The use of Voice over Internet Protocol ("VoIP") enabled Apps and devices as a communication tool by both organisations and individuals has been on the steady increase, particularly in the wake of the COVID-19 pandemic ("the Pandemic"). The imposition of lockdown measures and movement restrictions have had the domino effect of forcing organisations and individuals to work, learn, and socialise remotely, thus increasing the use of the Internet. VoIP is widely regarded as a disruptive technology that has affected the pricing fundamentals of the telecommunications industry.
The Nigerian Communications Commission ("NCC") is empowered by the Nigerian Communications Act 2003 to issue communications licences, for the operation of communication services, and to determine the terms and conditions for eligibility and ownership of such licenses in Nigeria. In furtherance of this power, the NCC issued the Guidelines on International Gateway Access and Voice over Internet Protocol ("the Guidelines"), which provide for the operation of International Data Access Gateway ("IDA Gateway") licences and Full Gateway licences.
In this article, I will take a look at the rise of VoIP, how it is disrupting the telecommunications industry, and the key provisions of the Guidelines as it relates to VoIP in Nigeria.
Technically speaking, VoIP, sometimes referred to as Internet Protocol ("IP") Telephony, is the real-time transmission of voice signals using the IP over the public Internet or a private data network. In ordinary parlance, VoIP is a technology that enables internet-based telephone calls, instead of analogue telephone lines, with the use of software applications (Apps).1 This includes regular voice or video calls over WhatsApp, webinars via Zoom or business calls via Microsoft Teams. In essence, VoIP converts voice signals from devices into a digital signal that travels over the Internet.
According to the BBC, the Zoom App counted more than 300 million daily participants in virtual meetings with a speculated sale as high as $1.8billion (One Billion, Eight Hundred Million Dollars) in the first half of 2020.2 Also, as analysed earlier this year, the statistics of minutes spent on WhatsApp voice and video calls per day is about two (2) billion.3 In addition to this, it was reported by Facebook in March 2020 that the use of voice and video calling features of Facebook Messenger and WhatsApp has 'more than doubled' in places hit hardest by the Pandemic.4 WhatsApp was also reported as the second most downloaded App in India, next to the popular short videos App, Tiktok in March and April, while the country was on lockdown due to the Pandemic.5 Perhaps as a means of leveraging on the situation, WhatsApp recently announced an upgrade to its features to enable voice and video calls by members of a small group, using a dedicated button.6
According to the latest industry statistics by the NCC, the number of internet users in Nigeria as at the end of May 2020 totalled 141.16 million.7 From the breakdown, Mobile Network Operators ("MNOs") dominated the market with about 140.76 million users on their networks.8 The users of these networks would of course include users of VoIP enabled Apps, which have become a common communication tool in this present day. Following the MNOs closely are the local VoIP operators with about 386,509 users on their network.9
The minimal cost of internet-based calls, when compared to calls using the mobile telephone networks, has led to a gradual shift from the dependence of traditional telephony to an increase in demand for voice and video calls using VoIP. This new era operates via platforms like WhatsApp, Zoom, Facebook Messenger, Imo and Microsoft Teams and is used by both individuals and business owners. Typically, the cost of internet-based calls would be no more than payment made to the Internet service provider in the form of data subscription, the purchase price of the hardware for making VoIP calls, or a subscription fee for the use of the Apps. VoIP systems also offer unified communications as a system. For example, WhatsApp enables the user to effectively use instant messaging, voice call, multimedia sharing and video conferencing features using one system.10
Disruptions caused by the rise of VoIP
The disruption of the telecommunication space by the use of VoIP has far reaching effects on the business of traditional telecommunications companies ("Telcos"). There is an industry-led gradual shift in the United Kingdom, with many companies withdrawing their products that rely on Public Switch Telephone Network ("PSTN").11 There is also a continual increase in the use of VoIP in Nigeria.12 The migration is also seen as necessary to ensure the continued provision of reliable landline telephone services given that PSTN can no longer be sustained in the long term.13
Unlike the circuit-switching mechanism used in traditional PSTN, VoIP makes use of packet switch networks, which compresses the caller's voice signals into packets (more like internet envelopes) and then transfers it through the Internet Protocol ("IP") network to the receiving device.14 A VoIP phone call transfers data from one computer system to another and dismantles the voice message into data packets that may run along disparate routes before being put back together at their terminating destination.15 Essentially, the audio is digitised and broken down into packets, the packets travel over the internet to the recipient and the packet is thereafter decoded and reassembled.
Conversely, PSTN used by traditional Mobile Network Operators ("MNOs") such as MTN, Airtel, Etisalat and Globacom involves the use of electric signals, a mix of copper telephone lines, fibre optic cables, switching centres, cellular networks and undersea cables.16 Here, a call is made after being routed through multiple switches and networks, particularly where it is long distance. The advantages of the VoIP over PSTN include lower network infrastructure costs, portability and scalability, customised internal communications, unified communications and App integrations.
