Godfrey Ikhemuemhe
14 April 2004
The gathering momentum for the adoption VoIP as the underlying technology for its telecommunications network has torn the communications industry in Nigeria apart along service provision paths.
While the GSM and some telephone services operators see such idea as inimical to their operations and the growth of the industry, Internet Service Providers, VSAT and Satellite services providers see it as the required panacea that would revolutionalise the telecommunications industry for the better. And both are so fixated to their positions that compromise seem far away. Even the forum on VoIP policy framework called by the NCC two weeks ago to address the issue has not been able to sway the positions of the two differing groups; instead firebricks were thrown at each other by the groups.
Voice-over-Internet Protocol (VoIP) or IP Telephony is that technology which permits the transmission of voice traffic over the Internet.
Originally, Internet was purely for data and so attempts to transport voice over it resulted in poor quality of calls, delay and echo. But with the advancement of technology, this shortcoming has been overcome, bringing together voice and data on the same platform.
The earlier VoIP technology began in the 1990s with computer-to-computer networks that made calls on Public Switched Telephone Networks through prior arrangements with traditional carriers possible.
Now with the challenge of universal service, high tariff and low income consumers facing operators in the country, it has become expedite to look at IP Telephony as a viable alternative to circuit-switched networks. IP protagonists say it offers cheap calls, flexibility and ease of deployment.
Dr. Chife, Chief Executive of Socketworks, believes that there is a compelling reason for Nigeria to begin to migrate to IP based networks because, according to him, VoIP would provide Nigeria with the leapfrog technology, stressing that now is the time for Nigeria to jump on the bandwagon because IP is a force that no one can stop.
In the same vein, Dr. B. Carew, Managing Director of Techinvest says that Nigeria should begin to prepare itself for next generation networks through the development of IP infrastructure as it provides a perfect bridge for the country to jump onto the next generation networks wagon.
CISCO, renowned leaders in the deployment of IP network strongly share in these sentiments. The company's Vice President for Eastern Europe, Middle East and Africa (EEMEA), Mr. Reza Mahdavi, told Vanguard in Lagos last month that IP represents the fastest way for Nigeria to take advantage of recent advances in Internet technology.
Reza says that if the country were to grow the economy quickly in the next few years ahead, the way is to increase access to knowledge through the Internet. This, he said, can be made easier by IP.
Reza says: "I think if this country is going to take the incremental step they will take another 30 years for you guys to be on the same level as some of the countries in Eastern Europe. But if the country will take the decision of going immediately unto installing IP, I think the distribution of wealth will be maybe half in terms of the time. Because there is a clear correlation between wealth and economic growth and the penetration of the Internet technology."
But GSM operators are leading the opposition to IP networks. Their concern are well founded. Ogogoa Chioke, General Manager Regulatory and Governmental Affairs for Econet Wireless in his opposition to IP argues that GSM operators have invested enormously on their current technology and sees no reason why such investments should be pulled down within a few years for another grandiose technology.
Chioke at the NCC organised forum for IP Telephjony earlier in the month, told a gathering of operators that "with so much investment by GSM operators, new investments in VoIP would not make any commercial sense".
He further raved: "If we look at growing the telecommunications infrastructure in Nigeria, somebody must put down the investment and work out how to benefit from it", stressing "who will invest in this infrastructure and what would happen to the existing infrastructure?"
Chioke got support from MTN, the nation's largest GSM operator. Mr. Michael Ikpoki, Regulatory Affairs Manager for MTN, contends that adopting IP would further encourage call dumping on big networks as VoIP hackers easily pass international calls through the networks of big operators without paying. That way, he says, the networks continue to lose money on their heavy investments.
To Mrs Z.M. Rasheed of the technical department of NITEL, even though she agrees that IP is the way to go for Nigeria to catch up with next generation networks, she is however at a loss about what would happen to the networks currently in existence. Like Chioke, she wonders if the owners of such networks would be compensated given their enormous investments in those networks.
The impact of IP on telecom operators indeed goes beyond these fears.
The first issue that would be hit by IP Telephony is the revenue stream of telcos especially GSM operators who have invested heavily on International Gateway licences. IP has no place for International toll Gateways because IP calls are passed over the Internet.
What this means therefore is that the International Gateway licences for which operators paid so much just some few years back would become irrelevant. Most of these operators have not gotten any return on those investments after the huge fees that preceded the licences.
Even on the local front, operators would also lose money to some crooks who are IP telephony operators. Without interconnect agreements with existing networks, it is possible for them to pass calls on to those networks without paying for them. In essence, they would get their calls to be carried free of charge while they make easy money from their clients.
Indeed, James Allen, a Senior Consultant with Analysys Consulting Ltd., United Kingdom who presented a paper at the NCC Forum earlier referred to, contends that the issue of interconnect would be a major source of dispute under an IP regime.
Yet it is also pertinent to mention that IP would also put small companies in tight straits because of the large capital outlay required for building IP infrastructure. But given the fast movement of telecommunications technology, the challenge would be for telcos to be able to muster enough resources to keep pace. In third world countries like Nigeria, not many telcos can afford to keep pace and would thus face hard times.
It is however gratifying to know that despite the obvious threat of IP Telephony to existing networks, NITEL, the Nation's first carrier, says it would go ahead to build a national IP infrastructure in the near future. Mrs Rasheed says that NITEL now understood that it had to embrace new developments in technology which would make telecom services more accessible to the people. This is a far departure from the previous attitude of NITEL which viewed IP Telephony as an illegal service which must be crushed.
Engr. Bayo Banjo, CEO of Discom, a PTO, is an ardent believer in VoIP. He admonishes his colleagues in the sector to be matured enough to know that sometimes, technology renders some businesses irrelevant and so they should embrace IP without any conditions.
He contends that what should be paramount in the minds of all operators should be the accessibility of telephone to all Nigerians irrespective of what technology.
Banjo takes on the GSM operators pointedly by saying that they appeared selfish in their arguments against IP Telephony. "But for any civilised people, the first priority should be the people. After then comes commercial interest", he told them at the NCC Forum on VoIP.
Furthermore, Banjo believes that a "free" network in which there are no boundaries, like IP offers, would be better for the country even though some telcos will lose money on the short run. This argument is part of his belief that accessibility should be paramount over commercial interest. He also sees the need for the NCC to review its licences in this regards so that telcos can build their business models along the lines of current realities.
Meanwhile, despite the loud clamours for the development of IP infrastructure in the country, the Nation's regulatory agency for the Telecom sector, the NCC, is not yet decided on how to regulate VoIP or whether to regulate at all. Ernest Ndukwe, the boss of the agency says that as an evolving technology, the NCC had to watch first before coming out with a regulatory framework for VoIP.
He has the support of Engr. Charles Joseph, the President of the Association of Telecommunications Operators of Nigeria (ATCON) who said that instead of regulation, the NCC should allow PTOs develop IP network and arrange amongst themselves how to settle interconnect rates and charges for those who drop calls on their network.
But Mr. Chioke of Econet Wireless disagrees. "If we think of growth, VoIP must be regulated", he said, stressing that these are issues that must be decided upon from the onset.
Given these contentions, Ndukwe may have decided to play safe. He told operators gathered at the NCC Forum that the NCC would set up an industry group to do a study on the issue which would form the basis of the NCC decision in the future.
But however safe Ndukwe may want to play on this issue, one thing is clear; IP Telephony is a hurricane which no mortal can stop. The earlier the NCC shows the way on how the country goes about the inevitable transition from legacy networks to next generation networks, the better for us.
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