Govt failing to regulate mobile value added services

KATHMANDU, APR 26 -Despite numerous value added service (VAS) offerings from telecom companies, the government has failed to effectively regulate VAS in the absence of a standard guideline. As a result, customers’ complaints about unauthorised activation of such services are on the rise, according to a source at the Nepal Telecommunications Authority (NTA).

The NTA is the sole agency that issues permission to telecom service providers to operate VAS, which has comparatively high charge compared to other services. Even as the NTA issues permission, it doesn’t have any rules to regulate VAS and check if customers are being charged higher tariff.

“It’s high time the government regulated VAS as the trend of luring customers with new services is increasing,” said NTA Director Ananda Raj Khanal. He said the NTA is serious about the VAS issue and will make efforts to ensure that customers are not charged high.

VAS refers to services beyond the standard voice calls offered by telecom companies or third-party VAS provider, also known as content provider.



Domestic telecom operators are offering value added services ranging from simple ring tones to crucial bank transactions. One of the simple such service is the missed call alert — for which Ncell charges Rs 2 a week and Nepal Telecom (NT) charges Rs 30 a month, but its planning to slash the charge to Rs 8 a month.

Going by the existing government provision, each value added service has to be approved by the NTA after determining appropriate tariff. However, the NTA source said the authority has been issuing permission to the tariffs proposed by operators without considering the customers and international practice. “Service providers too are not providing proper information on tariff and procedure for deactivating VAS if once subscribed,” the source added.

Telecom companies are offering over two dozen such services such as missed call alerts, personal ring back tone, call ring back tone, weather information, horoscope, m-health, e-banking, m-banking, mobile payment, load-shedding schedule, and SMS poll. Fundamentally, services like SMS, MMS and mobile data services also fall under VAS.

The NTA has issued permission for different services, whose charges range from Rs 1 to Rs 10, excluding applicable taxes, according to NTA officials.

Mobile VAS is becoming a major product for telecom companies and third-party content providers for revenue generation fuelled by the growth in mobile penetration and increased trend of using data through mobile handsets. VAS also helps companies increase their average revenue per user.

An NT official said although the revenue from VAS is little presently, the service will help companies earn more in the future. “The demand for voice might go down due the market nearing the saturation point. But VAS can help companies maintain profit growth in the future,” he added.

The latest management information system report of the NTA has shown the country’s mobile telephone penetration rate has reached 65.65 percent. After the implementation of its major projects like 10 million GSM mobile lines and 2 million IP CDMA lines, NT also plans to expand its VAS, beside expansion of voice service in rural areas.