New Regulations for OTT Providers

New Regulations for OTT Providers

The European Commission is set to announce stricter regulations for over-the-top (OTT) VoIP providers. Until now, applications such as Viber, Skype and WhatsApp have been able to offer consumers free calling and messaging services via the internet with very little restriction and regulation compared to traditional telecoms companies.

However, these OTT providers are also able to use the pre-existing networks to terminate and deliver calls within their own applications, bypassing traditional distribution methods and taking revenue away from the network operators. Whilst OTT to OTT calls are seen as fair competition to the networks, the use of OTT applications to hijack traditional voice calls has been a source of contention for operators.

According to regulatory body Ofcom, the popularity of OTT applications has increased significantly. Its recent 2016 Communications Market Report states the number of people using instant messaging applications has almost doubled—increasing from 28 per cent in 2015 to 43 per cent in 2016. During the same period, traditional modes of communication—such as email and SMS—have seen a decline in consumer use, falling 7 and 8 per cent respectively.

This trend has had a damaging effect on the revenues of telecoms providers. Research firm Ovum predicts the telecommunications industry will lose $386 billion in revenue by 2018, solely as a result of customers using OTT VoIP applications. The recent decline in revenues has meant that there is less urgency for operators to invest in improving their network infrastructure, as this will only further benefit OTT providers.

A long-term lack of investment in network infrastructure will ultimately have a detrimental impact on call quality for end users, highlighting the need for change. With the latest figures estimating that the numbers of consumers using a smartphone for communications is set to rise from less than 10 per cent in 2011 to more than 36 per cent by 2018, the issues that arise from OTT delivery are set to get worse.

In Europe, telecoms companies have long been lobbying for a significant update to the regulations. Last year, a group of operators that included Orange, Telefonica and Deutsche Telekom wrote to the EU Commission complaining that OTT providers had an unfair advantage—despite offering the same services to consumers, companies like Facebook’s WhatsApp were not being made to adhere to the same regulations as traditional telecoms providers.

French telecoms regulator Arcep will decide in September whether to force companies like Skype and Viber to register as telecoms providers—taking away any perceived advantage. With the UK’s exit from the European Union yet to be formally implemented, any immediate change to EU regulation will still take effect. The scale of the changes and the impact these will have on the telecommunications market are yet to be seen.

In the meantime, Revector’s OTT detection and elimination service is the only fully tested and proven OTT service on the market. It is able to identify and stop OTT hijacking and monitor OTT threats in real-time, ensuring network operators receive the revenues they are due.

New Regulations for OTT Providers