Glo, MTN & Others To Lose $386Bn To Whatsapp & Other OTT Voice Apps By 2018

With the rise of social media and internet voice subscriptions, Nigeria telecommunications industry is projected to lose a total of $386bn in voice revenue to the growing usage of Over-the-Top Internet voice applications by 2018.

By definition, Telco-OTT is when a telecommunications service provider delivers audio, video & other media formats over the internet or across an IP network. According to Techopedia, an OTT application is any app or service that provides a product over the Internet and bypasses traditional distribution.

Services that come over the top are most typically related to media and communication and are generally, if not always, lower in cost than the traditional method of delivery examples including but not limited to Netflix, Whatsapp, Telegram, Skype, Facebook, Blackberry Messenger amongst several others.

Ovum Ltd – an independent analyst & consultancy firm headquartered in London stated in a report that the $386bn loss will accrue over a period of six years – between 2012 and 2018 – from Nigerian customers using OTT voice applications.

The impact of these new services is further explained in a report by Credit Suisse as quoted below:

“Proliferation of Over-the-Top content services such as Skype and WhatsApp, among others, could trigger more than a whopping 50 per cent revenue hit on Nigerian telecoms companies’ voice services in the coming months

Prof. Umaru Danbatta – the executive vice chairman of the NCC ruled out licensing of OTT at a forum with telecoms operators recently, thereby foreclosing its regulation.

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According to an article on Punch Newspapers, major operators such MTN, Globacom, Airtel and Etisalat in the country’s $38bn telecoms market said they were also struggling to counter a trend in which the prices of basic voice and data services were declining.

MTN Nigeria said that OTT content services had a “cannibalising effect” on network operators’ voice and data revenue, because they provide “free” services, which duplicate services already provided by network operators such as voice calls and SMS.

Considering the impact these OTT services are having on the Nigeria telecommunications industry do you think a new regulation should be put in place to moderate and control these services?

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