The policy division within the Nigerian Communications Commission (NCC) has released an overview of the provision of Over the Top (OTT) services days after a telco made public its intention to block voice and video calls on WhatsApp, Facebook and Skype.

The report touches on how 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 OTT services.

This, in turn, enables the provision of services such as live streaming and voice over internet protocol (VoIP). However, telcos in Nigeria claim such services eat into the revenue they generate through international calls because of the country's large expatriate and diaspora population.

The report notes that while VoIP or internet telephony is cheap and offers many features previously unavailable with telephones, the innovation comes at a price for regulators as the "nature of the technology creates unique (and previously unheard of) regulatory obstacles" as well as being susceptible to security glitches.

However, rather than kick against the OTT services, the report makes recommends to the NCC on how to address OTT-related issues, and states there is a need for telcos "to innovate and explore more efficient business models that would enable them to compete favourably with OTT service providers."

One of such models could require network providers to take advantage of the IP technology in the design of their upgrades, it says, adding that the NCC should conduct a stakeholders' consultative forum on OTTs to determine if regulation is required for such services.

It also recommends that the NCC review its guidelines on the provision of International Gateway and Voice over Internet Service, and 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.

Though the regulation of VoIP services remains a topical issue globally, particularly as it is seen to be a threat to the continuous existence of telcos and their operations, traditional network operators are arguing that they do not have an incentive to continue to maintain or upgrade their platforms upon which most OTT services are hosted unless there is a revenue flow to them.

Nigeria has the largest mobile market in Africa in terms of subscriptions with over 150 million mobile subscriptions at end-2Q16 up from about 148 million a year earlier, according to Ovum in its Africa Market Outlook 2016.

Surprise block

Senior research analyst at Ovum, Thecla Mbongue, agrees that the increased usage of OTT services has negatively impacted on voice usage and revenues and therefore key for telecoms operators to find business models to incorporate access to them.

However, she notes that the telco's publicised plan to block OTT calls surprised her. "All network operators have over the past 2-3 years been working towards that direction and the comment of the "unidentified manager" comes to me as a surprise in a sense that operators are now seeking partnerships with OTT rather than fighting them. In Nigeria only, we can quote all the OTT-related price plans, such as WhatsApp or Facebook data bundles. More recently we've seen ISP Spectranet partnering with Netflix to deploy a server in Nigeria. Subscribers substitute traditional voice calls with data services (OTT, emails..), hence it is essential for operators to monetise data usage."