Telcos block Skype over revenue loss on international calls

Ben Uzor Jr

Concerns over revenue loss from international calls may have compelled some telecommunications firms in Nigeria's highly competitive market to block subscriber from accessing Skype services on mobile, Benuzorreports has gathered. Skype is a proprietary Voice Over Internet Protocol (VoIP) software for calling other people on their computers or mobile phones. It was learnt that phone calls using Skype software can be placed to recipients on the traditional telephone networks. Moreover, calls to other users within the Skype service are free-of-charge, while calls to landlines and phones though reasonably priced are charged via a debit-based user account system.

"Generally, the main fear of the telecoms operators here will be that customers will increasingly use Skype as a substitute for conventional international calls", said Mattew Reed, principal analysts at Informa Telecoms and Media. Sources close to some networks told Benuzorreports, that international calls make up a critical part of telecoms operators' revenue because of Nigeria's large expatriate and Diaspora population. This apprehension, according to analysts is further exacerbated by the steep decline in voice revenue. Last year, mobile networks were over exuberant, giving away lots of free minutes which market analyst say has taken away a lot of value from the industry. 

In the new business year, mobile operators are looking offset the fallout of intense competition by closing gaps in the business that spurs revenue leakage. Operators have however refuted the allegation of blocking Skype on mobile. "It is impossible", Wale Goodluck, corporate services executive, MTN Nigeria puts it succinctly. Our reporter sought the view of the telecoms regulators on the issue. "We don't have any evidence of that. We do no regulate the internet", Tony Ojobo, director, public affairs of Nigeria Commission Commission (NCC) told Benuzorreports. "I am not aware of this development but globally operators and network equipment makers don't really embrace Skype. 

"They liken Skype to an individual who takes undue advantage of other people's generosity without giving anything in return. Globally, there is this apprehension amongsts telecoms operators that Skype only steals their customers while they invest billions of dollars to build out, expand and upgrade networks", Kenneth Omeruo, managing director, TechTrends Nigeria, told Benuzorreports. In the United Arab Emirate (UAE), Etisalat and Du had recently lifted a ban on Skype services. Both telecoms companies had announced that telecoms user can now download the application online and make Sykpe-to-landline or mobile calls, which were not previously permitted. 

Many telecoms operators worldwide – including some companies in the United States (US), the United Kingdom (UK) France and Spain – prohibit their mobile phone customers from downloading Skype’s software or outlaw the use of voice over the internet phone services in their standard sales contracts.  Other carriers have imposed fees to undermine Skype’s attraction. Moreover, barriers to Skype software and similar Internet calling services are coming under increasing scrutiny as the internet goes mobile. By 2013, the number of internet-ready mobile phones will surpass the number of computers in the world for the first time, according to Gartner, a research firm.