Legacy telcos make peace with Internet services in Africa

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Companies providing audiovisual content and apps over the Internet are becoming increasingly influential in Africa, to the point where traditional telecom operators are essentially being forced to accommodate them.

A growing number of telecom company executives themselves believe that so-called over-the-top (OTT) service providers, delivering apps and multimedia content over the Web, will only increase in influence, according to an Ovum survey.

The Digital Africa survey, presented at Ovum’s recent Connecting West Africa conference in Dakar, found that 35 percent of telecom company executives polled believed that OTT service providers will be very important in five years, compared to only 18 percent who think that they are very influential today.

“Operators see their role evolving to providing access to their networks to both customers and content providers, which include OTTs,” noted Ovum senior analyst for Africa Thecla Mbongue, in email.

Meanwhile, some telecom executives apparently have come to believe that their own influence is waning: The Ovum survey shows that only 56 percent of those polled believe that telecom operators will be very important in five years; that’s down from 65 percent who believe they are very important now.

The telecom executives are facing a changing reality. OTT services have changed how data is being consumed, either through converged multimedia services such as high definition video and audio, social platforms such as Facebook and Twitter, and high data-volume services like Whatsapp and Viber. These services have become popular with little or no control from operators.

This realization, according to some industry experts, made African telcos initially resist the use of their networks for OTT services. The resistance, however, failed to make any significant impact and succeeded in alienating the OTT service providers.

Some major telcos in Africa now say they have embraced and have been seeking ways to monetize OTT services. Airtel Africa CEO Christian de Faria has said telcos do not need to block or throttle OTT services as “they are here to stay” and “the consumer wants the product.”

MTN South Africa CEO Ahmad Farroukh has said that now is the time to work out how to cooperate better, to benefit both the OTT provider and the operator.

The Ovum survey also noted that device manufacturers, media companies, IT companies and equipment vendors are also expected to become more important across the continent and that those polled also believe smartphone uptake will continue to rise in the next five years.

Ovum attributes the uptake of smartphones across West Africa last year to, among other things, the decline in handsets prices, segmented price plans and declining data tariffs.

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