Innovation Markets Telecoms

WASPAN: Banks’ sale of recharge cards killing dealers

Dealers of mobile networks’ recharge cards in the country are gradually losing their business to banks, concerned telecom stakeholders have said. The electronic sales of airtime by the commercial banks is not only affecting dealers, but also eliminating sellers of call cards on the street.

The President of Wireless Service Providers Association of Nigeria (WASPAN), the umbrella body of telecom VAS providers, Mr Chijioke Ezeh, who expressed worry over the development, said very soon, there may not be anybody in the recharge card business but the banks. “I don’t know when last you saw people selling recharge cards on the street, the banks have taken over and they tie it to our bank accounts. They have wiped away the lowest recharge card sellers and the dealers are now at their mercy. With what is happening, recharge cards business will soon die,” he lamented.

Aside that, Ezeh said the sales of airtime by banks through their ATMs or USSD numbers should not have been allowed by the telecoms regulator because they are not contributing to the networks they are profiting from. “Banks are not supposed to be selling recharge cards because in the first place, that is not what they are licensed to do. They are just extracting values from the telecommunications sector without adding any,” he said.

The WASPAN President noted that while banks are currently talking about financial inclusion they are relying on telecommunications infrastructure to achieve that.  “When they talk about financial inclusion, not that they will go and open branches in Maiduguri, they will want MTN and others to install masts in those areas so that they can use it to provide financial services. So, why should telecom operators to invest and some continue to benefit from it without adding any value?  All the money CBN generates from the banks sits with CBN, but the ones we generate continues to expand the economy and they ride on us as OTT because a bank selling recharge cards is an OTT”.

“When they came to Nigerian Communications Commission (NCC) to ask for short code, it was not for recharge card, it was so that people will check balance. From there, they started selling recharge cards. Today, they are selling newspapers and that is what NCC licenses me for. They sell and charge it directly from your bank account and even if NCC wants them to pay, the CBN will not allow that. They are encroaching from their financial space into telecoms,” Chijioke said.

The VAS providers, who are licensed by NCC, offer services such as caller ring back tone, mobile music, mobile advertising, mobile health tips, mobile news among others, all of which are delivered to the consumers via the mobile networks. Consumers pay for these services through their airtime which is in custody of the network operators, while the operators are to pay the cash value of the deal to the VAS providers according to their agreed revenue sharing formula.

However, their business has come under heavy heat recently as the NCC stopped all service auto-renewal on the mobile networks to protect subscribers who have been complaining over forceful subscription for services and illegal deductions.

The VAS providers at a recent forum had urged the regulator to lift the ban, arguing that their revenue base had gone down to zero level ever since the new policy was implemented earlier this year. They claimed that the ban had plunged their revenue as subscribers are no longer subscribing for their services and they could not auto-renew existing subscriptions.

The commission had last year  issued a directive to all network providers to desist from carrying out automatic or unwarranted renewal of data packages without their consent and forcefully subscribing consumers to VAS services. According to NCC, the penalty for forcefully subscribing consumers to the VAS service without their consent will attract a fine of N5 million for any service provider who defaults the directive.


Add Comment

Click here to post a comment

Subscribe to Our Newsletter

We keep your data private and share your data only with third parties that make this service possible. Read our Privacy Policy.


%d bloggers like this: