General Licensing Conditions For Value Added Services (VAS) Licensing in Nigeria

This focus of this article will be the general conditions as outlined by the Nigerian Communications Commission (NCC) for the grant of licensing for Value Added Services VAS in Nigeria as distinct from the provisions of the NCC VAS framework which was the focus of a previous article in my Telecomms Law article series. These conditions will thus treated in detail serially

Definitions.

 “Value Added Services” means enhanced or value added communication data and/ or voice services that act on the format, content, code or protocol of information in order to provide the user with additional or different information or that involves subscriber interaction with stored information, including computer and data processing services, data information and exchange services, but excluding transmission services to or over the internet. 

General Conditions 

Compliance with the Act and Regulations 

-The licensee shall comply with the provisions of the Act and regulations made thereto and with any direction, determination or order that the act provides for the NCC to give or make.  

Approval of Tariffs, Terms and Conditions 

-The licensee shall lodge a notice of tariffs with the NCC which sets out in relation to each kind of service that the licensee proposes to offer:

(a) a description of the service; 

(b) details of the nature and amounts of charges payable for the service, and 

(c) the method adopted for determining the charges. 

– If the charges in the tariff plan vary, in nature, in their amounts or both, the notice must set out, why and how the charges vary.

 – The notice must be precise and detailed enough to be used to work out the nature and amounts of charges payable for the supply of the particular service. 

– The notice of tariffs lodged with the NCC must state the period 

(i.e. the term) for which it is to be in force. The term must not begin until approval for the tariffs is given by the NCC or at a time when a previous tariff of the licensee on the same service is still in force. 

-The licensee shall not impose any terms and conditions for the provision of any specified telecommunications service until such terms and conditions have been approved by the Commission.

Prohibition of Cross-Subsidies 

-The licensee shall ensure that his business under this Licence is not unfairly cross-subsidised from any other source, except in cases where the licensee is under an obligation to provide service at a place in an area in which the demand or the prospective demand for the service is not sufficient, having regard to the revenue likely to be earned from the provision of the service in the area, to meet all the costs reasonably to be incurred by the licensee in providing the service there, including; 

• the cost of equipment necessary for the provision of the service there;
• the cost of installing, maintaining and operating such equipment for the purpose of providing service there, and
• the cost of the trained manpower necessary to provide the service there; in which case prior approval shall be obtained from the Commission. 

Prohibition of Linked Sales  

– The licensee shall not make it a condition of: 

(a) providing any telecommunication service; 

(b) supplying any telecommunication equipment; that any person should acquire from the licensee or from any other person specified or described by the licensee; 

• any telecommunication service other than the telecommunication service requested save where that service cannot be provided without the provision of that other telecommunication service; or

• any telecommunication equipment not incorporated in the 

systems supplied save where the telecommunication service requested cannot otherwise be provided or the telecommunication equipment cannot otherwise be used. 

– Except where the Commission has agreed otherwise, the Licensee shall not do any of the things described in the relevant provisions of NCC licensing conditions together with the other thing in a manner or for charges or on terms or conditions more favourable than would be available for doing one thing without that other thing. 

–  Notwithstanding relevant provisions of NCC Licensing conditions,the licensee may where it supplies as part of the same transaction or interconnected series of transactions two or more items of telecommunications equipment, offer quantity discounts or more favourable terms and conditions in respect of quantity in relation to such equipment which it so supplies whether those items or equipment are of the same or different description.

Prohibition on Undue Preference and Undue Discrimination 

– The licensee shall not (whether in respect of charges or other terms or conditions applied or otherwise) show undue preference to or exercise undue discrimination against any particular person or persons of any class or description in respect of;

(a) the provision of a service under this licence; or

(b) the connection of any equipment approved by the commission.

– The licensee shall be deemed to have shown such undue preference or to have exercised such discrimination if it unfairly favours to a material extent a business carried on by it or by its lawful telecomms associates in relation to any of the matters raised in the relevant provisions of the licensing conditions of the NCC so as to place at a significant competitive disadvantage persons competing with that business.

–  Any question relating to whether any act done or course of conduct 

pursued by the licensee amounts to such undue preference or such undue discrimination shall be determined by the commission, but nothing done in any manner by the licensee shall be regarded as undue preference or undue discrimination if and to the extent that the licensee is required to do that thing in that manner by or under any provision of this Licence. 

Code of Practice for Consumer Affairs 

– The licensee shall in consultation with the commission, prepare and publish in accordance with provision 2.9 of the NCC Licensing conditions not later than three (3) months after the date the provision of a telecomms service comes into operation a code of practice including:- 

(a) Guidance to their customers and employees in respect of disputes or complaints relating to the provision of service by them; 

(b) Advice to such customers on charging, billing and enquiries in relation thereof; and

(c) Advice and procedures on the proper use of the service by such customers.

 -The licensee shall consult with the commission once every year about the operation of the code of practice. 

Code of Practice on the Confidentiality of Customer Information

-The licensee shall take all reasonable steps to ensure that its employees who are engaged in the licensed Telecomms undertaking observe the provisions of a code of practice which:

(a) specifies the persons to whom they may not disclose information about a customer of the licensee or that customer’s business which has been acquired in the course of the telecommunications business without the prior consent of that customer; 

(b) regulates the information about any such customer or his business which may be disclosed with his consent.

-The licensee shall within Three (3) months of the date on which this Licence enters into force submit a draft of the code of practice to the commission for its approval and if the licensee and the Commission fail to agree on the provisions of the code they shall be determined by the commission.

-This condition is without prejudice to the duties at law of the licensee towards its customers .

Arbitration of Disputes with Customers  

– If the licensee provides switched telecommunications services it shall include in the standard terms and conditions on which it provides telecommunication services provisions giving persons who have entered into contracts with it for the provision of telecommunication services by the licensee the opportunity to refer to an inexpensive independent arbitration procedure, instead of to a court of law, any dispute relating to the provision of these services which does not involve a complicated issue of law or a sum greater than such sum as the commission may from time to time determine. 

– The arbitration procedures and the method of appointment of the arbitrators shall be subject to consultation with the NCC. 

Transfer of Licence 

– The licensee shall not transfer or assign its Licence to another party without the written approval of the commission. 

– A person to whom a licence is to be transferred shall apply to the NCC for a licence to carry on the relevant telecommunications undertaking on the prescribed application form and shall satisfy the conditions set down by the commission before any transfer of licence may be considered. 

– Where the licensee seeks to transfer its licence to another person, it shall comply with all terms and conditions of its licence as at the date of transfer; and shall have paid all outstanding fees to the commission.

– The NCC may decline any application for transfer of licence and provide reasons in the event of non approval.

Approval of Joint Ventures  

– The licensee shall give particulars of any of the agreements or arrangements to which this condition applies for approval of the commission before the taking into effect of such agreements or arrangements. 

-These agreements and arrangements are: 

(a) an agreement with any person for the establishment or control of any body corporate for the purpose of: 

• providing telecommunications services in Nigeria which requires a licence; or

• the production of telecomms equipment for supply in Nigeria where that production would lead to a monopoly situation which would not otherwise exist in relation to the supply of telecommunications equipment of any description in Nigeria; 

(b) an agreement for the establishment of a partnership for any of these purposes and in those circumstances; 

(c) any other agreement or arrangement in the nature of a joint venture for the purpose of providing telecommunications services which requires a mcence.

Associates  

– Without prejudice to the licensee’s obligations under these conditions in respect, in particular, of anything done on its behalf, where; 

(a) any Associate of the Licensee does anything which the Licensee is prohibited from doing under these conditions or fails to do anything which the licensee is in the circumstances required to do; and  

(b) the NCC is of the opinion: 

• that in consequence the licensee is seeking to or is in a material and substantial way avoiding obligations which would apply under these conditions if the thing had been done or not done by the licensee; and 

• that having regard to the duty imposed on it by Section 4 of the Communications Act it ought to make a direction under this fondition, then the licensee shall take such reasonable steps to ensure that the associate ceases to do that thing or otherwise to remedy the matter as the NCC directs him to take. 

– For the purpose of this condition a person is an associate of the licensee if he is a subsidiary of or another body corporate controlled by it. 

Pre-Notification of Changes in Shareholding 

– The licensee shall notify the commission of any change in the control of any of the shares in the licensee to which this condition applies and any such notification shall be given as soon as practicable after the change in question is proposed. 

Payment of Fees 

– In consideration for the granting the licensee the right to operate and provide the service, the licensee shall pay to the commission: 

(a) The licence fee; and  

(b) An Annual Operating Levy which shall be assessed at one percent 

(1%) of the Licensee’s Net Revenue for the relevant period being its Gross Revenue less such costs as may be stipulated in the AOL Regulations.

-The most recent audited account or where this is not available, the management account or any other account or projection of the licensee’s operations will be admitted for the purpose of calculating the turn-over for the year under consideration and may be duly adjusted when the years audited account becomes available. 

– The commission shall determine the licence fee payable for and in respect of any renewal of the licence. 

Requirement to furnish Information to the Commission

– The licensee shall furnish to the NCC, in such manner and at such times as the cmmission may request, such documents, accounts, estimates, returns or other information and procure and furnish to it such reports as it may reasonably require for the purpose of exercising the functions assigned to it by or under the act.

Revocation 

– Notwithstanding provisions of this licence the commission may at any time revoke this icence by Twelve (12) Months notice in writing given to the licensee at its registered office where the licensee is in breach of any of the conditions attached to this Licence and the breach has not been rectified within Twenty one (21) days after the NCC had notified the licensee of the breach.

– Notwithstanding the provisions of the conditions of this litcence the NCC may at any time revoke this licence by Three (3) months notice in writing given to the licensee at it’s registered office in any of the following circumstances: 

(a) if the licensee agrees in writing with the commission that this licence be revoked; 

(b) if the licensee ceases to carry on its business for which this licence is granted;

(c) if any amount payable under NCC VAS licensing conditions is unpaid Fourteen (14) days after it became due and remains unpaid for a period of Fourteen (14) days after the Commission notified the Licensee that the payment is overdue, such notification not to be given earlier than the sixteenth day after the day on which the payment became due; 

(d) if within Six (6) months of the granting of this licence, the licensee has not commenced full operation to the satisfaction of the Commission;

(e) if the Licensee fails to ensure that it’s equipment is type approved by the commission or a body approved by or accredited to the commission; 

(f) if the Licensee: 

• is unable to pay its debts,

• enters into receivership or liquidation,

 iii. takes any action for voluntary winding-up or dissolution or such action is taken by any other person or enters into any scheme of arrangement (other than in any such case for the purpose of reconstruction or amalgamation) upon terms and within such period as may previously have been approved in writing by the NCC or if a receiver or trustee is appointed or if any order is made for it’s compulsory winding-up or dissolution. 

Exceptions and Limitations

Unless the context otherwise requires the licensee’s obligations under these conditions shall have effect subject to the following exceptions and limitations: 

– The licensee shall not be held to have failed to comply with an obligation imposed upon it by or under these conditions if and to the extent that the licensee is prevented from complying with that obligation by any physical, topographical or other natural obstacle, by the act of any national authority, local authority or international organisation or as a result of fire, explosion, accident, emergency, riot or war.

Amendment of the Licence

– Subject to the conditions mentioned below, the NCC may amend this licence from time to time where objectively justifiable if the NCC determines that such modification or amendment is necessary to achieve the objectives of the act or any relevant regulations, or is in the public interest, taking into consideration the reasonable interest and contractual rights of the licensee.

– Before modifying or amending this licence, the commission shall give the licensee written notice of its intention to do so together with a draft copy of the intended modification or amendment, and the licensee may make submissions to the commission by submitting them to the commission within the time period specified by the commission but not less than Thirty (30) days from the date of the written notice. 

– After expiry of the notice specified in the condition above-mentioned, the NCC shall decide on the next cause of action, taking into consideration any submission made by the licensee and the principles of fair competition and equality of treatment, amongst others. 

-Any modification or amendment to this licence shall be made in accordance with the procedures laid down for such purposes and shall be published by the commission.