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‘Data residency, investments crucial to solving OTT, telcos war’

As a win-win approach to the lingering issue between telecoms operators and the Over the Top (OTTs) players, stakeholders have renewed calls for data residency regulations in Nigeria.
According to them, an outright ban would be difficult, going by the growing influence of OTT in the global market and how it has impacted the society.

OTT services in Nigeria include Voice and Messaging service applications such as: WhatsApp, WeChat, Skype, Facebook, Viber, Imo, among others.

From 2012 to 2018, a report from Ovum, informed that the adoption of OTT services by customers instead of traditional telecoms services will occasion global revenue losses of $386 billion.

Despite what looked like a parasitic relationship between the two entities, stakeholders, who gathered at the 2019 Telecom Executives and Regulators Forum (TERF), organised by the Association of Telecommunications Companies of Nigeria (ATCON) in Lagos, stakeholders pointed out that there should be collaboration between the two entities.

Leading the ‘Formulation of Policy and Regulation of OTTs: Challenges and Prospects’ panel, the Chief Executive Officer, MainOne Cables, Funke Opeke, said OTTs as service providers that typically provide content over the top of telecommunication networks, hence their name, OTT.

Dishing out statistics about OTTs, Opeke said the parent company of Google, Alphabet, in 2018, raised revenues of about $136 billion, had a budget of $21 billion for Research and Development (R&D), and the net income was $31 billion. She put the firm’s peak evaluation at over $900 billion.

According to her, Facebook, also in 2018, had revenues of $56 billion, had R&D budget at $11 billion, its net income was $22 billion and its evaluation is about $500 billion, “Nigeria’s national budget is about $25 billion.”

The MainOne CEO noted that these statistics show how potentially overwhelming the activities of these companies, of which are including Amazon, Apple, Alibaba, among others can be to different countries if a firm decision is not made concerning them.

Other members of the panel, though with different opinions, believed that in the best interest of the nation, OTTs should be embraced instead of rejected.

They proposed, instead, that these companies be regulated and demands made from them; to help improve the nation’s economic growth as there are great potentials to be gained from collaborating with the OTT companies.

They posited that considering the fact that these companies are not indigenous to any country and obey no particular political order, measures should be set up for their modus operandi in Nigeria.

The Chief Executive Officer, Medallion Communications, said: “It is true that OTT operations are cutting deep into the revenue generation of telecoms operators, who spent so much money to build the network on which OTT players are riding upon to provide free services to customers, but I am happy that telecoms operators also see the need for OTT players to operate in the ecosystem because they are contributing in driving increased broadband penetration in the country.”

The Executive Chairman, Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, in his keynote speech at the forum, highlighted the key trends shaping the telecoms industry to include high demand, disruptive competition growth like the OTT/Telecoms competition, data dominance, and connecting things.

Danbatta who was represented by the Director, Policy Competition and Economic Analysis at the NCC, Mohammed Babajika, said the trend necessitated conceptualising innovative ideas within the telecommunications ecosystem as a central requirement for the industry sustainability and investment drive.

To the CEO, IPI Solutions Nigeria Limited, Adamu Garba, the country is still in a learning process, “which requires that we should have eyes on data leaving this country.”

Garba said that Nigeria should come up with policy framework for data residency. He stressed that data is gold mine, which should be guarded jealously.”

Like other panelists, the CEO of HD Technologies Limited, Ibrahim Kabir, noted that there is need for data domestication in the country. Kabir said OTTs influence and impact cannot be ignored because, “they have helped to bring SMEs from this part of the world to the globe. This is expected to drive the economy.”

Managing Director, Trefoil Networks Limited, Onochie Amasiani, OTT remains a threat to traditional broadcast media.

According to him, regulation of OTT means that NBC and NCC must align “because content creation is basically of NBC.”

From MTN, Funsho Finnih, rather than regulating OTTs, “I think it should be more of collaboration.”

Like Finnih, Chief Technical Officer, Spectranet Limited, Arun Panda, said OTT should be encouraged so as to foster faster innovation in the country.

Panda said OTT services have greatly impacted on smartphone penetration, which he puts at about 40 per cent in Nigeria and 60 per cent in South Africa.

According to him, OTT players can be asked to bring their headquarters to Nigeria so that they can be taxed.

He stressed that lack of infrastructure remains a major challenge, “as such there should be incentives to operators for infrastructure build out.”