With the economic crisis in the
country hitting businesses hard ,
telecommunication firms are opting
for drastic measures to boost revenue,
OZIOMA UBABUKOH writes
Telecoms companies in the country
are hoping to address concerns over
revenue loss from international calls
and hit a revenue target of N 20 tn by
blocking subscribers from accessing
Skype and other Over - the - Top
services , The PUNCH learnt on Sunday .
It was reliably gathered that
subscribers might also be prevented
from performing certain functions like
voice and video calls on WhatsApp
and Facebook, among other OTT
services .
Skype is a proprietary Voice- over
Internet Protocol software for calling
other people on their computers or
mobile phones .
Phone calls using the Skype software
can be placed to recipients on the
traditional telephone networks ; and
calls to other users within the Skype
service are free - of- charge , while calls
to landline phones though reasonably
priced, are charged via a debit- based
user account system .
“ It is an aggressive approach to stop
further revenue loss to OTT players on
international calls, having already lost
about N 100 tn between 2012 and
2017, ” a manager at one of the major
telecos in the country said .
Speaking on the condition of
anonymity , the manager said , “ If we
fail to be pro- active by taking cogent
steps now , then there are indications
that we may lose between N 20 tn and
N30 tn , or so , by the end of 2018 . ”
The source added that the increasing
rise of the OTT players, who provide
voice and Short Message Services, or
apps such as WhatsApp, Skype,
Facebook, BlackBerry Messenger and
Viber, was eating deep into the voice
revenue of telecommunications
companies in the country by more
than 50 per cent.
A United Kingdom- based research and
analytics company , Ovum , stated in a
report recently that $ 386 bn loss would
accrue over a period of six years –
between 2012 and 2018 – from
Nigerian customers using the OTT
voice applications.
“ Generally , the main fear of the
telecoms operators here will be that
customers will increasingly use Skype
as a substitute for conventional
international calls,” the Principal
Analyst at Informa Telecoms and
Media, Matthew Reed , said .
Telecoms operators in the country said
that international calls made up a
critical part of their revenue because
of Nigeria ’s large expatriate and
Diaspora population .
The apprehension over shift from
voice call, according to them , is
worsened by the steep decline in voice
revenue.
The operators stated that at the start ,
they were looking to offset the fallout
of intense competition by closing gaps
that were spurring revenue leakage in
the business .
They blamed the Nigerian
Communications Commission for not
properly regulating the sector in order
to protect and keep them in business .
But reacting to the development , the
Director , Public Affairs , NCC , Mr. Tony
Ojobo, said , “ We don ’t have any
evidence of that. We do not regulate
the Internet . ”
The Managing Director , TechTrends
Nigeria, Mr. Kenneth Omeruo, said , “ I
am not aware of this development but
globally, operators and network
equipment makers don ’t really
embrace Skype.
“ They liken Skype to an individual
who takes undue advantage of other
people’s generosity without giving
anything in return . Globally , there is
this apprehension among telecoms
operators that Skype only steals their
customers, while they invest billions of
dollars to build , expand and upgrade
networks . ”
Major operators in the country ’s
$ 38 bn telecoms market such as MTN ,
Globacom, Airtel and Etisalat said if
the NCC failed to take decisive actions,
they would keep struggling to counter
a trend in which the prices of basic
voice and data services were
declining.
For instance , MTN Nigeria said that
the OTT content services had a
“ cannibalising effect ” on network
operators’ voice and data revenue,
because they provide “ free ” services ,
which duplicate those already
provided by network operators such as
voice calls and the SMS .
According to the firm , a ready
example is WhatsApp , which provides
free instant messaging services as an
alternative to text messaging services
provided by mobile network operators .
“ It (WhatsApp) has also launched a
free voice service , ” the Public
Relations and Protocol Manager , MTN
Nigeria, Mr. Funso Aina , said , adding ,
“ The point to note in this argument is
that the OTTs allow users to send
unlimited texts, images , video and
audio messages free of charge, using
their current data plans . ”
According to him, the problem is that
these services are provided using
network infrastructure of the
operators, but without commensurate
compensation to operators .
