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‘Telecom providers may face tech interlopers in 2019’ – Vanguard

‘Telecom providers may face tech interlopers in 2019’ – Vanguard

…as activities of OTTs continue to trigger loss of revenue

By  Emmnauel Elebeke


It appears telecom opera-tors may break out of the route of just providing connectivity, but face fierce opposition in the form of technology interlopers in 2019.

This was revealed in GlobalData’s latest thematic research.

The study reveals that in domains like the cloud, artificial intelligence, AI, and Software Defined Networks, SDN, operators globally need to establish their relevance and build a convincing proposition.

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GlobalData’s Thematic Research Team set out to know the big themes impacting telecom operators globally. It also predicted how they will evolve over the next 12 months and also identified the leading and lagging companies in a world filled with disruptive threats.

Senior Analyst for GlobalData, Laura Petrone, said: “Telecom operators are increasingly seeking to move beyond the dumb pipe of simple connectivity and diversify with the cloud, AI and SDN.

This trajectory, she said, will bring them into direct competition with technology interlopers that are also actively targeting segments that telecoms operators might once have seen as their own.”

She cautioned that telecoms operators should also watch out for China’s growing influence over technology standards as part of the country’s ambition to dominate next generation technologies.

“China’s commitment to technology leadership is not just a matter of record; it is an intrinsic part of the country’s strategic plan. We expect to see China trying to exert greater influence over the rules for next generation telecom standards such as 5G and the Internet of Things, IoT, in much the same way as Europe dominated 2G and the US 3G and 4G,” Petrone posited.

“Already,  telecom operators have been complaining of the activities of OTTs like facebook, whatsapp, WeChat, Imo, Viber and all others rendering services on the back of their networks.

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Operators are short of branding them interlopers, critically calling on the government to either license their operations or stop their activities.

On several ocassions, the Association of Licensed Telecommunication Operators of Nigeria, ALTON, has flayed the impact of over the top, OTT service on the telecom operations in the country.

Chairman of the association, Engr. Gbenga Adebayo has maintained that: “In Nigeria OTT service  providers utilise traditional Mobile Network Operator, MNO, infrastructure to offer social networks, voice and instant messaging services to retain users’ loyalty and drive stickiness, with a view to creating large on-line communities and eventually attract huge advertisement revenues.”

Although he admitted that his members neither have rights nor control over the OTT services, as customers have the discretion to use the Internet as desired, he however said government could do something to protect and keep the traditional operators who pay taxes in business.

He lamented that increasing usage of OTT services by customers is adversely impacting traditional telecoms platforms.

According to Adebayo, “there are  displacement effects which include declining voice minutes due to impact of OTT while VoIP has been increasing, OTT Data flux has been increasing as shown with the 2016 data, Telcos are losing money due to this trend.’

“Telecom Operators incur the costs while OTT players make the money. Telecom operators invest a lot on network infrastructure in order to provide basic and innovative services to customers. Core voice and SMS revenues are decreasing continuously due to impact of OTT players who offer voice, video and messaging services free of charge to their users. Telecom operators will continue to invest a lot to make the networks support the data tsunami, with the required quality of service and numerous innovative services.

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Meanwhile, some studies have backed the agitation of ALTON with statistics which tend to show that if the trend continues,revenue of the operators may experience a drastic plunge.

Some  reports  predict that the growing adoption of OTT services by customers instead of traditional telecoms services will occasion global revenue loss of $386bn over a period of six years (2012 – 2018) for the traditional telecom operators, thus endangering network development.

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