WhatsApp, Skype cause decline of telecom firms’ revenues

Nigeria telecommunications companies

Nigeria telecommunications companies have lamented a serious decline in their revenue as a result of the rapid rise of over-the-top (OTT) content services such as WhatsApp, Skype and others.

According to a report from brokerage Credit Suisse, the threat from these apps against the traditional voice and messaging business of telcos in the country is increasing by the day.

The rapid increase of the over-the-top (OTT) content services like Skype, Whatsapp and others could trigger up to 50 percent drop in revenue for Nigerian telecoms companies, the report says.

This development as gathered from employees at Etisalat is the reason why some of the telecom firms are indirectly raising their data rates to see if they can recover part of the about 50% revenue cost, which in turn is hurting broadband penetration in the country.

Reacting to the development, MTN Nigeria public relations manager, Funso Aina, said, “OTT content services have a cannibalising effect on network operators’ voice and data revenue because they could provide free services, which will duplicate services already provided by network operators such as voice calls and SMS.”

Giving an example, he said WhatsApp provides free instant messaging services as an alternative to text messaging services offered by a mobile network operator and the same WhatsApp has also launched a free voice service.

He said the problem is that these services are provided using network infrastructure of operators but without commensurate compensation to operators.

By Pita Ochai

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