Tuesday February 11 2014

How will telecoms fight Whatsapp?


By Mustafa Ziraba

Fact: All telecom companies are witnessing a drastic reduction in their sms revenues because of the ever so popular messaging apps like Whatsapp, Viber, Facebook Messenger etc. At the club, cinema, or taxi you won’t be hard-pressed to find smartphone screens glowing in users faces, as they type away. What is more terrifying for me, is the looming threat to telecoms traditional business models and infrastructure of voice calls.

Cheaper calls nowadays
Today, any tech savvy user shall every once in a while place a call, not traditionally, but through applications like Viber or Skype which basically use the Internet for voice communication, a system technically known as Voice Over Internet Protocol (VoIP). Not only is it cheaper but on top of VoIP, many applications, particularly on smartphones, come with added multimedia offerings like the ability to send audio, videos and pictures. However, many times it may be less reliable in contrast to the conventional way. All the inefficiencies that might be present in accessing the Internet manifest with this kind of service.

How are the telecoms fighting back? One way is to offer a value proposition to increase sms use. The other way which is more plausible is simply increase data charges to make up for the lost revenue. Recently Orange shuffled their Internet bundles in such a way that I am forced to buy more data to last me a month.

While this is fine, an even bigger and radical route, being toyed around by many service providers globally, and which is a sticky point for many stakeholders, is taking away the neutrality of the Internet you get. Currently, there are no restrictions on what parts of the Internet that people can access, except for what the government decides or your IT department decides. For example, there are no restrictions or preferences over emailing, file sharing, instant messaging, VoIP, Video Chat etc. Everyone is free to use the Internet as they wish and for whatever reason.

In many companies, access to specific sites such as Facebook, and more dramatically, the porn sites is restricted. At the risk of making the IT guy seem really cheap, what if you gave him or her Shs20,000 for a week’s worth of access to all the restricted content at your desk? Sounds like a good deal right? Now using the same analogy, think about the telecoms actually monetising your use of popular platforms. For instance, instead of just buying data, you might be required to pay a little extra for access to Whatsapp or Facebook or even Gmail.

Introducing Internet neutrality
Basically they can decide what parts of the Internet people can access and what parts are blocked. With Internet neutrality, service providers can decide what types of services have preferential transfer rates. For instance, if MTN or Orange through internal and/or external information knows that at a specific time of the day, there is a lot of traffic to YouTube, they could give preferential transfer rates to YouTube during that time. This makes numerous users of YouTube at that time find MTN an excellent provider because of the flawless speeds, while elsewhere, people on another network access to another service is suffering.

Unless there is specific legislation monitored by Uganda Communications Commission that articulates and speaks to the idea of having unrestricted Internet traffic, I see a future where access to specific parts of the Internet might be restricted, with the restriction being eased by paying a little extra.

A more dexterous way on the telecoms part is having Internet tiers where the top tier gets the fastest data transfers, so unless you are part of that group, having those Skype and Viber calls comfortably might not be an option.