iGmena Hangout: Voice over Internet Protocol (VoIP) vs. Mobile Networks: Disruptive Threat or Innovative Opportunity?  

February 15, 2016

The first IGMENA Google Hangout of 2016 addressed the topic of “Voice over Internet Protocol (VoIP) vs. Mobile Networks: Disruptive Threat or Innovative Opportunity?” The debate was moderated by Mr. Hamza Ben Mehrez, the Policy Analyst Lead at IGMENA. The participants in this debate were:
  • Mr. Walid Al Chennoufi, Digital Security Coordinator, AccessNow Tunisia
  • Mr. Amin Jobran, Outreach Manager, ASL 19, Lebanon
  • Mr. Mahmoud El Banhawi, Freedom of Information Program Manager, SITC, Egypt
  • Mr. Hamza Salem, Junior Developer at Echo Technology and SharePoint Developer, Microsoft Innovation Center, Jordan
  • Ms. Houda Bel Kassem, Adjunct Professor and IT engineer, Morocco
To open this discussion, Hamza Ben Mehrez asked participants to reflect on the characteristics, trends, and growth of VoIP players in their countries.
Amin Jobran mentioned that blocking VoIP services is becoming more prevalent in many Arab countries. It is in large part for economic reasons, although governments have tried to justify it on national security grounds. In the Gulf countries, Viber is blocked in Saudi Arabia, while in the UAE, VoIP licenses are given to the telecom companies and some Skype services, Tango, Whatsapp calling, and Viber are blocked, and moreover Apple sells its iPhone devices without the Facetime feature. VoIP services are seen as telecom services and thus fall under the Emirati telecom regulation law, which is 15 years old and states: “Only the licensees can provide telecommunication services in UAE, including VoIP services.” Oman, Kuwait, and Qatar also block VoIP services.
Houda Bel Kassen mentioned that just recently, the three Moroccan telecom companies (Maroc Telecom, Meditel, and Inwi), shut off access to VoIP on Skype, Viber, Whatsapp, and Facebook Messenger. The National Telecommunications Regulatory Agency (the public body responsible for control and regulation of the telecom sector in Morocco, implementing and sustaining conditions for fair competition in telecom markets, and helping to establish a legal environment) justified the blocks by claiming that the services violate Moroccan regulations, and the three companies have the right to shut down any service they want, for financial or commercial reasons.
According to Walid Al Chennoufi, the telecom companies Oreedo (Previously known as Tunisiana), Tunisie Telecom (TT), and Orange, as well as government agencies such as ATI (the Tunisian Internet Agency), INT (the National Telecommunications Authority) had a blockage of VoIP prior to the 2010 revolution. The block had a very negative effect on Tunisian companies. The telecom companies announced that there would be restrictions in 2014. It was relayed massively in the news. A lot of opposition resulted from that. INT and the ODC (Consumer Defense Organization) said that any blocking would be illegal. The pressure on the telecom companies was maintained and finally, one representative of TT denied the possibility of a future blocking of VoIP services.
Mahmoud El Banhaoui mentioned that Egypt is the largest market in the region, with an oversaturated mobile market of 101% subscription rate; the majority of them use smartphones, and hence VoIP applications. About 10% of Egyptians are living abroad, so around eight million people are directly benefiting from VoIP to communicate with their relatives living in Egypt. As for the stakeholders, the government exclusively dominates the formation of the national regulator and owns 80% of the national telecommunication company (TelecomEgypt).
Mahmoud added that the national company has the exclusive right to build and operate Internet infrastructure. TEdata, a child company of TelecomEgypt, is the biggest Internet provider. TelecomEgypt also owns 40% of Vodafone Egypt, the mobile operator with the biggest market share. Other mobile operators are Mobinil (owned by Orange, a French company) and Etisalat Egypt (Emirati owned). All mobile operators have their own child companies that are internet service providers (ISPs). The government also runs the international gate for international landline calls, so VoIP usage represents a decrease of income in foreign currency for the government as well. VoIP is banned over 3G on some applications, by a decision from the National Regulator. This was not publicly declared; civil society has tried to get a copy of this administrative decision but to no avail. This decision is being challenged in court as it represents a violation of Internet neutrality.
Are mobile VoIP providers enablers of growth? What are the challenges in VoIP regulatory intervention for state telecom operators and the factors enabling VoIP providers to overcome those challenges?
According to Amin Jobran, any technology that facilitates communication at a lower price is set to contribute positively to GDP. The World Bank estimates a correlation between Internet penetration and rise in GDP. VoIP services do just that – they decrease the direct cost to the consumer and facilitate communication. He added that governments risk losing revenue from taxation since telecom companies are making less profit. In countries like Lebanon, for example, telecommunication is one of the biggest tax generators for the state. Finding solutions to replace this income in the short term for these governments is crucial.
About VoIP growth, Hamza Salem said that telecom companies have control over VoIP service in Jordan, and the environment for VoIP development is not mature enough. How can we unblock this service and get the government to force these companies to release VoIP? He thinks there are many solutions, like protesting against the blocks, raising awareness about VoIP services, or using a VPN to access VoIP services. He thinks that a new business model would resolve that.
Mohamed El Banhaoui said that the improvement of telecom infrastructure in the MENA region is an enabler for economic growth, especially as the MENA region is an attractive location for telecom services being outsourced from Europe. Tunisia is now trying to attract those investments, and, generally speaking, the ban on VoIP is not helping with that.
