Telecom companies in Nigeria are looking to find ways to mitigate supposed revenue loss from international calls and hit a revenue target of N20 trillion by blocking Nigerians from accessing Over-The-Top (OTT) services like Skype and WhatsApp, media reports say.
According to a report by in Punch Online, a manager at one of the major telcos in Nigeria said, “It is an aggressive approach to stop further revenue loss to OTT players on international calls, having already lost about N100tn between 2012 and 2017.”
Apparently, the telcos are scared that the rise of services like WhatsApp, Facebook, and Viber, will result in them losing voice call revenue since most of these service offer free voice calls on their platforms.
The Punch Online report also mentions Ovum, a UK-based research and analytic company, as stating in a report that telcos would've lost $386 billion (about N121.56 trillion) to OTT services between 2012 and 2018.
“Generally, the main fear of the telecoms operators here will be that customers will increasingly use Skype as a substitute for conventional international calls,” Matthew Reed, Principal Analyst at Informa Telecoms and Media said, according to the Punch Online report.
If these sentiments are true, we could see telcos lobbying regulators like the Nigeria Communications Commission (NCC) to put up policies that could see OTT services being regulated in the country.
The interesting thing is that, for some reasons, the telcos are forgetting that people actually have to buy data (which is still astronomically high compared to the rest of the world) to even make use of these OTT services.
Reacting to the news reports, Public Affairs Director at the NCC, Tony Ojobo said, “We don’t have any evidence of that. We do not regulate the Internet.”
Nigeria's telecom market is valued at about $38 billion which also makes it hard to see telcos losing as much as $386 billion to OTT services. Besides, these services are present in several other countries and we don't see telcos in those markets moaning about OTT service.
Public Relations and Protocol Manager at MTN, Funso Aina, according to the Punch Online report, seems to think different: “It (WhatsApp) has also launched a free voice service. The point to note in this argument is that the OTTs allow users to send unlimited texts, images, video and audio messages free of charge, using their current data plans.”
Mr Aina believes that these services use the telco's infrastructure and should therefore pay commensurate compensation to them: “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."
While Aina's argument does have some logic behind it, OTT services do not use the telco's infrastructure - unless they would rather not provide their customers with Internet.
Besides, telcos in like Verizon and Sprint in the US (that probably first faced these issues when these OTT services started out) have gotten by just fine without any regulation on OTT services.
If anything, telcos should put their innovation hats on and figure out a way to navigate the situation whilst providing the best possible services to customers (which they don't because Internet and everything else is still crappy).
Still, this will be an ongoing discussion - one the NCC doesn't seem very piqued by - and it will be interesting to see what side of the pond the gavel falls eventually.
Let us know your thoughts in the comments section below.