Telcos Express Worry over adverse Effects of Over the Top Technology

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Emma Okonji

 

Over the Top Technology (OTT), which is an evolving technology across globe, is adversely disrupting activities in the telecoms industry, as it continues to eat deep into the revenue strings of telecoms service providers.

Some of the licensed telecoms operators who spoke to THISDAY on the condition of anonymity, said although they were initially happy with the speed at which new technologies were evolving and disrupting the old practice and ways of doing things, but are very uncomfortable with the OTT technology that rides on the internet to offer free voice and data services to customers. This the telcos said is cutting down on the number of subscribers who hitherto patronise licensed telecoms operators for voice and data services at stipulated service charges.

According to the licensed telecoms operators, the OTT players can afford to offer free voice and data services because they did not invest in telecoms infrastructure, since they deliver services over and above telecoms facilities, while riding on the internet.

They explained that licensed telecoms operators have spent several trillions of naira to build telecoms infrastructure since they were granted operational licenses by the Nigerian Communications Commission (NCC) in 2000, 2003 and 2008 respectively and that they have continued to invest in network expansion in order to provide better service quality as their subscriber number grows.

They however expressed regret that the evolving technology called OTT is fast cutting down on their revenue generation, since majority of subscribers prefer to send massages via WhatsApp, make WhatsApp calls and Skype calls, which are all free of charge, because the OTT service providers are not investing money in telecoms infrastructure.

“We had initially resorted to draw the attention of the NCC, the telecoms industry regulator to apply regulatory measures and control on OTT service providers, but when we realised that it is an emerging global technology that cannot be regulated in Nigeria alone, we decided to think of alternative source of generating revenue through data, in order to remain in business,” the telecoms operators told THISDAY.

MTN Nigeria for instance, long foresaw the changing trend and embarked on a new mission where it consolidated in buying spectrum licences that will enable it offer data services to a variety of customers. After buying the 700MHz bands spectrum frequency from the National Broadcasting Commission (NBC) for N34 billion, which is a broadcast spectrum essentially for the provision of broadband wireless services, MTN went ahead to buy up Visafone to boost its data service offerings, before bidding for the 2.6GHz spectrum auction, where it emerged the only telecoms operator that won six slots out of the 14 available slots that were auctioned at a reserve price of $16 million per slot. Recently MTN Group opened up discussions of a possible buy over of Multichoice operations, but the talk has not been finalised.

Telecoms experts are of the view that MTN is already looking at alternative means of generating money and sustaining the MTN brand, in order to survive the negative disruption already created by the OTT service providers, whose activities cannot be regulated.

The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, while acknowledging the fears of traditional telecoms service providers that traditional telephony and Short Message Service (SMS) revenues are under threat from newer and Internet Protocol (IP) based alternatives, like WhatsApp, Skype, Viber, among others, noted that the commission would encourage network providers in Nigeria to innovate and explore more efficient business models that would enable them compete favourably with OTT service providers.