The Nigerian telecoms market is not ready for the regulation of over-the-top (OTT) services that deliver their information over the internet in competition with local telcos, a study by the industry watchdog reveals.
Following the decision of Twitter to delete a controversial tweet by President Muhammadu Buhari, the Nigerian government suspended the operation of the social media service and also announced plans to regulate OTT and social media services in the country.
Meanwhile, the Nigerian Communications Commission (NCC), which probed the operations of OTT services and their impact on the local telecoms industry has outlined conditions to be met before regulation can be considered.
“The Commission should conduct a stakeholder’s consultative forum on the provision of over-the-top services in Nigeria to determine if regulation is required for such services and its impact on the growth of the Nigerian Telecoms industry”, the study conducted by the Policy, Competition & Economic Analysis Department of NCC recommends
After the stakeholders’ consultations, “the Commission should review its Guidelines on the provision of International Gateway and Voice over Internet Service and also consider an appropriate Framework for Provision and Regulation of over-the-top services in the Nigerian Telecoms market”, according to the report.
OTT Regulation ‘must not stifle innovation
The study authors recommend that the telecoms regulator “must ensure that it does not stifle innovation since internet penetration is still evolving, access speeds are still low and there is limited coverage of high speed broadband in Nigeria.”
As of May this year, the Nigerian telecoms industry 187,026,517 subscriber lines representing 97.98% coverage of the population; 140,488,490 active internet connections and 75,569,442 broadband connections estimated to have reached 39.59%, according to NCC market information.
Rather than see OTT services as competitors, the study authors reckon that NCC should encourage Nigerian telcos “to innovate and explore more efficient business models that would enable them compete favorably with OTT service providers. Network providers can also take advantage of the internet protocol technology in the design for their network upgrades.”
In the wake of the Twitter suspension, President Buhari last week named a Federal Government team to hold talks with the U.S. tech giant that owns the social media service with a huge user base in the country.
Alhaji Lai Mohammed, Information and Culture Minister chairs that includes Abubakar Malami, Attorney General of the Federation and Justice Minister; Dr Isa Pantami, Communications and Digital Economy Minister, Foreign Affairs Minister, Babatunde Fashola, Works and Housing Minister; Festus Keyamo, Minister of State for Labour and Employment and other relevant government agencies.
Meanwhile, the NCC study underscores that evolution of telephony and other communication services has driven the transition from first-generation cellular networks to third and more recently fourth-generation networks “which largely ride on internet protocol in various parts of the world.”
The report says that “the access to 3G and 4G networks which offer mobile broadband and high-speed IP data networks has further encouraged the uptake and growth of new modes of communication such as over-the-top (OTT) services which in turn enables the provision of services such as live streaming; and voice over internet protocol (VoIP).”
According to the authors, OTT services “are services carried over the networks, delivering value to customers, but without any carrier service provider being involved in planning, selling, provisioning, or servicing them, thereby implying that traditional telcos cannot directly earn revenue from such services. These over-the-top services include services such as Internet Protocol (IP) Telephony, live streaming, and other social media applications.”
Authors of the study say that “to better understand the nature of OTT services and how it directly impacts the Nigerian Telecoms market as well as what steps need to be taken by the Commission (NCC) if any, several pertinent questions need to be addressed.”
They recommend that some of such questions should include:
- The appropriate time for establishing a regulatory framework for OTT Services considering issues such as internet/broadband penetration and internet access speed;
- Licensing structure/ regime for OTT Players if necessary;
- Impact of OTT services on traditional revenue streams; and
- What security measures should be taken to address the security challenges of OTT services?