Aina added, “ At the same time, they
are denying operators of revenue to
grow their networks , thereby
impacting on service delivery and
long - term sustainability .
“ For instance, to date , MTN has
invested over $ 15 bn in building its
network in Nigeria . You can now
imagine an OTT leveraging the
network to deliver its content without
investing a kobo locally . The impact
on revenue is huge .
“ Furthermore , because these entities
are not licensed, and because they
have not built any infrastructure
locally , they do not have the same costs
as the licensed operators.
“ They do not pay taxes, they do not
employ any people locally , and indeed,
they have no local presence
whatsoever , meaning they do not make
any contribution to our economy and
their services are denying those who
make contributions of income. ”
The MTN public relations manager
stated that it was the view held by
most within the industry , but noted
that “ at MTN , we are looking to find
win - win solutions for all
stakeholders. ”
Aina, however, dismissed the
allegation that some telecoms
operators had continued to dispute a
view that they were making enough
money from their higher paying data
services to offset the loss of voice and
messaging revenues.
He explained , “ Every service is
provided at a cost , and we cannot
subsidise one service through revenue
from another; so , the argument as to
whether loss of revenue from one is
being offset by another is really not a
fruitful argument .
“ The important thing is that services
must be produced efficiently and all
stakeholders, including our customers,
must get fair value for their
investments. ”
Checks by The PUNCH showed that in
the United Arab Emirate , Etisalat and
Du had recently lifted a ban on Skype
services . Both telecoms companies had
announced that their subscribers could
now download the application online
and make Skype- to - landline or mobile
calls, which were not previously
permitted.
Many telecoms operators worldwide ,
including some companies in the
United States , the United Kingdom,
France and Spain, prohibit their
mobile phone customers from
downloading Skype’ s software , or
outlaw the use of voice over the
Internet phone services in their
standard sales contracts .
Other carriers have imposed fees to
undermine Skype’ s attraction .
Moreover , barriers to Skype software
and similar Internet calling services
are coming under increasing scrutiny
as the Internet goes mobile.
With the economic crisis in the
country hitting businesses hard ,
telecommunication firms are opting
for drastic measures to boost revenue,
OZIOMA UBABUKOH writes
Telecoms companies in the country
are hoping to address concerns over
revenue loss from international calls
and hit a revenue target of N 20 tn by
blocking subscribers from accessing
Skype and other Over - the - Top
services , The PUNCH learnt on Sunday .
It was reliably gathered that
subscribers might also be prevented
from performing certain functions like
voice and video calls on WhatsApp
and Facebook, among other OTT
services .
Skype is a proprietary Voice- over
Internet Protocol software for calling
other people on their computers or
mobile phones .
Phone calls using the Skype software
can be placed to recipients on the
traditional telephone networks ; and
calls to other users within the Skype
service are free - of- charge , while calls
to landline phones though reasonably
priced, are charged via a debit- based
user account system .
“ It is an aggressive approach to stop
further revenue loss to OTT players on
international calls, having already lost
about N 100 tn between 2012 and
2017, ” a manager at one of the major
telecos in the country said .
Speaking on the condition of
anonymity , the manager said , “ If we
fail to be pro- active by taking cogent
steps now , then there are indications
that we may lose between N 20 tn and
N30 tn , or so , by the end of 2018 . ”
The source added that the increasing
rise of the OTT players, who provide
voice and Short Message Services, or
apps such as WhatsApp, Skype,
Facebook, BlackBerry Messenger and
Viber, was eating deep into the voice
revenue of telecommunications
companies in the country by more
than 50 per cent.
A United Kingdom- based research and
analytics company , Ovum , stated in a
report recently that $ 386 bn loss would
accrue over a period of six years –
between 2012 and 2018 – from
Nigerian customers using the OTT
voice applications.
“ Generally , the main fear of the
telecoms operators here will be that
customers will increasingly use Skype
as a substitute for conventional
international calls,” the Principal
Analyst at Informa Telecoms and
Media, Matthew Reed , said .
Telecoms operators in the country said
that international calls made up a
critical part of their revenue because
of Nigeria ’s large expatriate and
Diaspora population .
