Regulation, innovation and looking beyond the OTT threats

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Amidst loss of voice revenue by the traditional network operators, the call for regulation of Over the Top (OTT) service providers keep reverberating. However, recent realities in the industry tilt towards the need for telcos to embrace the fringe players as necessary evils. Sam Akindele reports

Over the years, telecommunications operators in the country have repeatedly echoed the need for the industry regulator, Nigerian Communications Commission (NCC), to put OTT service providers such as Facebook, Whatsapp, Wechat, Twitter, etc. under control. Their grouse has been that the unlicensed players that ride on the licensed networks to provide services are eating deep into their voice revenue. The claim may not be out of place as Ovum, a UK analyst firm, had recently  confirmed that the growing adoption of OTT services by customers instead of traditional telecoms services led to revenue loss of $386 billion for telecom operators globally in the last six years.

The calls have, however, been rebuffed by the NCC, which insisted that regulating the OTTs would amount to stifling innovation. The regulator is also pointing at the positive side of the services with regards to increase in internet subscriptions, leading to more revenue from data.

Interestingly, a recent meeting of the telecom executives with the regulator opened another chapter in the OTT debate, as participants emphasised the need for the telcos to look beyond the threats and embrace the opportunities. At the 5th Telecom Executives and Regulator Forum (TERF) organised by the Association of Telecommunications Companies of Nigeria (ATCON), the operators agreed that it would be difficult to regulate the OTTs.

Tough regulating OTTs

Specifically, the Head of Media and Entertainment at MTN Nigeria, Funso Finnih noted that the OTTs operate as global service providers; hence it would be hard to regulate them in Nigeria. He said what the telcos need to do is to start working out partnership and collaboration rather than calling for regulation. He added that Nigeria as a country and the telecom stakeholders must begin to encourage innovations that would facilitate emergence of local companies that can play as OTTs.

Also speaking, the Chief Executive Officer of Medallion Communications, Mr Ikechukwu Nnamani, noted that the impact of the OTTs has been positive on both citizens and operators. “The telcos are generating more revenue from data as a result of the embrace of OTTs by Nigerians. We have to find a way to embrace it rather than fighting it,” he said. Nnamani pointed that in few countries where the OTTs are being regulated; it is being done mostly to protect government or silent the people.

The Chief Technical Officer of Spectranet Limited, Arun Panda, also corroborated other speakers, noting that rather than avoiding OTTs, the telcos should adopt it. He however suggested that the OTT operators should be made to contribute to the upkeep of the networks they are riding on.

Telcos need new business model

Before now, NCC had advised telecom operators to consider changing their business model to cushion the effects of revenue losses being caused by the top OTTs. According to the regulator, a new business model that would involve partnership with OTT players became necessary as it has no plan to regulate or block the fringe players as being clamoured for by the mobile network operators.

With current realities, the telcos may not have other choice than to look beyond the threats and embrace the opportunities that partnerships with the OTTs may have to offer. It is seemingly a tough call, but it appears to be the only way out for them now.


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