Dear telcos, OTT is not your enemy!

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Chukwuemeka Fred Agbata Jnr. (CFA)

It is interesting that telecommunications companies all over the world regard Over-the-Top players/services as the enemy. I have therefore decided to make it my duty to inform them that contrary to what they think, they are simply being disrupted. If the telecom firms want me to make the same statement differently, I would simply say innovation is the enemy.

The PUNCH report, titled ‘Recession: Telcos may block Skype, WhatsApp calls, target N20tn revenue’, caught not just my attention but also that of numerous people. Here is an excerpt from that report by Ozioma Ubabukoh:

“…It is an aggressive approach to stop further revenue loss to OTT players on international calls, having already lost about N100tn between 2012 and 2017,” a manager at one of the major telcos 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 N20tn and N30tn, 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.”

After reading that report and the comments that followed, it was clear that more Nigerians oppose the move, which has already reached an advanced stage. In fact, I can authoritatively state that after a recent high-powered and heated stakeholders meeting, a foremost audit firm has been mandated to dig deeper and come up with data to back up the claims by the telcos. Except Nigerians make their voice as loud as ever, you can bet that OTT services, as we know it, will exist only in bits and pieces.

Interestingly, some world-class companies that regard themselves as disruptors, such as Facebook, Microsoft, and Google, have all voiced their opposition to the regulation of OTT services. I stand with them on this!

Nigeria is actually not the only African country seeking to regulate OTT services. In South Africa, there are reports that OTT service providers do not pay taxes to the government. The Corporate Service Executive, MTN South Africa, Graham de Vries, in a presentation at a parliament meeting earlier this year, made the company’s position on the matter known and subsequently challenged an online petition by All4Women.co.za calling on the South African government to reject calls by telcos to regulate these services. Kenya is also seeking to amend regulations that will affect OTT services in the country.

However, Ghana for now is singing a different tune, as the Ghanaian Communication Unit believes that the government wants new technologies to flourish and so cannot implement policies to control its operations. “New technologies will come. Technology is something that we (government) cannot regulate, and it’s something that we (government) cannot develop policies to restrict people from doing,” says Ghana’s Deputy Minister of Communications, Ato Sarpong.

On the contrary, the Chief Executive Officer, MTN Ghana, Ebenezer Twum Asante, suggested that the regulator (National Communication Authority) and the government should move in to regulate the operations of OTT services in Ghana to enable players within the telecoms industry stay in business.

Let me pause and ask for a moment – Did people not invest heavily into typewriters when Bill Gates came up with the idea of a desktop for every home; or what about the pager business? I heard the story of an entrepreneur who invested millions of naira in the pager business few months before the launch of Global System for Mobile services in the country. The point is that the telcos should have envisaged the disruption that is happening today and prepared for an uncertain future.

According to Research ICT Africa, African players have adopted various strategies to defend their revenues against OTT services. Plans include bundling voice, text and data together in top-up products to make their desired Average Revenue per User. The Executive Director, Research ICT Africa, Alison Gillwald, says a new, public-interested assessment of the zero-rating of certain applications and platforms in the African mobile prepaid environment are overdue.

We should bear in mind openness of the Internet and the freedom it guarantees for millions of Africans. It is critically worth noting that WhatsApp, Skype, Google Hangouts, Facebook Messenger are increasingly used in education throughout Africa. They are making more student engagement and improved learning possible. More Africans, who hitherto had little access to education, are now embracing qualitative education in various forms and at various levels through these free services.

In addition, the Commonwealth Telecommunications Organisation is conducting a study to understand the market dynamics, policy and regulatory issues of OTT services. This is in the context of their impact on traditional business models and of opportunities for innovation and stimulating economic growth.

Let me state that, the telcos will likely win the argument except Nigerians start shouting now. However, it is important to inform the telcos that such victory will not last for too long because as far as I am concerned, voice is dying or rather dead! Another possibility I see is a legal, innovative way to bypass whatever firewall they might put in place. In other words, even if the policy eventually sees the light of day, some ‘lucky’ few may not be affected as such.

I think what our telcos should be doing at this point is more of research and development while ensuring that they look for other innovative ways to create wealth. Have they asked themselves why Verizon is seeking to buy Yahoo? Our telcos here seem to be more interested in quick gains or short-term Return on Investment, entertainment, games. Dear telcos, yes you own the infrastructure but I say to you, disrupt or be disrupted. By the way, who even knows how far Mark Zuckerberg’s Internet drone will go?

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