Indeed with the rise of VoIP it has been predicted that PSTN may be entirely displaced by VoIP in the coming years.17 Telcos have therefore taken more steps to maintain their relevance by structuring their businesses to focus more on offering data subscription plans to consumers.
VoIP Technology in Nigeria.
The VoIP market in the telecommunications space is growing at a nimble rate precipitating a decline in the profits made by the local telecommunication company and by implication a threat to their commercial survival.18 The trend in Nigeria started with an offer of cheap international calls to consumers by cyber cafés as opposed to the international tariff of mobile network providers.19 The VoIP market has continued to grow, with the number of consumers in Nigeria steadily increasing.20
The VoIP regime in Nigeria pursuant to the Guidelines
The Guidelines recognise two categories of operators of VoIP services: existing operators and new operators.
- Existing operators are organisations with private national networks which are permitted under the Guidelines to implement VoIP over such networks without obtaining a licence.21 The Guidelines specifically make reference to Digital Mobile License ("DML") Operators and Very Small Aperture Terminal ("V-SAT") License Operators as existing operators.22
- DML Operators are operators licensed by the NCC to operate and provide digital mobile services, such as MNOs i.e. 9mobile, MTN, Airtel, and Globacom. Operators with existing DML are permitted to carry only traffic generated from their own networks.23 A DML Operator desirous of carrying third party traffic (traffic generated from other networks) can only do so by applying for a gateway license to reflect its new status as an operator with international access authorisation.24
- V-SATs are satellites used to transmit narrowband data (e.g. point-of-sale transactions using credit cards, polling or RFID data) or broadband data (for the provision of satellite internet access to remote locations, VoIP or video) and also transportable, on-the-move or mobile maritime communications.25 They give complete control over their own communication infrastructure to companies, thus removing dependence on third party sources.26 The use of VoIP over V-SAT can; however, be limiting and many organisations are beginning to switch from the use of V-SAT. The NCC previously issued licences to operators27 to provide and operate private network links using satellite (V-SAT). However, in a bid to upgrade the nature of services offered by operators within the industry, the NCC no longer issues any V-SAT licences (domestic/international).
- New Operators: As opposed to the regime for existing operators, an intending operator can either obtain an IDA Gateway licence, a Full Gateway licence or subscribe to the services of a licensed operator. Additionally, Special IDA permits (a third kind of licence) may be issued to international and multinational organisations in limited circumstances. Holders of a gateway licence have the right (though not mandatory) and may choose to interconnect to the PSTN.
- An IDA Gateway licence is defined in the Guidelines as a soft switch that performs interface functions for the purpose of linking data networks in Nigeria to the global internet highway or other managed IP-based international networks.28 IDA gateway licensees are authorised to deploy any transmission media such as V-SAT, fibre, microwave, coaxial cable etc.29 The licensees are also authorized to provide bandwidth in small units to smaller operators such as cybercafés and small Internet Service Providers (ISPs).30
- In relation, the Full Gateway license is viewed as an interface switch with its associated equipment, which can be used to link a telecommunication network in Nigeria with those of other countries.31 The NCC seldom grants the Full Gateway Licence because of the limited number of signalling point codes assignable under the International Telecommunications Union ("ITU") recommendations.32 A signalling point code is simply a network protocol that provides control for telecommunications network through the creation and transfer of tasks such as call processing, network management and maintenance to various network components.33 A Full Gateway Licensee is assigned an international signalling point code and would continue to enjoy the ability to transmit direct voice signals and deploy time division multiplexing (a communication process that transmits two or more digital signals or analogue signals over a common channel on a time sharing basis)34 and IP transport protocols.
- The third type of license introduced by the Guidelines for new operators is the "Special IDA Permits". This permit is issued to international organisations, non-governmental organisations and multi-national organisations. International organisations to which Nigeria belongs may be granted this licence upon inspection, type approval and monitoring of their equipment by the NCC. It should be noted that such permit does not extend to third party traffic (voice or data).
VoIP technology has, without a doubt, come to stay and is fast becoming an integral part of world communication at all levels. Its possibilities abound as reflected in the interaction between VoIP and Internet of Things ("IoT"). With VoIP, it is possible to give commands to an air conditioner in your apartment while working several miles away at the office. You can also order your sprinkler system to water your garden at intervals while you are away from the house. Furthermore, some predicted trends of VoIP include the growing impact that the combination of big data and artificial intelligence to deliver real-time business intelligence, predictive analytics and machine learning would have on VoIP. VoIP technology would be used to manage hardware and intelligent systems via voice commands for processes such as building automation and supply chain management
The NCC has made some laudable efforts by having the Guidelines and creating a structure for the regulation of VoIP. However, it is apparent that some provisions of the Guidelines are vague in some instances and are also not comprehensive enough to cover all the bases. They are far from comprehensive and have left many things uncovered as they only provide for the basics in relation to obtaining the licences and nothing more. Issues like the quality of service standards, consumer protection, data protection and privacy in relation to use of VoIP have been left uncovered. This choice may perhaps have been premised on the arguments on net neutrality and whether Internet access should be regulated like phone services.
