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ALTON Decries Impact of OTT on Telecom Operations

chike onwuegbuchi

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) has decried the impact of over the top service (OTT) on the telecom operations in the country.

Engr. Gbenga Adebayo, Chairman, ALTON, said: “In Nigeria over the top service (OTT) providers utilizes traditional Mobile Network Operator (MNO) infrastructure to offer social networks, voice and instant messaging services to retain users loyalty and drive stickiness, with a view to create large on-line communities and eventually attract huge advertisement revenues.”

 OTT services in Nigeria include Voice and Messaging service applications such as: WhatsApp, WeChat, Skype, Facebook, Viber, Imo, among others.

The Mobile Network Operators (MNO), he said, has neither rights nor control over the OTT services, as its customers have the discretion to use the Internet as desired.

“Increasing usage of OTT services by customers is adversely impacting on traditional telecoms platforms. 

According to Ovum, the independent analyst and consultancy: 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.

Some of the ’displacement effect’ according to Adebayo are ‘declining voice minutes due to impact of OTT while VoIP has been increasing, OTT Data flux has been increasing as shown with the 2016 data, Telcos are losing money due to this trend.’

He said that urgent action is required to save Telcos further loss due to activities of OTT players who do not invest in infrastructure.

“Telecom Operators incur the Costs while OTT players make the money. Telecom operators 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 impact of OTT players who offer voice, video and messaging services free of charge to their users. Telecom 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.

“On the top of their infrastructures and customers, they will strive to keep with huge investments, the OTTs are offering contents & applications, using huge amount of Telcos bandwidth, collecting revenues but paying nothing to the Telco operators and to the government.”

He added that, the increasing adoption of OTT applications by telecom subscribers negatively impact on incoming international traffic as well as SMS at huge cost to the Telcos but revenue to OTT.

“OTT players also hold many customers personal data they can use for any desired purpose without risk of being sanctioned by the government while Telcos are not permitted to use or disclose subscriber information to third party.”

ALTON however recommends in line with international trends, ’same service, same licensing” regime to avoid distortion in the digital landscape.”

ALTON he noted supports models intended to engender revenue-share arrangements on advertisement-based OTT content.

This 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.

“Operators should reserve the right to charge for OTT calls based on criteria available to the operators, such as: 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; OTT calls based on time of day and OTT Video (P2P) is subject to the above.

“OTT video content streaming may not need to be regulated, operators can decide to apply QoS parameters to the specific service, and manage QoS as applicable for their subscribers. Also operators can decide to prioritize or de-prioritize OTT traffic on their networks for economic and quality reasons.

“We recommend that OTT players to enter into agreement with Telcos for revenue share or payment of a kind of interconnect fee to Telcos.”

He expressed ALTON’s committment to the continued growth and development of the Nigerian Telecommunications Industry and respectfully requests that in order to save the legacy telecoms operators, measures must be put in place which will avoid distortion in the digital space in order to ensure unimpeded development of telecommunications infrastructure in the country.