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Author: admin
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Disruptive technologies take toll on the bottom line of telecom companies



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These are certainly not the best of times for telcos in Nigeria. Disruptive technologies have come and with its coming are daunting challenges. Disruptive technologies can are now in virtually every facet of human endeavours. From car hailing, advertising, education, financial service to e-commerce, it has left its mark by disrupting the traditional way of doing things and had left in its trail, job losses and shut mortality of businesses.
In the telecoms sector, disruptive technologies manifest in the emergence of Over-the-Top (OTT) apps which allow users to access services such as Voice Over Internet Protocol (VoIP), live video streaming. Other social media apps such as Facebook Messenger, WhatsApp, Blackberry Messenger (BBM), Viber, Skype, Google+, Pinterest, Instagram and many more also play in the space.

These OTT offer services over the networks, deliver value to customers but without any carrier service provider being involved in planning, selling, provisioning, or servicing them.
Executive Commissioner, Stakeholder Management, Nigerian Communications Commission (NCC), Sunday Dare, said active subscribers figure witnessed decline because subscribers prefer to use these OTT platforms for making voice and video calls as well as send messages. This means that the traditional telcos cannot directly earn revenue from such services and they are literally now screaming, as they see their incomes continue to nosedive in the face of these disruptors.

The Chief Executive Officer, MTN Nigeria, Ferdi Moolman, captured the impact of OTT when he made a short presentation before members of the National Assembly . He had said: “MTN is committed to continue its efforts to provide the best data network to the people of Nigeria. In this regard, however, there are a number of factors that impact the sector’s sustainability such as: the depletion of operator revenues by unlicensed providers of “over-the-top” telecoms services who do not have any physical presence; nor pay any taxes; nor make any significant contribution to employment or other socio-economic objectives of government in Nigeria.”
When South African leading carrier, Vodacom released its interim results for the six months ended 30 September 2016, it showed sharp decline in short message service (SMS) volumes declined.
SMS volumes peaked in September 2011, with 3.3 billion messages sent over a six-month period on Vodacom’s network.

Since then, SMS volumes have shown a steady decline – which is mainly a result of the increased use of messaging services such as WhatsApp and Facebook Messenger. In Nigeria, the uptake of WhatsApp and Facebook Messenger is fueled by the increased use of smartphones which is a product of affordability.
The telcos have been aggressively growing their smartphone user base by making more affordable devices available in the market by partnering original equipment manufacturers (OEMs). They have been doing this in the hope of shoring up revenue lost to voice calls from data services. This however appears to be hurting the interests of the telcos.These users then take advantage of the benefits of mobile messaging services.

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