Nigerian Communications Commission Declines Regulation of OTT Services; Telecom Sector Contributes $5 Billion to GDP

In the face of growing digital technology, the Nigerian Communications Commission (NCC) debunked the news about potential interference with Over-The-Top (OTT) services in Nigeria. This surprising revelation came during a series of public announcements made by the Commission.

Earlier this year, speculation arose that the NCC had plans to regulate OTT services, such as WhatsApp, Skype, and Facebook Messenger. The widespread news fueled uncertainty among several technology companies and digital users in Nigeria.

However, in a twist of events, the NCC assured the public that they have no plans to regulate these valuable services. They recognized the prominent role these digital apps, serving as alternatives to conventional telephony, have in bolstering communication on a global scale. For instance, platforms like Facebook Messenger and WhatsApp, both owned by Facebook, already process about 60 billion messages daily as compared to 20 billion SMS messages processed globally each day.

Considering the popularity and the value of such services, more Nigerian platforms are entering the digital scene. Similar to the global trend, WeChat and Snapchat are gaining traction in Nigeria, with active users growing rapidly. Furthermore, there are now an estimated 14 million Nigerians using Messenger for a variety of applications, such as messaging, voice and video calls.

The impact of digital platforms extends beyond profound communication experience. Several platforms like Skype offer complementary solutions to traditional phone services over Public Switched Telephone Networks (PSTN). This rapid shift to the world of apps hasn’t deterred Nigerian telecom companies. On the contrary, they’re capitalizing on the increased reliance on these digital platforms by offering data plans that grant users access to these services.

This strategic move pays off as many Nigerian telecom companies continue to declare significant revenues, even in the face of current economic conditions. It remains business as usual for these services unless we gather credible reports to suggest otherwise.

Another notable announcement from NCC hints at the major role the telecom sector plays in Nigeria’s economy. It was broadcasted that the Telecom sector has contributed about 1.5 trillion Naira ($5 billion, using Central Bank of Nigeria’s Nairabot rate) to the national GDP, an increase from the preceding quarter.

Despite the heavy contributions of the Telecom sector, there are ongoing proposals for a 9 percent tax on telecom services, which include voice calls. This would be an additional burden considering Nigerians already pay a 5 percent Value Added Tax (VAT) each time they recharge their call credits.