Nevertheless, the possibilities that exist with VoIP will have an indelible impact on the telecommunications industry. As such, the NCC and all stakeholders need to be alive to the realities of VoIP and create a more robust and inclusive framework for its regulation in Nigeria.
1 Alexandra Twin, "Voice over Internet Protocol (VoIP) " 2020 available at https://www.investopedia.com/terms/v/voiceoverinternet-protocol-voip.asp#
2 N. Sherman, BBC Business News (02 June 2020), available at https://www.bbc.com/news/amp/business-52884782
3 M. Iqbal, "Whatsapp Revenue Usage Statistics (2020)" Business of Apps, updated 23 June 2020.
4 A. Schultz & J. Parikh, "Keeping Our Services Stable and Reliable During the Covid-19 Outbreak", Facebook News (24 March 2020)
5 India TV Tech Desk, New Delhi, (06 April 2020, 18:26 IST), available at https://www.indiatvnews.com/amp/technology/apps-tiktok-becomes-most-downloaded-app
6 News 18 Live TV, (09 April 2020, 14:39 IST), available at https://www.news18.com/amp/news/tech/whatsapp-makes-voice-and-video-calls-easier-within-groups-amid-covid-19-lockdown-2570787.html
7 Nigerian Communications Commission Industry Statistics, last update: 30 June, 2020, available at https://www.ncc.gov.ng/stakeholder/statistics-reports/industry-overview#view-graphs-tables-6
10 Features of WhatsApp by Facebook, available at https://www.whatsapp.com/features/
11 "The Future of Fixed Telephone Services"- Policy positioning statement of the Office of Communications, UK 22 February 2019.
12 Supra note 7..
13 Supra note 11
14 L. Schessel," Voice and Data Network Integration", Auerbach Publications 1999; ,D. Clifford, "VoIP:The Complete Beginner's Guide" Broadband Choices, 09 January 2020 available at https://www.broadbandchoices.co.uk/guides/internet/internet-phone-voip-offers
15 White, Curt M, "Data Communications and Com puter Networks" Boston MA, 6th Edition, 2011. .
16 M. Rouse, "PSTN (Public Switched Telephone Network) WhatIs.Com, 22 May 2019 available at https://searchnetworking.techtarget.com/definition/PSTN%3famp=1 ;
18 Policy, Competition and Economic Analysis Department, Nigerian Communications Commission, "An Overview of Provision of Over-The-Top OTT Services" available at https://www.ncc.gov.ng/
19 N. Ekekwe & N. Islam, "Disruptive Technologies, Innovation and Global Redesign: Emerging Implications" 2012 IGI Global.
20 E. Ogidiaka & F.N. Ogwueleka, "Over-The_Top Services (OTT) on telecommunication operators in Nigeria: exploring consumers' behavior" IJOIT 12, 437-446 2020
21 Paragraph 6(6) of the Guidelines.
22 Paragraph 6 of the Guidelines.
23 Paragraph 6(1) of the Guidelines.
24 Paragraph 6(2) of the Guidelines
25 "Very-small-aperture terminal" Wikipedia last edited 12 05 2020; 20:53, available at https://en.m.wikipedia.org/wiki/Very-small-aperture_terminal
27 Such as Gilat Telecoms
28 Paragraph 9 of the Guidelines.
29 Paragraph 2(3) of the Guidelines.
30 Paragraph 2(4) of the Guidelines
31 Paragraph 9 of the Guidelines.
32 The ITU is an agency of the United Nations, specialised in the field of telecommunication. The ITU Telecommunication Standardisation Sector ("ITU-T"), in carrying out its responsibility of issuing recommendations with a view to standardizing telecommunication on a worldwide basis issued the "Fundamental Voice Transmission Objectives for VoIP Terminals and Gateways" in 2004, as recommendation on the use of VoIP.
33 "CSP Developer's Guide: Common Channel Signalling" Cantata Technology https://www.dialogic.com/webhelp/csp1010/8.4.1_ipn3/ccs_ss7_chap_-_basics_of_ss7.htm
34 "Time-Division Multiplexing,", Wikepedia 22 June 2020, available at https://en.wikipedia.org/wiki/Time-division_multiplexing#
Originally published 15 July, 2020
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