Recession | Telcos to Block WhatsApp Calls, Skype over Haemorrhaging Revenue

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.
Punch 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
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


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