Africa’s largest telecom firm, MTN, has said the activities of ‘over-the-top’ companies like WhatsApp have adverse effects on the sustainability of Nigeria’s telecommunications industry.
The company’s Chief Executive Officer, Ferdinand Moolman, said this while making a presentation at a hearing convened by Senate Committee on Communications on Tuesday.
The hearing chaired by Adeola Olamilekan, vice-chairman of the committee, was organised following the now suspended data tariff hike by the Nigerian Communications Commission.
Last week, NCC had directed the major telecommunications companies to increase data price in order to allow “new entrants” acquire market share and operate profitably. The policy was later suspended following public outcry.
The Senate also asked the regulatory agency to halt the policy.
At the Tuesday’s hearing, Mr. Moolman, highlighted factors impacting Nigeria’s telecommunications industry.
Among these factors, Mr. Moolman mentioned “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.”
Mentioning WhatsApp, Viber etc., he said these companies were eroding gains of Nigeria’s telecom companies and asked Nigeria to take action like the United Arab Emirates did.
He also lamented the inability of operators to access foreign exchange.
“This is particularly debilitating given that most of our inputs are sourced off-shore. This has very significantly increased both operating and capital expenses.”
Also, speaking at the hearing, NCC’s boss, Umar Dambatta, said the move by the NCC last week was to ensure competition.
Mr. Dambatta said major telecom firms offering data at low cost would later raise the price after pushing competitors (new entrants) out of market.
Communications Minister, Adebayo Shittu, told the hearing he was not consulted by the NCC before issuing the directive.
Another major telecom firm, Globacom, however, said floor pricing should be left to market forces and not to the regulator.