Telcos cry out, say activities of OTT eating deep into our revenue

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Gbenga Adebayo, ALTON, OTT, Telecom
Engr. Gbenga Adebayo

 

By Martin Ekpeke

Telecommunication companies in Nigeria under the auspices of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), have said Over The Top (OTT) Services are impacting negatively on their operations, especially as it concerns revenue generation.

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ALTON made this position known in a statement titled Over -The -Top (OTT) and the Impact on Telecom Operations In Nigeria, which was issued by its Chairman, Engr. Gbenga Adebayo in Lagos.

The umbrella body of all licenced telecom operators in Nigeria noted that though it is in support of innovation and continued growth of the industry, measures must be put in place to avoid distortion in the digital space and unimpeded development of telecommunications infrastructure in the country.

It said the OTT render services such as WhatsApp, WeChat, Skype, Facebook, Viber and Imo utilizing traditional Mobile Network Operator (MNO) infrastructure to drive huge advertising revenues, thereby leaving the MNOs with dwindling revenue.

“Telecom Operators (Telcos) incur the costs to invest a lot on network infrastructure in order to provide basic and innovative services to customers, yet Over The Top (OTT) players make the money,” ALTON said.

It quoted Ovum, an independent analyst and consultancy that the growing adoption of OTT services by customers instead of traditional telecoms services will occasion global revenue loss of $386bn over a period of six years (2012 – 2018) for the traditional telecom operators, thus endangering network development.

The increasing usage of OTT services by customers is adversely impacting on traditional telecom platforms in several ways, as a 2016 data shows the voice minutes have been declining due to the impact of OTT.

Telcos are loosing money to OTT players who do not invest in infrastructure, but offer voice, video and messaging services free of charge to their users. They do not also pay taxes and not answerable to any regulation.

In fact, the OTT operators are not covered by obligations such as Annual Operating Levies, Emergency Service Provisioning, Do not disturb (DND) and other consumer-protection measures, subscriber registration/identification, lawful interception and the mandatory consumer codes.

This, ALTON says is unacceptable, recommending same service, same licensing regime to avoid distortion in the digital landscape, where the telcos have paid over N300bn to the coffers of the Government in taxes and levies annually and have created over 30,000 direct job opportunities and over 500,000 indirect job opportunities.

Going forward, ALTON said it supports models intended to engender revenue-share arrangements on advertisement-based OTT content, disclosing that the co-operative model is being developed by operators and may necessitate special data bundles.

“We support innovative solutions by operators to minimize impact of disruptive platforms in the best interests of consumers and of industry sustainability. Security issues need to be addressed: because of Lawful Interception (LI) reasons – OTT players will not open up their services for LI, and that poses a huge security risk. There is needs to consider regulation regarding LI compliance for OTT services.Sustainability Issues also need attention,” it added.

It also stated that operators should reserve the right to charge for OTT calls based on criteria available to the operators. Such criteria are OTT calls terminating to offshore IP addresses; OTT calls based on call count or duration per call; possibly apply limits to call duration or call count for basic unregulated OTT calling and OTT calls based on time of day.

It also recommends that OTT players should enter into an agreement with Telcos for revenue share or payment of a kind of interconnect fee to Telcos.

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