Jidaw Systems

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.


VOIP Nigeria

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.

To regulate 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 cybercafés. So, whoever is the user of VOIP, one common factor here is that the consumer makes calls at substantially reduced rates.


VOIP Impact

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.


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.

Learn More about Voice Over Internet Protocol (VOIP)


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September 14, 2005


Chioma from Onitsha says:


Great and insightful article. NCC should get its act together.  Regulation is good, But over regulation doesn't help.  



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