Navigating Telco Partnerships in Nigeria: A Guide for Startups

As mobile technology transforms everyday life in Nigeria, businesses are increasingly interested in partnering with telecom companies (telcos) to reach mobile users. From banking via USSD codes to consulting doctors by SMS, mobile use has reshaped digital engagement. Nigerian telcos are now expanding beyond voice, SMS, and data, offering media content, mobile money, loans, and other services.

One area where telcos collaborate with businesses is in Mobile Value Added Services (VAS) like ringback tones, mobile money, interactive voice response (IVR), and SMS notifications. These services often require telco partnerships to deliver a seamless mobile experience. Here’s a look at how such partnerships typically unfold:

Securing NCC Approval

For services needing unique shortcodes, businesses first need approval from the Nigerian Communications Commission (NCC). This often involves a VAS-licensed company, as shortcodes are generally limited to licensed providers.

Obtaining Other Licenses and Contracts

If the service requires additional licensing, such as for financial services, these must be secured beforehand. For example, partnerships offering media, such as ringback tones, require formal contracts with content rights holders.

   Proposing the Service to Telcos

Once approvals and licenses are in place, the next step is presenting the proposal to a telco. This can be done through direct contact, but a more efficient route is often through an experienced VAS provider with existing connections. The proposal stage may lead to acceptance, amendments, or rejections.

Integration and Testing

At this stage, technical teams connect the partner's service to the telco, which may involve API access or direct connections to gateways, depending on the service. Quality checks and user acceptance testing (UAT) follow, ensuring the service meets telco standards before launch.

Common Challenges in Telco Partnerships

Partnering with telcos can be complex, as HollaTags, a facilitator of telco partnerships, shares. According to their CTO, timelines for implementation are often vague, leading to prolonged waiting and constant follow-ups. Integration also lacks thorough documentation, resulting in repeated back-and-forth communication for technical clarifications. Their Account Manager adds that revenue shares are often heavily weighted in favor of telcos, leaving smaller margins for partners despite their operational costs.

The Telco Perspective

Adia Sowho, a former digital business leader in the telco sector, offers additional insights. She explains that telcos take on risks when partnering with startups, from market uncertainty to high costs of deployment. To manage this, they adopt a conservative revenue share model. Adia advises startups to negotiate for volume-based revenue splits, allowing for more favorable terms as their product gains traction.

Maximizing the Potential of Telco Partnerships

For startups aiming to enhance their reach via telco partnerships, there’s much to gain from services like USSD applications or mobile billing options. However, a successful partnership requires careful planning, flexibility, and patience to navigate the complexities and create long-term value for both partners and users.