By Olabisi Olaleye
With the increasing adoption of over the top (OTT) applications by telecommunications subscribers, traditional telecommunication operators would experience a global revenue loss of $386 billion over a period of six years (2012 to 2018), thus endangering network development.
This was the submission of Ovum, the independent analyst and consultancy firm.
Increasing usage of OTT services by customers is adversely impacting on traditional telecommunications platforms.
According to “OTT Services in Nigeria and the Displacement Effect,” data shows that voice minutes have been declining due to OTT.
Cumulative voice minutes has been declining while VoIP and OTT flux have been increasing. And telcos are losing money due to this trend.
“Urgent action is required to save telcos from further loss due to activities of OTT players who do not invest in infrastructure,” Ovum said.
The Association of Licensed Telecommunication Operators of Nigeria (ALTON), the body of all licensed telecommunications operators and infrastructure providers in the country, also agreed that the trend is negatively impacting on incoming international traffic as well as SMS at huge cost to the telcos.
ALTON noted that OTT players hold lots of customers’ personal data they can use for any desired purpose without risk of being sanctioned by government while telcos are not permitted to use or disclose subscriber information to a third party.
ALTON chairman, Mr. Gbenga Adebayo, explained that telecommunication operators incur costs, while OTT players make the money.
“Telecom operators (Telcos) invest a lot on network infrastructure in order to provide basic and innovative services to customers. Core voice and SMS revenues are decreasing continuously due to the impact of OTT players who offer voice, video and messaging services free of charge to their users. Telecommunication operators will continue to invest a lot to make the networks support the data tsunami, with the required quality of service and numerous innovative services,” Adebayo said.
He stressed that telcos still strive to maintain their infrastructure and customers with huge investments, while the OTTs offer content and applications, using the telcos’ bandwidth, “collecting revenues but paying nothing to the telcos and to the government”.
OTT service providers utilise traditional mobile network operator (MNO) infrastructure to offer social networks, voice and instant messaging services to retain user’s loyalty with a view to create large on-line communities and eventually attract huge advertisement revenues.
Such OTT services in Nigeria are voice and messaging service applications, including WhatsApp, WeChat, Snapchat, Instagram, Skype, Facebook, Viber and Imo.
The MNOs have neither rights nor control over OTT services, as customers have the discretion to use the Internet as desired.
Adebayo further disclosed that though OTT operators offer similar services as the operators in terms of voice, SMS and content, they are neither subject to licensing under the Nigerian Communications Act nor have any contractual obligation with telecommunication operators in terms of interconnection.
“Telcos have paid over N300 billion to the coffers of government in taxes and levies annually and are a strong presence in the country, attracted over $38 billion FDI in the past 16 years. The industry is a catalyst for telecoms infrastructural development in the country, and also a major employer of labour, having created over 30,000 direct job opportunities and over 500,000 indirect job opportunities,” he said.
The ALTON chairman stressed that OTT players have no traceable address in the country, and make little or no contribution to the nation’s direct economy