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Telcos May Block Skype, WhatsApp Calls over Haemorrhaging Revenue

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With the economic crisis in the country hitting businesses hard, telecommunication firms are opting for drastic measures to boost revenue, including moves that may block subscribers from accessing Skype and other Over-the-Top services, according to the Punch.

Telecoms companies in the country are hoping to address concerns over revenue loss from international calls and hit a revenue target of N20 trilion.

Pucnh 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 N100tn 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 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.

A United Kingdom-based research and analytics company, Ovum, stated in a report recently that $386bn 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, Mr. Tony Ojobo, Director, Public Affairs, NCC said, “We don’t have any evidence of that. We do not regulate the Internet.”

Mr. Kenneth Omeruo, Managing Director, TechTrends Nigeria 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 $38bn 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 $15bn 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.

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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Omobola Seeks for Digital Revolution and End to Arbitrary Charges

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Dr. Omobola Johnson, Former, Minister of Communications Technology has urged the Federal Government to put in place robust digital revolution framework to sustain the gains of the telecom revolution for Nigeria to remain relevant in the now emerging digital world.

 

The Former Minister believes that failure to curb lingering cases of multiple-taxation, vandalism of telecom infrastructure by agencies of (mostly States) Government, may lead the country becoming digitally irrelevant.

 

Dr. Johnson who delivered the keynote address and participated in a panel at the maiden edition of Nigerian Telecom Leadership Summit #NTLS, organised by the Nigerian Communications Commission, NCC, decried the draconian and extant laws being used by state governors and other agencies of government to spin revenue from telecom operators.

 

 

She aligned with the industry operators that full implementation of Executive Order in this regard will reverse the trend.

 

According to her, an Executive Order will compel the Nigerian Communications Commission to be more forceful in terms of regulation, adding that any negative impact on the telecom infrastructure will, ultimately impact on the economy.

 

“The Federal Government should give Executive Order to tackle out multiple-taxation in the country’s telecom industry. It is a matter of talking to the Governors,” she noted.

 

Omobola, who spoke on the summit theme: ‘Repositioning the Nigerian Telecom Industry for the Future; Prospects and Challenges’, argued that the idea of engaging the State Governors Forum to step down on multiple-taxation has not worked in the past and may not likely work anytime soon.

 

“For me, the NCC must not be afraid to innovate or experiment. The regulator must take some risks to innovate. They are in a unique position to give action to state Governors not to temper with telecom infrastructure, as it enables other sectors of the Nigerian economy,” she added.

 

Nodding in agreement, the Chairman of the Association of Licenced Telecom Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, said engagement with the Governors has been ongoing for years and it has not worked, emphasizing that the regulator needs to be more strategic to do something different.

 

He said the multiple taxation and arbitrary closure of telecom sites has always affected the quality of service, which will turn impact on other sector.

 

“ATM will not work if you close telecom sites. Security agencies will not be able to track criminals if the sites are closed. The telecom​​ sector service other sector of the Nigerian economy, so any negative impact on telecom infrastructure is a negative impact on the entire nation,” he argued.

 

 

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Nigeria’s mobile phone penetration hits 87 percent

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L-R: Stanislaus Martins, Head, Growth and Partnerships, Jumia Nigeria, Omolola Onasanya, Head, Vendor Operations and Experience, Jumia Nigeria and Olukayode Kolawole, Head, PR and Communications, Jumia Nigeria, at the launch of the 2019 Nigeria mobile report held on Friday in Lagos.
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Statistics released on Friday by Jumia shows that mobile phone penetration in Nigeria grew from 162 million subscribers in 2017 to over 172 million mobile subscribers in 2018, accounting to a penetration rate of 87 percent of the population, representing a 6.4 percent growth increase

 

The report also shows that over 112 million Nigerians had access to the internet in 2018, representing 56% of the population, resulting to an increase of 14.32 percent year-on-year from 2017.

 

The growth according to the report is being fuelled by the availability of lower points phones, which paved way for more Nigerians to own a device.

 

Omolola Onasanya, Head, Vendor Operations and Experience, Jumia Nigeria, speaking at the launch of the 2019 Nigeria Mobile Report, in Lagos, stated that over 112 million Nigerians had access to the internet in 2018, representing 56 percent of the population, which she attributed to the availability of lower price point phones.

