•Rush to regulate OTTs may backfire – Danbatta
•We must curb circulation of harmful contents – Bala

By Prince Osuagwu (Hi-Tech Editor)

WHEN the Director-General of National Film and Video Censors Board (NFVCB) Ms Patricia Bala recently visited the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, the aim was to seek the commission’s collaboration on how  best to regulate the major agents of disruptive technology, known as the Over the Top service providers.

Delivery by drones…could this be regulated in the near future?

Bala’s view was that there must be a way to curb circulation of harmful content over telecommunications platforms. Such perceived harmful contents have over time been attributed to the handiwork of Over the Top, OTT operators who mostly haul their services across to the consumers, over the network of traditional operators, bypassing controls.

On messaging services, Over the top providers are third parties providing instant messaging services as an alternative to  text messaging services provided by a mobile network operator.

An example of this is the WhatsApp messaging platform, which is narrowly focused to replace text messaging on Internet connected smartphones. Founded in 2009, it was acquired by Facebook in 2014 for approximately US$16 billion. Now, there are well over 900 million active users even as it also provides over-the-top voice calling capabilities.

Internet communication

Other services like Skype have also taken away traditional mobile phone operator businesses by using open internet communication to replace and enhance existing operator controlled services.

In broadcasting, over-the-top content (OTT) is the delivery of audio, video, and other media over the Internet without the involvement of a multiple-system operator in the control or distribution of content. The Internet provider may be aware of the contents of the Internet Protocol packets but is not responsible for, nor able to control, the viewing abilities, copyrights, and/or other redistribution of the content.

This model contrasts with the purchasing or rental of video or audio content from an Internet Service Provider (ISP), such as pay television, video on demand or an IPTV video service.

In this case, the OTT delivers content as a third party to an end-user, with the ISP simply transporting IP packets.

However, the global OTT market is highly fragmented, comprising many vendors, both international and domestic. With international players increasing their presence in many regions, domestic vendors are finding it difficult to compete with them in terms of quality, features, safety, and price.

Also, international players are continually launching products and services in developing countries like Nigeria to take advantage of the economic growth.

These are apparently the reasons why Bala, like the traditional telecommunications operators feel there should be a form of regulation to provide for a more controlled and balanced market.

But the NCC Chief Executive, Prof Danbatta has a different opinion. He quickly reminded Bala that regulators, all over the world approach the issue of OTT regulation with a lot of caution, basically because of the positive transformation and steady growth their disruption gives to world technology eco-system.

He said: “The whole essence of this digital transformation that we so passionately talk about is to ensure more participation of citizens in governance. There are many other important things happening, the smart phones, the social networks and mobile applications.

Positive transformation

“These have transformed the society in unprecedented manner that things will never ever be the same again.  We are hoping that these transformations will be positive transformation. It’s our hope again that the destruction associated with these transformations will not completely destroy the legacy, system, process and so on.

“Look at the impact of social media in ensuring free, fair and credible elections. Many people hailed the last election in Nigeria as the most credible ever in the history and the role played by the social media cannot be ignored. When the history of elections in this country is eventually written, the role of social media in the last election will occupy an important portion.

“Although Bala still felt there still could be a way to balance the tide, she however admitted the upbeat which transformations in the technology eco-system has given the society and good governance. “I commend the commission for sustaining the upbeat of the profile of the telecom sector of the economy”. She said.

Meanwhile while the back and forth on their regulation rages, the OTTs both international and local are spreading their services like wild fire, knocking a huge chunk of revenue off the traditional operators.

For example, Informa’s World Cellular Revenue Forecasts for 2018, says that global annual SMS revenues will fall down from US$120 billion in 2013 to US$96.7 billion by 2018, due to increasing adoption and use of Over-The-Top (OTT) messaging applications.  Another research company,Spirit DSP, in its own report tagged “The Future of Voice” also studied the impact of OTT VoIP (Voice over Internet Protocol) applications on voice revenue, declaring that the overall global telco voice revenues including fixed subscriptions will decline from $970.4 billion in 2012 to $799.6 billion by 2020, at a CAGR of 2.4%.

It is also estimated that, as a result of VoIP, by 2020 the telecom industry worldwide will see a loss of revenues approximately worth $479billion which accounts for 6.9% of the total revenue from voice. Although, these forecasts, when they happen, could give tremendous economic power to the final consumer, whether they will also do so to tech nations and their GDPs is yet to be seen. Meanwhile, a world renowned research company, Technavio analysts, said there are about 13 top companies in the global OTT market that are expected to help fuel market growth at a CAGR of 18.4 percent between the 2014-2019 forecast periods.

Part of them are:

Apple

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store, just like it’s reinventing the mobile phone with iPhone and App Store, and is the future of mobile media and computing devices with iPad.

Facebook

Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected.

Google

Google’s innovative search technologies connect millions of people around the world with information every day.  it is a top web property in all major global markets.

Netflix

Netflix is the world’s leading Internet television network with over 62 million members in over 50 countries enjoying more than 100 million hours of TV shows and movies per day.