NCC weighs regulation options on OTT, as stakeholders demand action
… Global operators lose $386 billion to WhatsApp, Facebook, others
The Nigerian Communications Commission (NCC), is seriously under pressure on how and when to regulate ‘’Over-The-Top” (OTT) players, which have been described as a serious threat to traditional telecommunications operators.Though, it has repeatedly claimed that it will not regulate technology, but stakeholders have called on NCC to as a matter of urgency look for ways to curb the growing influence of OTT players including Facebook, WhatsApp, Google, Wechat, Telegram, Viber, Skype, Imo, and others.
To compound the challenge, Ovum, an independent analyst and consultancy firm, revealed that global operators, Nigeria inclusive lost $386 billion over a period of six years (2012 – 2018), to the incursions made by the OTT players on operators.Speaking at the Vanguard Economy Forum on Telecoms the Executive Vice Chairman, NCC, Prof. Umar Danbatta, urged operators to restructure their business models, to boost their revenue, which is falling as a result of various challenges, including those of OTTs.
Danbatta, spoke on the theme: “Unlocking the Revenue and Growth Opportunities in the Telecoms Sector in a Changing Business Model and Digital Technology Environment: Role of Regulator, Operators and OTT Service Providers.” Represented by the Head, Technical Standards and Network Integrity at NCC, Bako Wakil, he alluded to current dynamics in the telecommunications industry in terms of infrastructure investment and industry growth.
He said there were dynamics in the revenue, technological advancement and the impact of OTT applications in telecommunications space.Speaking at a panel session, Wakil noted that regulations of OTT should not be the concern of the NCC alone; stressing that there was need for collaborative efforts.Wakil said NCC was not considering regulating OTT, but there are measures in place to tackle the lacuna it is creating in the areas of security breaches.
According to him, if the pressure becomes too much, “we may take a cue from some advanced countries on the OTT players. We can explore the China approach, where these players were blocked completely or that of Middle East, where users can only chat, but cannot do anything video.”Wakil noted that the challenge is real, stressing that the business environment is becoming more complex, and the models that were created in the past are no longer sustainable as telecommunications companies are presently seeing the gradual erosion of their average revenues per user (ARPU).
To the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, OTT services in Nigeria have brought displacement effects on operators. He said data showed that voice minutes have been declining due to impact of OTT; while VoIP has been increasing; OTT Data flux has been increasing as shown with the 2016 data, and telcos are losing money to this trend.
The ALTON boss said urgent action is required to save telcos further losses due to activities of OTT players, who do not invest in infrastructure. Adebayo, who said operators incur the costs while OTT players make the money, said service providers invest a lot on network infrastructure in order to provide basic and innovative services to customers.From his perspective, the National Coordinator, Wireless Application Service Providers Association of Nigeria (WASPAN) Chijioke Ezeh, said it will be a big problem for Nigeria to sign away data and digital opportunities, stressing that OTTs are milking the telecoms operators, vendors and the entire economy.
Ezeh, who charged NCC to pursue aggressive partnership with other regulators including the CBN, those in automobiles and others, noted that there was need to develop the telecoms market for indigenous players in the industry. Ezeh lamented that even GTB has become an OTT because they have displaced the micro recharge card sellers on the street, “thereby causing more job losses, while they raked in billions of Naira without any regulation from the telecoms sector.”
To Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON), data is the new currency and must be guarded jealously, stressing that the treat of OTT acquiring the infrastructure of telecoms operators is real, ‘there should be urgent action against their rising profile in the country.”Teniola, who noted that any company making more money in Nigeria should be subjected to tax, companies coming into Nigeria for operation should be made to embrace full disclosusre of their activities in the country.
According to him, because of the behavioural change that is driven by competition, there is need for paradigm change. Teniola said OTT are using IP technology that is not regulated to disrupt the traditional telecoms sector, which has become very dangerous. Furthermore, the NCC boss said that there was the need for the telecommunications industry players to understand the ongoing trend.“It is necessary for industry players like Telcos, vendors and Value Added Service (VAS) licensees to consider taking steps to change their business models in line with current and forecasted industry trends as may be required,” he stressed.
He said that there was the need for industry players to challenge the accepted traditional norm of where a telecommunications business fits in the larger ecosystem. “In order to remain in business and thrive, there is need for telecommunications companies and vendors to think outside the box and create innovative partnership and low cost business models with themselves and other players in the business ecosystem. “This will create a win-win situation for all players and enable them to remain in business and thrive despite the industry’s complexities,” Danbatta said.
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