Backing this claim of loss in revenue to OTTs is an independent study by Ovum, a UK analyst firm, which forecast that the growing adoption of OTT services by customers instead of traditional telecoms services will cause global revenue loss of $386 billion over a period of six years (2012 – 2018) for the traditional telecom operators, thus endangering network development.

The Chairman Association of Licensed Telecommunications Operators of Nigeria (ALTON) Engr. Gbenga Adebayo, challenged the NCC on why it should remain technologically neutral over the issue of OTTs. According to Adebayo, “the idea of technology neutrality is what allows the OTTs to operate in Nigeria without any license, at the expense of the licensed operators.

“They are eroding our revenue. The licenses we have enable us to provide voice, data and text message services and these are the avenues through, which we make money,” he said. “However, today, people are no longer sending texts because of the OTTs. Our voice and text message revenues have been affected because subscribers now prefer to send messages over Whatsapp or Facebook rather than text messages; video calls are also gradually replacing the regular voice calls. If we must maintain the $70 billion investments in the telecom sector, the government must balance authorisation between our services and these disruptive technologies. We are losing money. People that have no presence and no license in the country are the ones making money, the regulator must be concerned about this.”

 

According to the Commission’s Director of Public Affairs, Mr Tony Ojobo, the regulator’s objectives should be to catalyze additional opportunities offered by OTT services to the benefit of the consumer and to support competition while avoiding the OTT-related risks in the areas of security and data protection. Ojobo said that while the Commission acknowledges the fears of traditional telecom service providers that traditional telephony and SMS revenues are under threat from newer, IP based alternatives such as WhatsApp, Skype, Viber, among others, they should also in turn accept the challenge to innovate and explore more efficient business models that would enable them compete favourably with OTT service providers.

According to NCC’s Director of Policy, Competition and Economic Analysis, Mrs Josephine Amuwa, Nigerian telcos have no reason to complain over OTTs because they are also benefitting from the existence of the various platforms. According to her, without data, subscribers cannot use any of the service and that means they also pay the licensed operators to use the OTTS. “When you talk about OTTs, the only way the consumers enjoy OTT services is through data subscription, and who is providing the data? The operators. From our own study in-house, we have seen tremendous growth in data consumption as a result of the increase usage of these OTTS” she said.

With the proliferation of smartphones and the growing penchant for social networking, the OTT challenge is not expected to fizzle out; however, this also means increase in data consumption by the subscribers. Most importantly, analysts have recommended partnerships between telcos and the OTTs to leverage on the growing trend of data consumption.

 

Nneka Nwagu
About Nneka Nwagu:

Nwagu Nneka Uloaku is a multipotentialite lawyer by day, a thinker and writer in between and a woman of many mastered parts. She calls herself a 21St century lawyer, as she hopes and is working to meet the 21St century legal needs of the world. You can find her unconventional articles on her medium account medium.com/@nwagunneka

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