Mobile technology has transformed how businesses engage with consumers, offering diverse solutions like USSD banking or SMS-based medical consultations. For many startups and businesses, collaborating with telecommunications companies (telcos) is an effective strategy to connect with mobile users and enhance service delivery. Nigerian telcos, recognizing the demand for digital experiences, have ventured into non-traditional offerings, such as media distribution, mobile money, and loan services. A significant area of collaboration lies in Mobile Value-Added Services (VAS), encompassing products like ringback tones, SMS notifications, mobile money, and interactive voice response (IVR) systems. These services allow businesses to offer improved digital interactions for their users. However, establishing partnerships with telcos requires navigating regulatory requirements, proposal processes, and technical integrations.
Steps for Telco Partnerships
Securing Approvals
Services that require unique shortcodes need approval from the Nigerian Communications Commission (NCC). This usually involves collaborating with a licensed VAS company, as shortcodes are issued exclusively to licensed entities.
Acquiring Licenses and Contracts
Depending on the service, additional licenses might be necessary. For instance, financial services require banking licenses. Media-related services, like ringback tones, often demand formal agreements with content creators or copyright owners.
. Submitting Proposals to Telcos
After regulatory approvals, businesses must pitch their services to telcos. Approaches range from cold outreach to leveraging connections or working with licensed VAS providers who already have established relationships. Proposal outcomes can result in acceptance, rejection, or suggested modifications.
Technical Integration
Once a proposal is approved, technical teams from both sides collaborate. This might involve access to APIs, web services, or direct connections to telco gateways using protocols like SMPP for SMS services. Integration is followed by rigorous quality tests and user acceptance testing (UAT) before the service is launched.
Challenges of Telco Partnerships
Telco collaborations are not without hurdles. Professionals at companies like HollaTags, which specialize in facilitating telco partnerships, highlight common challenges:
Undefined Timelines: There’s often no fixed schedule for integrating services, leaving businesses to chase updates while their projections hang in uncertainty.
Technical Ambiguities: Limited documentation for integrations leads to delays as technical teams repeatedly seek clarifications.
Unbalanced Revenue Sharing: Telcos often claim the majority of the revenue, leaving partners with smaller shares despite incurring significant costs.
The Telco Perspective
From the telco’s viewpoint, certain practices are aimed at mitigating risks. Deploying new services involves uncertainties like market demand and deployment success, as well as substantial forex expenditures for equipment and maintenance. This justifies, to some extent, their revenue-sharing policies. Experts suggest that businesses can negotiate for volume-based revenue adjustments, allowing better profit shares as the service gains traction. Additionally, focusing on partnerships with a single telco to test market feasibility can be a pragmatic starting point.
Maximizing the Partnership Potential
Telco partnerships offer businesses unique opportunities to reach users via mobile platforms, whether through USSD applications, SMS alerts, or phone-bill payment integrations. However, achieving success requires thorough planning, regulatory compliance, and adaptability. By understanding the intricacies of telco collaborations, businesses can unlock significant value while navigating the challenges involved.
