Angst as OTTs bite N370bn off Telcos revenue

Over-the-top (OTT) services are now comfortably eating lunch of the telecommunications industry by de-layering that space and at last count have bitten off about N370 billion from the revenue of telecommunications operators in the country.

YouTube, Facebook, Twitter, WhatsApp, Blackberry Messenger and many others are the so-called over-the-top services.

They carry services over the networks, delivering value to customers, but without any carrier service provider being involved in planning, selling, provisioning, or servicing them must be checked.

According to a recent investigation by the Guardian, the activities of OTTs led to revenue losses put at N370 billion in 2019 as MTN, Globacom, Airtel, 9Mobile earned about ₦2.78tr from airtime sales and others.

The figure compared to N3.15tr in the corresponding period of 2018.

Also Average Revenue Per User (ArPU) fell by 20 per cent from $4.87 (N1,490) to $3.85 (N1,182) going by the official exchange rate of N305 to N306 per dollar in the period under review.

ArPU is used primarily by consumer communications, digital media and networking companies and is defined as the total revenue divided by the number of subscribers.

Association of Telecommunications Operators of Nigeria (ALTON), the umbrella body of telecom operators in the country, has consistently insisted that it is not right that a company providing traditional telecommunications services has to meet certain regulatory requirements, like those concerning data protection, while a company providing comparable services over the web does not.

Gbenga Adebayo, chairman, ALTON, recently said that “We are beginning to see the need for regulators to look at regulating technology instead of services.

“For example, the likes of YouTube, Facebook, Twitter, WhatsApp, Blackberry Messenger and many others are called over-the-top services that are not part of the core services for which operators are licensed.

“These over-the-top services have social, economic and security implications. If they are not licensed, it means they are not regulated, and in that case, there is no limit to the scope of what they can do. There is also no control over services and content they may provide,” he said.

But Nigerian Communications Commission (NCC) said that it has no plans to regulate OTT services.

Professor Garba Danbatta, executive vice chairman, NCC, last year, while acknowledging the impact of disruptive technology in the sector and the challenges it poses to telcos in terms of competition for market share, encouraged network providers in Nigeria to innovate.

Human rights activists, however, said that though regulation can be necessary to protect users’ rights – like it is to ensure data protection – some regulatory proposals risk our right to freedom of expression and can also thwart economic, social, and cultural rights.

Nelson Ceasar Obidile urged that regulator to be mindful of right-harming policy if it decides to regulate OTT.