NCA’s move to shut down sub-allocated short codes is anti-innovation – GCT

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The National Communications Authority
The National Communications Authority

The Ghana Chamber of Technology (GCT) has described the recently directive by the National Communications Authority (NCA) that all sub-allocated short codes should be deactivated as anti-innovation and a move that threatens to defeat the regulator’s own mandate to ensure affordable world class and innovative services across the ecosystem.

The Chamber’s comment is in response to an October 22, 2021 directive from the NCA to all industry players to deactivate all sub-allocated short codes that come in the form of extensions on short codes approved for specific service.

The NCA noted that industry players to whom short codes have been approved have also added extensions to those short codes and sub-allocated the extended versions to third parties to run other services not directly approved by the NCA.

For example, for approved short codes like 311, the authorization holders add extensions like *311*1 or *311*2 and so on, and give those extended versions to other service providers to use without the consent of the NCA.

The regulator noted that the act is illegal and should be stopped within the next 30 days, or the original short codes themselves will be deactivate.

But GCT thinks that “the directive that appear to be in contrast and potentially detrimental to the realization of both the NCA’s stated mandate; and the development of a thriving industry ecosystem that allows technology companies to deliver world class affordable communication solutions to the good people of Ghana.”

Below are the full details of their concerns about the directive and proposals for the way froward, contained a statement signed by the Chamber’s CEO, Dr. Augustina Odame:

Anti-Innovation

The sub-allocation of short codes reduces both cost and time-to-market barriers for innovators in the space, enabling them to deliver innovative and tailor-made market solutions quickly and at scale to Ghanaian individuals and businesses alike.

This is particularly important for service provision to highly differentiated last-mile market segments whose commercials may need significant time to warrant the cost of a dedicated short code. The short code extensions also provide an avenue for testing products before making the significant cost outlay of a dedicated short code.

An as-is implementation of the directive would therefore have significant anti-innovation effects, which would be in direct conflict with the NCA’s mandate to support innovation and a vibrant ecosystem, as well as the national digital transformation agenda.

Cost Implications

To Industry: While the move may result in increased revenue for VAS providers who are going to host these codes, small businesses benefitting from the technology and unable to afford a dedicated short code would suffer, and/or be compelled to fold up.

To the Consumer: The increased cost to businesses in general, small, and large, would be passed on as increased prices to consumers, working financial inclusion, cash-lite agenda, and the general national digital transformation agenda.

Capacity Considerations

As it stands, it is our understanding and conviction that the telecommunications companies (Telcos) would require more time than the notice provided to generate and ensure adequate integration and maintenance infrastructure to support the provision of sufficient 3-digit short codes to serve the available market should all current users apply to be integrated.

Currently, it takes not less than ten (10) weeks and often up to six (6) months to complete the approval and integration process. The sub-codes are an innovative way to scaling the limited resources available while democratizing and reducing cost for services delivered on this rail.

The Capacity considerations alone means that an implementation of the directive by the indicated deadline of November 30th, would result in an industry pandemonium rife with service disruptions in the best-case scenario, and the tipping of some VASPs and their clients struggling to pull themselves up from the crippling financial effects of COVID-19 over the edge into folding up their businesses.

Pursuant to this, the Chamber would like to propose the following:

1) That the NCA reconsider its directive to shut down all short code sub allocations by the end of the month in consideration of supporting innovation and of the potential crippling cost effect to small businesses and the customers they serve; and to avert the widespread industry pandemonium and service disruption; while allowing the Telcos to build capacity to absorb new applications and integrations.

2) That the NCA could increase the per short-code fee, and then give the short code owner responsibility for what happens under that short-code, extensions, and all, and engaging the VASPs to update them on who they have assigned the sub codes to.

3) That the NCA reviews the permissions and conditionalities of allocated short codes, to reflect the innovation and cost considerations highlighted above.

4) That the NCA engage more directly with the VASPs through the Chamber, on the underlying motivation for issuing the directive, as knowing the NCA’s objectives or concerns in this wise would inform how we can better position ourselves as an industry to help them address and achieve these objectives in a mutually beneficial manner.

5) That the NCA clarifies the Technicalities of the Directive to clearly define where exactly the line in the sand is, and what would thus constitute an infraction. We look forward to a favorable consideration of our submissions, and to working with you towards a mutually beneficial solution.

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