Telecoms Wage War Against Ott Freebies


By Mellica McPherson-Ganda
Why pay to make phone calls or send text messages when services such as Facebook, Whatsapp, Skype, Viber, IMO, Tango, and Facetime are free to use, with little or no hassle?
However, as the saying goes no good thing can last forever. These free services, widely known as Over-The-Top (OTT), are undoubtedly cutting into the fat profits of telecommunications companies around the world.
OTT freebies are available on the internet providing most welcomed audio and video services bypassing telecoms operators; and this is the crux of the issue worldwide.
Forbes reported that in April 2014 Whatsapp’s – then having 470 million users – erased an estimated $33 billion in SMS revenue from wireless operators. That sounds good to most people since telecoms are notoriously bottom-line oriented; but telecoms do not look at it like that and are infuriated by OTTs. Other sources predicted that “between 2012 and 2018 the entire telecommunications industry would lose a combined $386 billion because of OTT services like WhatsApp and Skype.” That prediction was provided by UK based market analysts Ovum Research.
It remains to be seen if telecoms win the war and if consumers have the alleged whopping $386 billion to spend. The public’s reaction could well have unexpected consequences for the telecoms. Furthermore, what if OTTs were based in China, Russia, North Korea or India? It looks like a ticklish situation, doesn’t it?
Telecommunications companies in the region are also concerned about OTT services, and chief among the concerned is regional giant Digicel — which is one of the four operators in the BVI.
The BVI Telecommunications Regulatory Commission attended the Caribbean Association of National Telecommunications Organization’s (CANTO) 31st Annual Conference and Trade Exhibition that was held at the Hyatt Regency in Miami, Florida, 26-31 July where the topic of OTT services was reportedly canvassed during a discussion.
However, efforts to obtain a comment on the CANTO event from the TRC by this newspaper proved fruitless.
Nonetheless, the meeting seemed vital to officials in attendance, among which were ministers from various Caribbean countries.
One previous mention of the regional OTT concern was at the International Telecommunication Union’s Regional Economic and Financial Forum of Telecommunications/ICTs for Latin America and the Caribbean. That meeting was held in Nassau, Bahamas from 21 to 22 April 2015. During that meeting the most informative points on the issue were presented by Annie Baldeo, of the Telecommunications Authority of Trinidad and Tobago (TATT).
Baldeo disclosed that on 5 July 2014, Digicel announced its intention to block OTT services by Viber, followed by Nimbuzz, Tango and Fring, in Trinidad and Tobago. This move, she said, was followed by service providers Columbus and Bmobile who also announced that they would also block OTT services in the country.
She said that as a result of the announcements the TATT asked the service providers not to block the service pending its investigation of the matter. She noted that the companies considered blocking OTT content because of potential loss of financial revenues.
ECTEL on Digicel
The mentioned notice of blocking by Digicel was publicized by the Eastern Caribbean Telecommunication’s Authority (ECTEL) during a forum that was held in St Lucia on November 10 – 11, 2014.
ECTEL stated: “Digicel recently announced its intention to restrict the use of Over the Top (OTT) services, in particular Viber, to residents of the Caribbean region. Digicel has indicated that it disapproves of Viber’s use of its network to deliver Internet telephony to Digicel customers at no cost. Digicel has further indicated that efforts to secure a commercial contract with Viber for use of its network have failed. ECTEL and the NTRCs note that the restricting of Viber and similar OTT services is in breach of the principle of Internet Neutrality, which ECTEL promotes.”
According to the document, the issue of restricting OTT services was discussed at the level of the Board of Directors, Council of Ministers of ECTEL and the representatives of the five Commissions in the ECTEL member states, and there was disapproval of Digicel’s intention.
Nonetheless, the organization noted that it recognised that the issue also revolved around a commercial arrangement, and said that it will not be drawn into the private commercial dispute save where the dispute falls within the jurisdiction of ECTEL.
“The intention of restricting incoming Viber communications by Digicel amounts to interception, which cannot be justified unless the consent of the sender or the receiver has been obtained. Digicel must therefore be transparent in its Terms and Conditions so that subscribers are fully aware of what they are signing up to,” the Organization warned.
Meanwhile ECTEL anticipates that OTTs will continue to grow, and proposed that the resolution of these issues be approached at a regional level to include all stakeholders – regulators, consumers and service providers.
Digicel on OTT and ECTEL
Digicel later refuted what transpired in the ECTEL statement and accused the organization of allowing OTTs to be on holiday in the region. In a published submission which lists as contact — Kieran Meskell Head of Regulatory Affairs Digicel Group, and Nadia Alleyne, Legal and Regulatory Manager Digicel Eastern Caribbean the company’s view on the operations of OTT service in the region was noted.
The company representatives announced: “Digicel believes that OTT operators providing voice services are operating in contravention of the Telecommunications Act on the basis that they are originating and terminating both domestic and international telecommunications calls without a telecommunications licence”. The company added: “The regulatory holiday currently afforded these delinquent OTT Operators is completely at odds with the regulatory best practice approach which ECTEL has advanced as underpinning the formulation of these Quality of Service standards.”
Digicel went on to state: “It is common cause that the quality standards which are obtainable from the operators of OTT services (both in terms of service performance and customer care) are inferior to those provided to consumers by traditional voice and messaging providers. While consumer advocacy groups might make self-serving and self-perpetuating claims for higher standards these are not supported by the empirical evidence of large scale consumer adoption of lower quality OTT services.”
In certain Caribbean jurisdictions LIME is also being accused of blocking or proposing to block OTT content. The issue remains and on 10 August, Embert Charles Managing Director of ECTEL told regional media that ECTEL’s efforts to persuade against the blocking of OTT continues.
He further stated that the situation does not seem fair to consumers: “You cannot do things to a consumer’s subscription without a consumer’s consent if the consumer has signed up for a service you shouldn’t block that service without discussing with the consumer,” he pointed out.
The limbo factor of the matter is that telecommunications service providers are clamouring for regulators to urgently intervene against OTT content providers who operate outside of the region. Regulators admit that they are two steps behind and need to figure out how to deal with the issue.
In the end the service providers do have the means to block the OTT content, and the question is would they do it in the BVI.