According to Walid Al Chennoufi, Tunis is known as one of the top 10 cities in the world to launch startups. The government is making huge efforts to strengthen economic growth via technology. Currently, Tunisia is building its fiber-optic infrastructure and extending 3G / 4G service to make it accessible even in rural areas. A recent initiative called MDev was launched in order to push youth from all over the country to use mobile development and make income from it. Concerning VoIP, a lot of companies implanted in Tunisia are using VoIP for their communication. Blocking VoIP would be very harmful for them.
Walid added that there is a fundamental need to find solutions for a telecom companies to remain viable. They know how to make a profit, but they tend unfortunately to choose the easiest solution, which is to block VoIP and make people pay for services that they already paid for. He continues to say, “We are here watching in order to make the government comply with digital human rights.”
What is the Network Neutrality of telecom companies and regulatory attitudes towards mobile VoIP?
Amin Jobran said, “For people who have no Internet in the first place, the idea of net neutrality is not exactly on top of their mind. Getting online cheaply in the first place is a greater concern. Internet access is expensive in developing countries—exorbitantly so for the vast majority of people.” This is the case in much of the Arab world, except for oil-rich Gulf countries, where Internet penetration reaches more than 90% in UAE and Bahrain. And we will not see any discussion of net neutrality going on in those countries any time soon, with a horrible record in freedom of expression online and offline.
Civil society should be vibrant enough to push for net neutrality. We have seen that in Morocco, consumers and civil society alike forced telecom companies to rescind their decisions. According to Houda Bel Kassem, Moroccan end users all knew that the VoIP is the worst nightmare of traditional telecom companies, is probably the strongest disruptive force, incorporating various applications. The high cost of voice calls has motivated new players to discover ways to market by providing value beyond lower and free cost services. This has led to increased consumer demand.
At the same time, VoIP providers can use these partnerships as an occasion to monetize their user base, and accelerate the number of VoIP users. VoIP providers will continue to expand by using clever functionality, convenience, and improved customer value beyond price. As smartphone and mobile broadband infiltration are expected to increase, the VoIP providers become considerable enablers for growth potential when they offer adequate voice quality and find suitable ways to monetize their user base. Investors’ appetite for the industry improves along with the overall economy. Regulators’ attitudes will change depending on the stage of evolution in the country; they must make sure to encourage openness and lack of discrimination of the industry in their attempts to foster and ensure net neutrality.
Walid Al Chennoufi added that the regulatory framework is governed by the national regulator, which is constituted by governmental representatives. The state also owns the biggest market share in telecom, so there is not a regulatory independence on which we can rely. The VoIP ban is only applied on 3G networks and was initiated by the national regulator. Is there a conflict of interest? We don’t know. Why is VoIP banned over some selected applications and not over others? The regulatory environment needs to be more transparent to be able to tackle these challenges, among others. As Al Chennoufi points out, “Maybe it is not our responsibility to find a business model, but we have to engage more parties in a market characterized by monopoly and open up the conversation. Opening the Internet enables the public to reinforce other kinds of rights: political, economic, and societal. That is our role.”
What are the issues for consultation of telecom operators to adjust their strategy to a world of VoIP presence?
According to Amin Jobran, some telecom operators find innovative ways to make a profit. In the Netherlands for example, telecom companies raised data charges, which did not decrease Internet consumption. Consumers were willing to pay more for data in an Internet market where demand is increasingly becoming inelastic. This has to be done carefully, taking into consideration affordability for the consumer. The cost of an Internet connection as a percentage of household disposable income is high in many countries where there is striking poverty, and this is where VoIP services come in to switch the burden from all parties to provide the poorer part of the population with inexpensive means of communication, which is crucial in these economies and allows for economic and social mobility. Finding other ways to gain revenue other than blocking VoIP is necessary for telecom companies in these markets, to get people to use their voice plans and services, for example talking with different VoIP providers, licensing them, and making them pay for the license.
What are the policy recommendations for a secure deployment of VoIP?
Houda Belkassem said that first, telecom companies must prepare their strategies carefully to foster business models and deliver a competitive advantage by inviting stakeholders to take part in discussions to develop global strategies. By authorizing more competition and local alternatives without violating users’ rights as well as maintaining the telecom sector by keeping it attractive with high return on investment for telecom companies, this policy will help to invest in more and improved services and build a brand. Secondly, they must develop a wide and powerful user base while players have a considerable number of registered users. Thirdly, VoIP providers will gain from collaboration with operators, offering access to operators’ user base and high quality network services, and help challengers strengthen their market positioning with a competitive price.
Hamza Salem said that for telecom companies, the most important issue of VoIP is identity. They lose the ability to track who is calling and therefore monetize it. He suggested that we can solve this problem by registering any app that uses VoIP with each user’s national number.
Mahmoud El Banhaoui mentioned that Internet governance should be an open process. The main problem is that the status quo does not benefit from opening the discussion. We need to engage more parties and address the needs of end users. There is a growing market for start-ups and companies relying on the Internet and the opportunities it provides. Those stakeholders need to be brought to the table.
According to Walid Al Chennoufi, we should use open-source VoIP solutions, as end users don't really know what happens with proprietary and closed code source. The use of a virtual private network (VPN) is a solution, but not everyone has the technical knowledge to use a VPN. It was used a lot before the Tunisian revolution by activists, but not everyone was able to use this technology effectively. Government and private sector actors should be brought onto the same page. However, there is a lack of civil society inclusion into reforms and discussions. Tunisia has a newly drafted constitution; however, old legislation needs to be updated to accommodate basic human rights. Civil society should play the role of watchdog and should be mindful about data privacy and surveillance. 
Conversation summarized by:
Hamza Ben Mehrez, Policy Analyst Lead (IGMENA)