Nigerian regulators have kicked off a debate over whether to regulate so-called over-the-top (OTT) services in the country, it comes a month after South Africa’s regulators made the same move.
WhatsApp, Facebook, Twitter and Skype, all immensely popular in Africa’s most populous nation, are all considered OTT services which telecoms carriers claim are posing a danger to their core business. The Nigerian Communications Commission (NCC) describes OTTs as
‘services carried over the networks, delivering value to customers, but without any carrier service provider being involved in planning, selling, provisioning, or servicing them’.
The NCC says this means traditional telecoms firms cannot directly earn revenue from OTTs.
The rise of OTT services are explained by a few statistics. In Nigeria, almost 100 million people in the country use the internet and the country’s smartphone penetration, projected to reach 95 million by 2019, currently ranks only behind South Africa on the continent. Facebook, in particular, is hugely popular as it records more monthly users in Nigeria than anywhere else in Africa.
Regulating OTT services is not a new issue. Regulators raised the issue in India last year and more recently, regulating OTTs were also brought to the fore in South Africa.
While the telecoms firms’ inability to earn revenue from OTTs is one thing, claims that they lose revenue as a result of the popular use of mobile messaging and internet calls replacing traditional calls and SMS is quite another. In this regard, the report describes OTTs as
‘a disruptive technology that is rapidly gaining ground against traditional telephone network technologies.’
MTN, the country’s biggest network with regard to subscription base, saw its average revenue per user drop for most last year.
In addition, the report claims that OTT services now overwhelm their telecoms’ networks and with diminishing revenues, they have little incentive to invest and improve broadband capability. Even though networks earn revenue from data charges through which users access OTTs, the NCC report raises the need to evaluate the possibility of OTTs paying for the use of network infrastructure. The NCC’s report also considers the security risks that OTTs portend. Given the lack of oversight, the regulator says there is a heightened risk of problems like identity theft and intercepting communications.