With the deregulation of the telecoms sector about two decades ago came massive investment by telcos on infrastructure. But the rise of platforms that have neither erected a base station, pay taxes to government nor licensed by the government to provide services challenges the bottomline of telcos, writes LUCAS AJANAKU.
Gbenga Adebayo, an engineer, is passionate about driving his point home. Leading telecoms carriers in the country as Chairman, Association of Licensed Telecoms Companies of Nigeria (ALTON), he never fails to push for good health of the industry. Thus, when he spoke at the last Vanguard e-economy forum in Lagos, his position was about the dynamism of the industry and the need for the Nigerian Communications Commission (NCC) to sail with the wind and yet control it.
His focus was, among others, the need to regulate the activities of Over-The-Top (OTT) players.
ALTON members include MTN, Globacom, Airtel and 9mobile. Adebayo, in an interview with The Nation, had lamented the high mortality rate of telos. He said the number of operators had dipped by half over the past years because of issues that are not entirely their making.
What is OTT?
Online knowledge bank, Wikipedia, explains: “OTT is where a telecoms service provider delivers one or more services across an IP (internet protocol) network. The IP networks is predominantly the public internet, although sometimes telco-run cloud services delivered via a corporation’s existing IP-VPN (virtual private network) from another provider, as opposed to the carrier’s own access network. It embraces a variety of telco services including communications (e.g. voice and messaging), content (e.g. TV and music) and cloud-based (e.g. compute and storage) offerings.”
It said stimulated by the availability of high performance fixed and mobile broadband networks as well as the rapid adoption of smartphones and tablets, telco-OTT is viewed by a selection of industry analysts and media commentators as the mechanism that mobile network operators need to employ in order to compete with the vast and growing range of OTT services provided by non-telco companies.
Telco-OTT is a response to the fact that users will have multiple devices (smartphones, laptops or other connected devices such as TVs, games consoles) which almost inevitably will have various different access providers (especially with the growth of public-access Wi-Fi).
According to Wikipedia, to deliver consistent telco-branded services, at some points at least, they will need to be delivered over third-party access.
Telcos’ position
Adebayo said the time had come for the regulator to dump its technology neutral era of licensing, which meant it licences for services and not for technology.
He said the reality is that technology is driving the market. It is no longer services. There is a need for the regulator to begin to look at issue of regulating technology and not services, he sstressed.
For example, OTTs, such as YouTube, Facebook, and WhatsApp weren’t part of the core services for which telcos were licensed.
“Those kind of services have social implication, economic implication, security implication and if they are not licensed, that means they are not regulated and if they are not regulated, there is no limit or scope to what they can do. And no control over ther services and content they can provide.
“We are, therefore, saying there is a need for the regulator to begin to look away from the neutrality of technology and technology certification and regulattion than just licensing for service not only because of the social security implication but also because of the economic implication for the operators.
“Today, more people send WhatsApp messages, they send messages over the social media platforms than they do on the conventional SMS platform.
“Operators have been licensed to provide voice, SMS and data services for which they are licensed and being charged annual operating levy. OTT don’t have such and there is even loss of revenue to the regulator of the country too because they are not paying for rendering those services.
“That is why we are saying that our regulator must begin to look away from technology neutrality.”
Industry’s health
He said studies and report had shown that in a market as such Nigeria’s, bigger operators survive better than smaller opeartors.
“When I took up this role as the Chairman of ALTON, there were 35 companies in our group. Today, we are 16, meaning that we have lost half of our members due to problems not of their own making,” he had lamented last year.
He said the reason for the dip in membership of the group might be forces of competition; market forces; the challenges of investing; it might be access to fund; it might be anti-competitve prices on the part of some of the big players.
“We just think that studies such as the Study of the Level of Competiton in the Telecoms Industry in Nigeria organised by the NCC should dwell into those areas so that we begin to see the issues leading to the death of telecoms campanies.
“The challenge we have now with one of the big operator attests to the fact that the industry may not be as healthy as we are thinking and therefore studies such as this are very important first as health check, to see where we are and to see where and how we can further adjust and tune things for a more competitive industry and for a more robust market and for the greater interest of the consumers,” Adebayo said.
He said while base cost remains, some layers of services are offered to customers at no cost by platforms that do not pay annual operating licence (AOL) fees, have no subscriber data and not subject to lawful interception which telcos are liable to.
NCC reacts
Head, Technical Standards and Network Integrity, Bako Wakil, who represented the CEO of NCC, Prof Umar Dambatta, said the regulator is dynamic and had, through the enforcement of co-location, reduced capital expenditure (capex). He also said a framework for active infrastructure sharing was in the works while it is also working on local roaming.
Way forward
ALTON urged the NCC to reduce AOL for carriers to shore up revenue loss to OTT.
Adebayo pushed for cost-based end user call tariff in states across the country. According to him, it is more difficult to do business in some states than the other, stressing that those states with hrash operating environment should pay more.
He also urged the NCC to mandate the firms to come clean on full disclosure about what the make in the country in terms of revenue.