The apprehension over shift from
voice call, according to them , is
worsened by the steep decline in voice
revenue.
The operators stated that at the start ,
they were looking to offset the fallout
of intense competition by closing gaps
that were spurring revenue leakage in
the business .
They blamed the Nigerian
Communications Commission for not
properly regulating the sector in order
to protect and keep them in business .
But reacting to the development , the
Director , Public Affairs , NCC , Mr. Tony
Ojobo, said , “ We don ’t have any
evidence of that. We do not regulate
the Internet . ”
The Managing Director , TechTrends
Nigeria, Mr. Kenneth Omeruo, said , “ I
am not aware of this development but
globally, operators and network
equipment makers don ’t really
embrace Skype.
“ They liken Skype to an individual
who takes undue advantage of other
people’s generosity without giving
anything in return . Globally , there is
this apprehension among telecoms
operators that Skype only steals their
customers, while they invest billions of
dollars to build , expand and upgrade
networks . ”
Major operators in the country ’s
$ 38 bn telecoms market such as MTN ,
Globacom, Airtel and Etisalat said if
the NCC failed to take decisive actions,
they would keep struggling to counter
a trend in which the prices of basic
voice and data services were
declining.
For instance , MTN Nigeria said that
the OTT content services had a
“ cannibalising effect ” on network
operators’ voice and data revenue,
because they provide “ free ” services ,
which duplicate those already
provided by network operators such as
voice calls and the SMS .
According to the firm , a ready
example is WhatsApp , which provides
free instant messaging services as an
alternative to text messaging services
provided by mobile network operators .
“ It (WhatsApp) has also launched a
free voice service , ” the Public
Relations and Protocol Manager , MTN
Nigeria, Mr. Funso Aina , said , adding ,
“ The point to note in this argument is
that the OTTs allow users to send
unlimited texts, images , video and
audio messages free of charge, using
their current data plans . ”
According to him, the problem is that
these services are provided using
network infrastructure of the
operators, but without commensurate
compensation to operators .
Aina added, “ At the same time, they
are denying operators of revenue to
grow their networks , thereby
impacting on service delivery and
long - term sustainability .
“ For instance, to date , MTN has
invested over $ 15 bn in building its
network in Nigeria . You can now
imagine an OTT leveraging the
network to deliver its content without
investing a kobo locally . The impact
on revenue is huge .
“ Furthermore , because these entities
are not licensed, and because they
have not built any infrastructure
locally , they do not have the same costs
as the licensed operators.
“ They do not pay taxes, they do not
employ any people locally , and indeed,
they have no local presence
whatsoever , meaning they do not make
any contribution to our economy and
their services are denying those who
make contributions of income. ”
The MTN public relations manager
stated that it was the view held by
most within the industry , but noted
that “ at MTN , we are looking to find
win - win solutions for all
stakeholders. ”
Aina, however, dismissed the
allegation that some telecoms
operators had continued to dispute a
view that they were making enough
money from their higher paying data
services to offset the loss of voice and
messaging revenues.
He explained , “ Every service is
provided at a cost , and we cannot
subsidise one service through revenue
from another; so , the argument as to
whether loss of revenue from one is
being offset by another is really not a
fruitful argument .
“ The important thing is that services
must be produced efficiently and all
stakeholders, including our customers,
must get fair value for their
investments. ”
Checks by The PUNCH showed that in
the United Arab Emirate , Etisalat and
Du had recently lifted a ban on Skype
services . Both telecoms companies had
announced that their subscribers could
now download the application online
and make Skype- to - landline or mobile
calls, which were not previously
permitted.
Many telecoms operators worldwide ,
including some companies in the
United States , the United Kingdom,
France and Spain, prohibit their
mobile phone customers from
downloading Skype’ s software , or
outlaw the use of voice over the
Internet phone services in their
standard sales contracts .
Other carriers have imposed fees to
undermine Skype’ s attraction .
Moreover , barriers to Skype software
and similar Internet calling services
are coming under increasing scrutiny
as the Internet goes mobile.
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