers on the readiness of the Internal Audit function to lend the necessary support in exploiting and maximising the opportunities without impairing their independence.

He, however noted that with the rapid changing developments forced by the pandemic sweep across globe that have upended organisations in every sector of the economy, banking inclusive; internal auditors would notice that their modus operandi are outdated.

To this end, he stated that this was the most auspicious time for Chief Audit Executives to rethink how they perform various aspects of their audit assignments.

Sekibo suggested that auditors must “become versed in cybersecurity, artificial intelligence, data analytics, fraud management, regulatory pronouncements, forensics etc and having equipped himself, present balanced, objective audit reports to Executive Management while striking the right balance between the assurance and consulting responsibilities.”

He further hinted, “Embracing new processes and tools to modernize and maximize the audit function helps not only with the perception of internal audit’s value, but also the reality of its contributions. Opportunities to evaluate include virtual auditing, electronic workflow management, and distance team-building and development.”

According to him, it becomes imperative for audit teams to embrace change, harness it and use this season to strategize on what internal audit can be in the future, whist noting that only Chief Audit Executives that maximize the opportunity to refresh and reposition will make their role more relevant and impactful for stakeholders.

Meanwhile, he commended auditors for their contributions to the industry including inputs made in shaping policy directions by regulators and the fight against fraud and other financial crimes which helped in no small measure in deepening confidence of the banking public.

In the same vein, Yinka Tiamiyu, Chairman of ACAEBIN,reiterated the need for internal auditors to maximize opportunities of the current challenges facing the industry, as each day brings new developments that directly influence the likelihood and potential impact of banking future.

According to him, there are challenges on our part as Bankers in meeting up with the needs of our customers and the general public, and we must ensure that such challenges are surmounted.

He stressed on the need for regular annual audit plan to be reviewed quarterly to address current events that have significant impacts on the business, whilst ensuring that the key players continuously provide banking services to customers in a convenient and safer way.

“On our part, the need for improvement in service delivery and safety of customer’s funds as we digitalized our product offerings are concerns facing the industry, as such we must not relent in our efforts to get strong authentication mechanisms as we make our services more convenient and easier for Customers.  Banks should strive to find solution to the problems associated with identity theft as we pursue digital products and inclusive banking. This is to ensure that customers are happy with us and complaints minimized,” Tiamiyu urged internal auditors of banks.

 


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