Blackberry would have solved the Telcos Vs. Over-the-top service Situation

Its no longer news. Every single day, regulators are looking to regulate over-the-top services for what they feel is unfair competition against telcos.

The Nigeria Communications Commission is the latest to throw a spanner in the works. In its report titled An overview of provision of over-the-top services, the language points towards possible regulation. A section of the report states
Over-the-top (OTT) services are services carried over the networks, delivering value to customers, but without any carrier service provider being involved in planning, selling, provisioning, or servicing them, thereby implying that traditional telcos cannot directly earn revenue from such services. Brace yourselves Nigerians.

In South Africa, a similar argument was posted in South Africa by the two largest carriers MTN and Vodacom. This led to public outrage under #SaveWhatsApp after the Parliamentary Portfolio Committee on Telecommunications called for hearings to determine the licensing and regulatory obligations of Over-the-top services, impact on competition as well as policy and regulatory interventions.

The BlackBerry Connection

Telcos are late! The regulators are late! I understand the revenue implications on companies as well as fiscal implications, when a select number of companies are reaping Billions of dollars, paying pennies in taxes where they operate and investing little or nothing in infrastructure.

However, this problem would have been solved by pioneers of over-the-top services. Blackberry. Blackberry created BBM in 2005, a service that allowed users to communicate via PINs and grew incredibly popular. It was reliable, free, always on and users could send as many messages as they wanted at no extra cost, unlike basic text messages. PINs were random codes, not phone numbers or e-mail addresses, enhancing privacy according to Global and Mail.

In 2010, one of BlackBerry’s co-founders had a brilliant idea. Why not allow telcos to offer BBM to all their customers regardless of platform? The plan was to offer BBM as an enhanced version of SMS. The telcos would then charge their customers and then give BlackBerry then called Research in Motion (RIM) their cut. The service would be offered as part of a standard “talk and text” plan for entry-level smartphone users or as a bundled product including BBM, one GB of cloud storage for photos and music. Blackberry pitched the idea to 12 of the largest telcos in the world in 2011 and there was belief that AT&T, Telefonica and one or two other European carriers were interested. Unfortunately Blackberry killed the idea ushering in the quagmire telcos, regulators and providers of OTT currently face.

If this would have worked out, it would have made BBM into hundreds of millions of users all over the world ushering the SMS 2.0 era and would have created a model through which telcos and providers of over-the-top services would share revenue. It would have made it easy to roll-out OTT services for enterprise (something OTT services from WhatsApp, BBM are grappling with).

Instead? We have a situation where industry regulators have no idea how to regulate these insanely popular services. A situation where the masses do not want their governments near these services and anything close is deemed as censorship. A situation where telcos are struggling with declining average revenues per user with no idea of how to grow it. A situation where OTT providers are generating Billions but paying 4,000 pounds in taxes (Facebook in the UK). Its a crazy situation.

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They lost their match!

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I don’t understand how telcos would complain. They lost SMS revenue but gained data revenue. To me, it’s still a win for them.

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