Page 203 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

Short codes, while not necessarily a direct ITU specification, are still a finite and scarce resource and may
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be part of the national numbering plan.

While in many countries DFS access for consumer will be via a nationally mandated short code, in many others
individual services may have a 3 or 4-digit short code that become the ‘brand’ of the provider.

Short codes can be obtained in the following ways:

a. Directly from the national telecommunications authority if that is the issuing authority for all short
codes. 155

b. From the MNO, who is allocated a numbering block or specific code by the national regulator. 156
c. From TSPs acting as aggregators, who may themselves get the short code numbers directly from
the telecommunications regulator or from an MNO who has been allocated the numbers by the
telecommunications regulator. 157

d. From a licensed MVNO, who may themselves get the short code numbers directly from the
telecommunications regulator or from their home MNO, who in turn has been allocated the numbers
by the telecommunications regulator.

7.3 Competition aspects

Generally, choices b, c and d (above) present specific competition issues for non-MNO entities if the codes
are initially allocated to the MNO. In such scenarios, the MNOs control the entire vertical chain of access,
from the infrastructure to the short code allocation and access, and may result in ‘refusal to supply’ behavior.

If a short code is obtained via a leasing agreement with an MNO, it remains the property of the MNO. If an
MNO is involved in DFS, conflicts of interest may arise such that the MNO may decide not to allocate short
codes to a potential DFS competitor; delay allocation of a short code to a competitor, or the correct pricing
band thereof; or allocate and then withdraw the short code after DFS operations had begun. 158

7.4 Country examples
Kenya

The Communications Authority (CA) currently assigns certain categories of SMS short codes in blocks while
giving the assignee MNOs the responsibility of undertaking secondary assignment of the codes to other SPs
and end users. This, they say, is done for the convenience of quick industry operations, and because most
of these codes are technically network specific codes and thus not based on the international ITU-T E.164
numbering standard.
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154 In many countries, numbering resources used in the provision of communications services are seen as a valuable scarce national
resource, finite in size whose management and administration affects the national interest.
155 In India, the national DFS access prefix is *99# is run by the NPCI. In Tanzania, MNOs, third party providers of VAS and users such
as banks receive USSD short codes directly from the regulatory authorities. See also Mazer, R (2015) USSD Access: A Gateway and
Barrier to Effective Competition, available at https:// goo. gl/ za1P1C . By contrast in Kenya, licensing of USSD short code services is
done by the regulatory authority, but it is the MNOs which issue the codes.
156 In tandem with the increased popularity of short code services, there is also a growing demand for service interoperability and
common codes between networks. Though many of these SMS short codes are network specific and therefore are not based
on the international ITU-T E.164 standard, end-users of any network can use the same code to access the same services, if the
service is accessible in their respective networks.
157 In some cases, SPs may obtain secondary assignments from ‘Network Facility Providers’ and ‘Application Service Providers’ with
primary assignments from a regulator for provision of short codes and even premium rate numbers. See CA (2012) ibid
158 See the case of Ezee Money in Uganda, below.
159 See CA (2012) Procedures And Guidelines For The Management Of Telecommunications Short Codes And Premium Rate Num-
bers In Kenya, available at http:// bit. ly/ 2jlOjpe

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