 

According to her, “In Nigeria, there were over 172 million mobile subscribers, accounting to a penetration rate of 87 percent of the population.

 

“This figure represented a 6.4 percent growth increase, compared to 162 million subscribers in 2017.

 

“Over 112 million Nigerians had access to the internet in 2018, representing 56 percent of the population.

 

“This accounted for an increase of 14.32 percent year-on-year from 2017. The availability of lower price point phones still remains the major driver of smartphone penetration.

 

At the end of 2018, there were over 36 million smartphone users, representing a penetration of 18.37 percent.”

 

Onasanya noted that the number of active social media users rose from 17 million in 2017 to 24 million at the end of 2018, which represents a 12 percent penetration of the country’s population.

 

Stanislaus Martins, Head, Growth and Partnerships, Jumia Nigeria, giving an overview of the Country’s Economy Growth stated that the mobile telecommunications sub-sector contributed 7.4 percent to the country’s total GDP in 2018, compared to 5.5 percent in 2017, while Services sub-sector of the ICT sector contributed 77 percent out of the 7.4 percent contribution to the country’s GDP in 2018.

 

He noted that Nigeria’s GDP growth witnessed an upward swingfrom 0.8 percent in 2017 to 1.9 percent at the end of 2018, which fell below the projected 2.3 percent, majorly due to variations in prices of crude oil and its output.

 

He attributed the economic growth witnessed in 2018 to non-oil sectors such as Agriculture, Information and Communications Technology, Manufacturing, and Transport Storage.

 

“Nigeria’s GDP growth leapfrogged from 0.8 percent in 2017 to 1.9 percent at the end of 2018.

 

“However, the growth, although significant, was below the projected 2.3 percent, majorly due to variations in prices of crude oil and its output.

 

The economic growth, for the first time, was hinged on non-oil sectors such as Agriculture, Information and Communications Technology, Manufacturing, and Transport Storage.

 

“It is worth mentioning that the non-oil sector grew by 2 percent, the highest growth rate recorded since the economic recession in 2016.

 

“The Information and Communications Technology sector, which subsumed the digital economy, grew from its negative growth of 1 percent in 2017 to become the second fastest growing sector with a growth rate of 9.7 percent in 2018”, he added.

 

Earlier, Olukayode Kolawole, Head, PR and Communications, Jumia Nigeria, said that  about 44 percent of mobile subscribers in Nigeria are using 3G technology and 4 percent are using 4G technology as against over 18 percent 4G penetration in South Africa and 16 percent in Angola.

 

Kolawole revealed that projections have shown that Nigeria’s mobile broadband penetration will rise to 55 percent of the population by 2025, with 70 percent having 3G connectivity and 17 percent having access to 4G networks.

 

He said, “It is predicted that Nigeria will contribute 4% of the estimated 700 million new global mobile subscribers, making it the only country in Africa marked with a significant contribution to increasing mobile penetration in the world.

 

“By this quota, it is expected that 28 million new mobile subscribers will emerge from Nigeria between 2019 and 2025, that is, an average of 7 million new mobile subscribers annually, if the country is to meet its quota.”

 

 

 

 

 

 

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Glo Gains 78% of New Data Subscription in GSM Sector in March – NCC Report

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Nigeria’s second largest telecommunications operator, Globacom, garnered 78 percent of new data subscriptions in the month of March, 2019. The operator gained nearly one million new subscribers in the month.

This was disclosed in the latest statistics released by the Nigerian Communications Commission (NCC) for the month of March 2019. According to the statistics, Globacom gained 950,115 new internet users, taking its total internet subscriptions to 28,436,386 from 27,486,271 recorded in February, 2019.

Two other operators, MTN and Airtel, also featured marginally on the gainers’ list in March. Airtel added 351,657 new internet users, while MTN added 13,552 subscribers. 9mobile, on its part, lost 166,542 users in the month under review.

Overall internet users in Nigeria increased to 115,938,225 in March from 114,725,357 recorded in February, according to the NCC statistics. This indicates an increase of 1,212,868 new subscribers in one month.

Globacom has been on ascendancy in terms of acquisition of new internet subscribers in the last one year ostensibly due to the consistent improvement in the operator’s data services.

The company has the widest 4G LTE coverage in the country, and the technology ensures more reliable and faster internet usage experience. Globacom also has the most attractive data plans in the market, with packages that appeal to both high and low data users.

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