OTT Services: Why Telecoms Companies May Block Nigerians From Enjoying Skype, WhatsApp Calls

Advertisement

Telecoms companies in Nigeria may be adopting drastic measures to boost revenue, by blocking subscribers from accessing Skype and other Over-the-Top, OTT services.

With the hopes to hit a revenue target of N20tn and address concerns over revenue loss from international calls, subscribers might also be prevented from performing certain functions like voice and video calls on WhatsApp and Facebook, among other OTT services.

Punch reports that a manager at one of the major telcos in the country said the measure is an aggressive approach to further stop revenue loss to OTT players on international calls, having already lost about N100tn between 2012 and 2017.

According to the manager; “If we fail to be pro-active by taking cogent steps now, then there are indications that we may lose between N20tn and N30tn, or so, by the end of 2018.”

He explained that the increasing rise of the OTT players, who provide voice and Short Message Services, or apps such as WhatsApp, Skype, Facebook, BlackBerry Messenger and Viber, was eating deep into the voice revenue of telecommunications companies in the country by more than 50 per cent.

Read Also: Nigerians To Pay More For Phone Calls As NCC Reviews Call Tariffs

A report recently published by a United Kingdom-based research and analytics company, Ovum, stated that Nigerian customers using the OTT voice applications would cost the country a $386bn loss accrued over a period of six years – between 2012 and 2018.

Matthew Reed, Principal Analyst at Informa Telecoms and Media, said the main fear of the telecoms operators generally will be that customers will increasingly use Skype as a substitute for conventional international calls.

Telecoms operators in the country said that international calls made up a critical part of their revenue because of Nigeria’s large expatriate and Diaspora population.

According to them, the apprehension over the shift from voice call, is worsened by the steep decline in voice revenue.The operators stated that at the start, they were looking to offset the fallout of intense competition by closing gaps that were spurring revenue leakage in the business.

The Nigerian Communications Commission has been blamed for not properly regulating the sector in order to protect and keep them in business.

telecom-1

Major operators in the country’s $38bn telecoms market such as MTN, Globacom, Airtel and Etisalat said if the NCC failed to take decisive actions, they would keep struggling to counter a trend in which the prices of basic voice and data services were declining.

For instance, MTN Nigeria said that the OTT services had a “cannibalizing effect” on network operators’ voice and data revenue, because they provide “free” services, which duplicate those already provided by network operators such as voice calls and the SMS.

According to the firm, a ready example is WhatsApp, which provides free instant messaging services as an alternative to text messaging services provided by mobile network operators.

MTN Nigeria’s Public Relations and Protocol Manager, Mr. Funso Aina, pointed out that WhatsApp has also launched a free voice service, arguing that the OTTs allow users to send unlimited texts, images, video and audio messages free of charge, using their current data plans.

Mr. Aina explains that the problem is that these services are provided using network infrastructure of the operators, but without commensurate compensation to operators. He added that the operators are at the same time denied of revenue to grow their networks, thereby impacting on service delivery and long-term sustainability. He said;

“For instance, to date, MTN has invested over $15bn in building its network in Nigeria. You can now imagine an OTT leveraging the network to deliver its content without investing a kobo locally. The impact on revenue is huge.

“Furthermore, because these entities are not licensed, and because they have not built any infrastructure locally, they do not have the same costs as the licensed operators.

“They do not pay taxes, they do not employ any people locally, and indeed, they have no local presence whatsoever, meaning they do not make any contribution to our economy and their services are denying those who make contributions of income.”

Aina further stated that it was the view held by most telcos within the industry, but noted that “at MTN, we are looking to find win-win solutions for all stakeholders.” He however, dismissed the allegation that some telecoms operators had continued to dispute a view that they were making enough money from their higher paying data services to offset the loss of voice and messaging revenues.

On the other hand, NCC’s Director of Public Affairs, NCC, Mr. Tony Ojobo, however said the commission does not have any evidence of the proposed measure as they not regulate the Internet.

Further debunking the claim, the Managing Director, TechTrends Nigeria, Mr. Kenneth Omeruo, said he is not aware of the development though he admitted that globally, operators and network equipment makers don’t really embrace Skype.

See Also: NCC Bans Registration Of SIM Cards In Kiosks, Under Umbrellas

Mr. Omeruo said they liken Skype to an individual who takes undue advantage of other people’s generosity without giving anything in return. Globally, there is this apprehension among telecoms operators that Skype only steals their customers, while they invest billions of dollars to build, expand and upgrade networks.

Topics: >