The Nigerian Communications Commission (NCC) may soon commence a licensing regime through a regulatory framework for the over-the–top (OTT) players on Nigeria’s telecoms market, New Telegraph has exclusively gathered.
Findings already showed that OTT players such as Google, Facebook, WhatAapp, Viber, Blackberry Messenger (BBM) and WeChat, among others, are prime target in the impending regulation. OTT services are services carried over the networks, delivering value to customers, but without any carrier service provider being involved in planning, selling, provisioning or servicing them; thereby implying that traditional telcos cannot directly earn revenue from such services.
The development is as a sequel to a latest report released by the NCC’s Department of Policy, Competition and Economy analysts, which examines the evolution and development of OTT incursion into the telecoms mobile market and their apparent threats to the operation of traditional telephone networks such as MTN, Glo, Airtel, Etisalat and Visafone, among others.
In the report entitled: “An overview of provision of over-the-top (OTT) services,” NCC listed OTT services to include services such as Internet Protocol (IP) telephony, live streaming and other social media applications.
According to the report, Internet telephony uses a broadband Internet connection to transmit conversations as data packets, saying that “in addition to replacing the traditional Plain Old Telephone Service (POTS) system, IP telephony was also competing with mobile phone networks by offering free or lower cost connections via WiFi hotspots.”
Analysts said that OTT was a service based on the Voice over IP communication protocol (VoIP), a disruptive technology that is rapidly gaining ground against traditional telephone network technologies. According to the report, with the increase in uptake of mobile VoIP services provided by apps such as Google, Facebook, Skype, Viber and WhatsApp, among others, telecoms operators “face the risk of eroding revenues and profitability.” It said:
“Many traditional telecom service providers are of the opinion that traditional telephony and SMS revenues are under threat from newer, IP based alternatives like WhatsApp, Skype, Viber, among others. “Similarly, third party web content and social networking companies such as Google and Facebook are increasingly generating huge revenues and driving high levels of data traffic which ride on the broadband networks of traditional telecom operators.
“To further worsen this issue, the traditional operators still have to make significant investments in upgrading their networks to handle the increasing volume of data generated by the same providers of OTT services. “Most traditional telephone network service providers, therefore, argue that unless there is a revenue flow to them from such services, they do not have an incentive to continue to maintain or upgrade the networks.”
According to the report, while, to a large extent, this argument may be true, traditional telephone network providers need to start exploring more innovative and cost effective ways of competing with these OTT service providers.
PriceWaterhouseCooper (PwC), a global consulting firm, has already suggested that “if telecom operators are to develop a successful strategic response to the rise of OTT competitors, they must first take stock of the considerable assets and capabilities they already possess and determine how they can leverage them in order to compete against, or work with, the OTT players.”