Ugly war looming over OTTs

The recent decision by all three telecommunications operators in Morocco to block “over the top” services is the first shot in what is going to turn into ugly war across the Africa continent in 2016. By Russell Southwood.

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The recent decision by all three telecommunications operators in Morocco to block voice-over-Internet protocol (VoIP) and other IP-based services is the first shot in what is going to turn into ugly war across Africa this year.

IP-based services are eating away at operators’ premium international calling services. With 4G/LTE now spreading rapidly across the continent, operators are on the wrong end of these changes.

On 5 January, Moroccan users of Skype, Viber, WhatsApp and FaceTime woke up to find that these services had been blocked by Maroc Telecom, Meditel and Inwi on both 3G and 4G. The blockage was, in the words of a local report in Medias 24, “quasi total”. Use of VoIP calling on Wi-Fi still worked, but only intermittently.

According to a source Medias 24 spoke to at one of the operators, the intention was to keep the block in place over the next two months. The operators felt they were on solid ground because the country’s regulator has said that IP services were legal but could only be operated by licensed carriers.

Moroccan YouTube channel operator Amin Raghib, who has more than a million subscribers, complained: “I’m completely against this blockage… I pay the operator for Internet [and] among Internet services is VoIP. It’s the operators’ nightmare. These applications lower operators’ revenues, particularly with the implementation of 4G.

“The traditional telephone line is in the process of dying out. In the US, VoIP is completely legal and this has inspired the operators to be more creative about offering Internet services rather than telecoms ones.”

It took the Moroccan regulator two days to respond. When it did, it reaffirmed its position that “all providers of public communications services must conform to the legal and regulatory obligations covering the sector and that terms of their agreement [with the regulator]”.

It’s tempting to dismiss these developments as yet another inconsequential dispute about the legality of VoIP. After all, it’s an issue rumbled on for the past 15 years across in Africa. However, there are two factors that will make this a make or break year:

— Three applications, Skype, WhatApp and Viber, are growing quickly in popularity right across the continent. When I was in Mali, one of Africa’s poorest countries, last year, everyone I spoke to said Viber was the most popular application. Operators tried to block it and failed. For a country like Senegal, where 52% of the population now has a smartphone, the increasing use of IP services is not just likely but guaranteed.

— Some of the larger international mobile operators (including one of the key ones in Morocco) have been conspiring to campaign to undermine the success of “over the top” providers such as WhatsApp and Skype. Their aim is to block OTT services and then provide premium data services to access them. The problem for the operators is that not all of them agree with this stance. For example, Tigo recently boasted that it has a million Swahili users on Facebook.

What is at issue here is the way data is sold and used — both at a retail and wholesale (peering) level. It could completely change the nature of the industry. Blocking VoIP services on the basis that they are illegal is the equivalent of holding back the future. Both regulators and operators have to admit to themselves that tomorrow’s industry will be unlike today’s and start putting in place regulations that reflect this future. What are needed are unified licences rather than technology specific ones. Licences must not discriminate against the use of IP-based services.

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  • Greg Mahlknecht

    With their stance on the subject, CellC must be hoping and praying that Vodacom/MTN succeed with their OTT bid.

    Of course, this could backfire horribly on MTN/CellC in that they make a ruling on OTT services and decree that they can’t shape/charge extra for them. If were the opposition, I’d argue that VOIP/Instant-Messaging gives the poor a massive capacity to uplift themselves and that it can’t be deprioritized, etc – go on the offensive. Right now the MNO’s can legally, and have a very good case to shape/deprioritize the data a lot like torrents are on ADSL.

  • Andrew Fraser

    This is a war that the operators can’t win. They may win a small battle by disrupting the services in the short term, but over time two things will happen:

    1. Networks that act in this way will lose customer support. Acting in a manner that is so contrary to consumer interests is just an invitation to a competitor to position themselves as consumer champion, and a prelude to subscriber churn. Cell C is already taking this approach. T-Mobile in the US also positions itself in this way against the AT&T/Verizon duopoly.
    2. VOIP and messaging applications will morph or new players will enter the market with products that can’t readily be identified by their IP protocols, either by tunneling or some other method. The nature of the internet is disruptive, and the costs to the networks of fighting on an ever-changing battlefield are too high to be worthwhile. Rather than trying to stifle other innovation, it would be better for these networks to be more innovative.

  • Andrew Fraser

    If this happened in South Africa, with all networks blocking access on the same day, I think I’d be the first to lay a complaint at the Competition Commision. That is obviously collusion and reprehensible.

  • Roger

    You’re also missing the fact that allowing companies to choose what services consumers can use is a form of censorship. If they can stop Skype, whats to stop them from limiting email, news or other sites? Data is data. It’s a very slippery slope when you allow companies to opt out of net neutrality and give them the freedom to block services that may compete with other parts of their group.

  • Greg Mahlknecht

    Exactly. And that’s the problem. They are attacking this on 2 fronts, both of which are flawed:
    1. “OTT is hurting our bottom line, we can’t invest more in infrastructure” – flawed argument, because anything you do on a data connection is OTT, they’d have to cripple their connections beyond recognition to uphold this argument.
    2. “WhatsApp, etc don’t have legal intercept”, etc – flawed argument because they’re cherry-picking a few services, it’s very clear they want to kick WhatsApp and friends in the teeth where it encroaches their bottom line, but will let the rest slide past, so it’s clear their intentions aren’t actually on those legal grounds. (google “Vodacom imessage” and you’ll find links by Vodacom to Vodacom hosted guides on how to get it to work. Perhaps they should let their departments agree on a position before taking it to parliament).

  • CharlieTango

    Vodacom, MTN and Telkom should take a closer look at the e-tolls saga before they piss off their current customers even more. As a customer of all 3, I am becoming fed up with their stance on OTT services.

  • Nanoflex

    Even if MTN/Voda starts blocking it locally or charging more for voip data , I’ll just use mine in an encrypted connection and I’ll spend all my time educating everybody else on how they can do it as well.

  • Tuesday Is Soylent Green Day

    Stifling competition is in the DNA of corporate SA. Its so much easier than having to actually be innovative because that requires inspired leadership…what this country sorely lacks.

  • The Spark

    Agree. Vodacom are a bunch of lazy gimps. MTN are a bunch of morons.

  • The Spark

    Exactly. That’s why we are so far behind the rest of the world now.

    Instead of being the winners at a sport, we are the whining bullies.

  • It’s already obviously collusion. See how many quotes you can find, verbatim, that are exactly the same between Vodascum and EmptyN’s representatives. Look for weasel terms like level the playing field, cannibalising. Then look at the abrupt turnaround of Vodascum who all of a sudden denies vehemently that they called for ICASA to regulate OTTs.

    I wonder what prompted this ICASA hearing?

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