A controversial proposal by Arab states to force commercial terms between telecoms operators and internet companies was recognised in an international treaty signed last week in Dubai, potentially paving the way for new revenue sharing agreements across the Middle East.
At the highly contentious 12-day World Conference on International Telecommunications (WCIT), Algeria, Bahrain, Iraq, Saudi Arabia and the United Arab Emirates, all argued for greater cooperation between their nation’s telecoms operators and internet companies, otherwise known as over-the-top (OTT) players.
The Arab states called for new regulations to enable commercial agreements to offset the huge levels of spending on network infrastructure and the adverse effect on traditional revenue streams from applications such as Skype and WhatsApp.
“Telecoms operators are generally concerned about the transfer of value away from themselves to OTT players,” said Edwin Grummitt, head of Middle East at Analysys Mason, a telecoms research company. “Operators will reasonably go after any opportunity to get some compensatory value flowing back from OTTs to themselves.”
The conference treaty, which was drawn up by the United Nation’s International Telecommunication Union (ITU), was eventually signed by just 89 countries out of a possible 144 after a US-led coalition refused to agree the new regulations and argued the ITU was the wrong body to govern the Internet.
“Internet policy should not be determined by member states but by citizens, communities, and broader society, and such consultation from the private sector and civil society is paramount,” Terry Kramer, head of the U.S. delegation, said in a statement to the conference on Thursday.
The Internet and commercial agreements between telecoms operators and OTTs were not included in the final draft of guiding regulations, which are binding from 2015 for all states that sign and were last agreed in 1988 before the widespread adoption of the Internet and mobile phones.
But the two issues were raised as non-binding resolutions, which are agreements to explore a proposal further in the future, proving a small coup for the Arab States, as well as Russia, China and the European Telecommunications Networks Operator (ETNO) association that also advocated for change.
“ETNO continues to believe in the need for a constructive debate and international cooperation in order to encourage future growth and further the sustainable development of the international telecoms markets,” said Luigi Gambardella, chairman of ETNO.
Tarik Al Awadhi, executive director for Spectrum and International Affairs at the U.A.E. Telecommunications Regulatory Authority and the representative for 17 Arab states at WCIT, said the conference had been a success, despite the failure to secure signatures from the U.S. and a host of European countries.
“We would like the over-the-tops to have commercial agreements with the telecoms operators on how to provide their services in terms of economy and quality of service and with security,” said Mr. Al Awadhi.
Already, partnerships are in place between some telecoms operators in the region and OTTs. Mobily, the Saudi operator, offers a data plan in partnership with Google, and Nawras, the Omani telco, announced a similar plan in partnership with WhatsApp earlier this month.
But some independent observers at WCIT said telecoms operators should refrain from the quick fix of targeting OTTs for additional revenues.
“The countries that are going to make it difficult for others to have their content are not punishing the Google’s of this world but they will be punishing themselves because the content providers will bypass them because they will be countries that will be far too expensive,” said Paul Budde, managing director of Sydney-based telecoms consultancy BuddeCom.
Although WCIT divided states on Internet issues, signatories did agree regulations to improve issues such as broadband access to landlocked and island nations, transparency on global roaming charges, disabled access to networks and services, and commitment to energy-efficiency and reducing waste in the industry.
Dow Jones
