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Free web operators threaten national security — Experts

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.Conference participants list dangers to Nigeria by Over The Top, OTT operators
.As experts, stakeholders call for urgent, strict regulation of OTTs

By Prince Osuagwu, Hi-Tech Editor & Juliet Umeh

LAGOS — The security and wellbeing of Nigeria and its peoples may be under serious threat from the operations of OTT (Over The Top) service providers in the nation’s telecommunications sector unless serious, concerted action is taken.

This was the summation of experts and stakeholders at a workshop,  Unlocking the Revenue and Growth Opportunities in the Sector in a Changing Business Model and Digital Technology Environment: Role of Regulator, Operators and OTT Service Providers, organised by Vanguard Media Ltd in Lagos, yesterday.

Over the top (OTT), according to Wikipedia, is a term used to refer to content providers that distribute streaming media as a standalone product directly to viewers over the Internet, bypassing telecommunications, multichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content.

Indeed, many participants at the workshop agreed that the nation and her peoples may be headed for another form of slavery unless the operations of OTT service providers, which also cut across virtually every sector of the economy, are subjected to “full disclosures and regulation.” This, they said, is because “telecommunications is the infrastructure of infrastructure.”


In addition, participants warned leaders in the corridors of power to be wary of initiatives coming from abroad in the form of “Foreign Direct Investment”, usually quoted in foreign currency, which could destroy the economic base of the country.

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Not done, the nation was also warned of dangers of free internet services, free messaging services, free broadband, and others, which they said will have the effect of under-developing the nation and her peoples.

The workshop, which focused on the impact of OTT operators in the Nigerian telecom also sector x-rayed dwindling revenues of service providers and fleshed out national security implications if OTTs are not brought under regulatory cover.

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Executive Vice Chairman of the Nigeria Communication Commission, NCC, Prof Umar Danbatta, kick-started the discussion with a keynote speech on the theme of the event.

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Danbatta, represented by Director, Technical Standards and Network Integrity, Eng. Bako Wakil, said that most industry players still focus traditional services like voice call and Short Messaging Services, SMS, which are now suffering decline while OTT services such as WhatsApp, Snapchat, Facebook Messenger and Skype are fast replacing them as primary methods of communication.

He noted that the business of telecommunication requires partnerships, and challenged the telcos to urgently tweak their business models to confront erosion of their revenue base by the OTTs, headlong.

He added that the old business models created by the operators are no longer sustainable, saying this is why they are suffering gradual erosion of their Average Revenue Per User, ARPU.

Wakil also said that for now, the regulator is not regulating the activities of OTTs in any form even though “conversations are on-going” on possible ways of creating a middle ground between the telcos and OTTs so that both can coexist in a friendly ecosystem.

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Nätional security under threat; NCC comes under fire

Immediately Wakil finished his presentation, operators faulted the regulator’s stance, saying it would not only violate local content policy but could also create a dangerous national security question.

Chairman of the Association of Licensed Telecom operators in Nigeria, ALTON, Engr Gbenga Adebayo countered that instead of technology neutrality the NCC should collaborate with the Central Bank of Nigeria, CBN to evolve a regulatory framework capable of making both OTT players and mainstream telecoms operators remain in business without the dagger-point relationship that exists today.

Adebayo argued that the surge in OTT services have enormous social, economic, security implications due to the fact that they are neither licensed nor regulated which now pose trade danger for telecoms.

His words: “The OTT service providers are not regulated and that means there is no limit or scope to what they can do; no control over the services and content they can provide.

“In real truth, the problem is that the proliferation of Over The Top messaging apps (applications) and internet calls, which use the internet to deliver content, is eating into the revenue of Main Network Operators (MNOs) used to enjoy.

Over the top service providers utilizes traditional Mobile Network Operators (MNOs) infrastructure to offer social networks, voice, and instant messaging services to retain user loyalty and drive stickiness, with a view to creating large online communities and eventually attract huge advertisement revenues.

The telcos have neither rights nor control over OTT services, as customers have the discretion to use the internet as desired.

“Telcos invest a lot on network infrastructure in order to provide basic and innovative services to customers. Even as core voice and SMS revenues are decreasing continuously due to the impact of OTT players who offer voice, video and messaging services free of charge to users, the telcos will continue to invest a lot to make the networks support the data tsunami generated by the OTTs. That means the telcos incur the costs while OTT players make the money without paying anything either to telcos or government”.

National security at risk

Adebayo said that beyond all these is the security risk their operations pose to the nation.

He said: “OTT players also hold many customers’ personal data they can use for any desired purpose without risk of being sanctioned by the government while telcos are forbidden to use or disclose subscriber information to third parties.”

He, however, recommended that the NCC give special incentives to telcos to cushion the effects of their revenue losses or adopt the “same service, same licensing” regime, which he described as international practice, to avoid distortion in the nation’s telecom sector.

OTTs, banks killing small operators

Also, the National Coordinator, Wireless Access Services Providers of Nigeria, WASPAN, Mr Chijioke Ezeh, agreed with Adebayo that leaving the activities of OTT service providers open will endanger the economy further than it has already done.

Ezeh said that the number of value added service providers has dwindled since patronage to their services now go to the OTTs and banks. He specifically lamented that both recharge card manufacturers and vendors have been put out of business as the services are rendered by banks who introduce vending apps on their platforms.

According to Ezeh, “there have been arguments that there is a competition among OTTs Telcos and VAS. This is akin to calling a match between the Super Eagles and Principal Cup winners a competition.

“Competitions have rules set on a level playing field. What is currently obtainable today is that whereas Telcos, VAS and OTTs offer similar services such as voice, text and data services, only Telcos and VAS are licensed and heavily monitored. OTTs have a free rein.

“Nigeria’s telecoms industry is summarily owned by foreigners. In the earliest days, investments and forex-based investments were heavy. However, the market has expanded into several other categories, which should have encouraged more local investor participation.

The primary responsibility of market creation for indigenous participation and investment is the regulator’s. Therefore, NCC must develop attractive incentives to woo local investors to take advantage of low-barrier opportunities particularly in the service and last-mile areas”

He regretted that to date, there’s yet to be known, any generally acceptable,  and comprehensive industry-wide strategy for harnessing the potential benefits of the telecoms industry, adding that “this is why frameworks, policies and guidelines aren’t always in tandem with themselves or with federal government programs.

Examples of such are the disparities between the Ease-of-Doing Business in Nigeria and Executive Order 5 on Local Content in ICT among others.

Still lamenting the dwindling revenues in the industry, Executive Director, Business Development, Broadbased Communications limited, Mr Chidi Ibisi, made a passionate appeal to the NCC to reconsider its neutrality stance and ensure that the businesses of licensed operators in the country are protected. “when we are saying technology neutrality, are we considering the licensed operator who borrowed money from the bank; who is thinking how to repay the loan and equity? Are we thinking of invasion of foreign operators we do not know where they are operating from? We should be wary of invasion of our national security” he added.


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