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What NCC should do over licence or regulation of VOIP services 

VOICE over IP (VOIP) is one technology that will impact the way we do business and communicate in this decade and the decades after. A technology that started innocuously toward the end of the twentieth century, it has taken on steam in this decade and threatened the whole communication industry with its ability to change the pricing fundamentals of the industry. VOIP has become such a disruptive technology that it has leveled the field between established carriers and upstarts in the telecommunication industry.

In America, the big carriers initially saw VOIP as a nuisance used by small companies to make cheap intercontinental calls. Until a small company called Vonage established a national VOIP service that made the traditional carriers look like potential dinosaurs. They are now all scrambling to change their networks to conform to the VOIP technology in a fundamental shift that will change the whole communication industry in America. Back home, the effect of this VOIP technology has been profound even though it has not been celebrated. The first inkling of what VOIP was capable of doing was when it forced NITEL to review its international tariff when faced with stiff competition from cyber cafés who offered VOIP calls at fractions of the murderous rates NITEL charged Nigerians.

Thanks to VOIP, this NITEL cash cow became a thing of the past so much so that NITEL was forced to implement the technology and slashed their rates down to as low as =N34 per minute. But VOIP is not finished with NITEL. Rates as low as =N5 per minute are now being offered by Cyber cafes while calling card companies are offering something slightly higher. Where does this leave NITEL? When you hear NITEL complaining of dwindling revenues, you need not go further to know where this is coming from. With the colossal loss of their cash cow, NITEL is also gradually losing the next cash cow, national trunk calls. As the PTOs roll out services nationwide, it is easy for them to boycott the NITEL trunk service by implementing VOIP between their locations hence boycotting NITEL. This is happening as I write and unfortunately for NITEL, it no longer has the power to muscle operators from using technology to fight it. When or if NITEL finally dies, its death may not be because of the GSM companies but due to a technology called VOIP.

With such profound effect on the way we communicate, there has been a raging debate on whether NCC should regulate VOIP and if possible licence operators. There are those who have argued on the need for NCC to regulate it to ensure that operators follow some guidelines to protect the investment made by competing technologies. There are also those who argue that VOIP is a technology just like TDM and existing operators have the right to use any technology they see fit and VOIP was only one of such technologies. To understand the issues fully, let me explain the various applications of the VoIP technology. From the consumer point of view, VOIP is that system that allows you to make calls almost free to anywhere in the world. At the moment, this is available to the masses only through the Cybercafés. In large companies where there is broadband access, VOIP is also available as it rides on the broadband network.

Companies with large branch networks also implement VOIP to allow them make free calls within their network. Calling card operators use VOIP to allow users make mostly international calls with any available phone, while incurring in addition local changes on the phone used. The PTO on their own implement VOIP to enable subscribers on their network to make international and trunk calls at reasonable prices, though more expensive than what obtains in the cybercaféés. So, whoever is the user of VOIP, one common factor here is that the consumer makes calls at substantially reduced rates.

For a 3rd world country like Nigeria, cheaper communication within the country and outside is a strong factor in growing our economy to catch up with the rest of society. VoIP therefore is a technology that gives us a chance to leap into the current technology that is being implemented worldwide without going through the long transition in the developed world with their very developed and existing TDM infrastructure. There is no classified definition of VOIP. However, Voice Over IP is a technology that allows you to carry voice traffic on a data network. Long ago, the modem technology allowed voice networks to carry data traffic. What we have today is a reversal of technology that allows data networks to carry voice traffic.

Was there a clamor before to licence data networks running on voice infrastructure? I am not aware of this. So why are we clamoring to licence a data network that wants to carry voice as an application? This clamor to licence or regulate is based fundamentally on our understanding of technology. The internet revolution is still shaking out the way technology is used by humanity and voice technology as it was known is becoming a casualty of technology. Voice, while still a dominant application is gradually being supplanted by data. When we are building our national technology infrastructure today, the dominant consideration will not be to use it to carry voice traffic but to make it data ready as this is the way of the future.

Voice will only ride on this data infrastructure just like email, SMS, video etc. If we are licensing VOIP, we may at one point also consider doing the same for SMS, instant messaging, picture messaging etc. On IP networks, these are all treated like voice traffic. Our mindset today however is to see voice as the dominant application upon which the telecommunication infrastructure is built. While this may be so in Nigeria for today, the developed world is moving away from this and we may just see this as an opportunity to join the rest of the world. So what should NCC do? I believe NCC should acknowledge VOIP as a technology that holds a lot of promise in our quest to develop urgently our technology infrastructure. NCC should see it as a duty to ensure that operators who want to deploy VOIP do so for the ultimate benefit of the consumers.

If this means very reduced calls as we have already seen, better. NCC should infact encourage operators to expand their VOIP infrastructure to enable them develop a national VOIP infrastructure instead of what we have now that targets international operations only. This will allow operators to offer flat national calls without any trunk charges. The current telecommunication players should see it as a technology that allows them to deliver service to their customers at a cheaper price. And they should jump into the bandwagon and allow customers benefit from the technology or risk going the way of NITEL. NCC should therefore draw up a guideline and a time frame to make VOIP available as a national infrastructure. It should then work with PTOs to make this possible in the shortest possible time.

However, if there is need to license additional PTOs to take advantage of this technology; this should be done without preventing present PTOs from freely using the technology. It will be counter productive for NCC to unduly regulate a technology it cannot control. I doubt if NCC has achieved anything when it tried to licence the WIFI technology. By licensing FWAs on 3.5 GHz, NCC tried to remove those who were operating on the 2.4GHzand 5.8Ghz spectrum. This only achieved a stifling of the internet availability it was trying to achieve. Which FWA operator has given us mass oriented internet technology almost 3 years after their licensing? And what would happen to the operators when WIMAX comes? NCC is not supposed to licence technology like GSM,WIFI, WIMAX or VOIP.

I once heard NCC Vice chairman, Mr. Ndukwe say that during the GSM auction, it was not meant to be a GSM licensing as the operators had a choice on whether to use GSM or CDMA. That we ended up with the GSM technology was just a coincidence. And I doubt if despite the GSM hype, we would not have achieved a better telecommunication infrastructure if companies like Intercellular, Multilinks and co had had the guts to roll out nationwide CDMA infrastructure. It is scandalous that while technology like CDMA allows us to make cellular calls at =N6 per minute, we are thanking the GSM companies for reducing their call rates to =N20 per minute. NCC should never licence a technology.

They should sell any available spectrum and allow operators to use the best technology available to provide service within that spectrum. That way, hotshot technologies will be implemented by existing or new operators as they become available without waiting for a statement from NCC .This will allow operators to deploy such technologies like WIFI, WIMAX and VOIP as soon as it makes financial sense and the technology can be implemented within the frequency licence allocated to them.

Mr Onuegbu , an Information Technology expert, is the MD, Signal Alliance Group based in Lagos

By:

Collins Onuegbu 

Collins Onuegbu is an Information and Communications Technology specialist with expertise in various areas of ICT. He is Managing Director of Signal Alliance Group, a leading Service provider in Nigeria. Drop him a line.

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